2023 1 You work for a mortgage lender that really encourages you to sell ARM loans

1.  You work for a mortgage lender that really encourages you to sell ARM  loans to your clients.  In fact, if 75 percent of the loans you close  each month are ARM loans, you receive a very nice bonus.  

You  have a customer on the phone that you don’t feel understands ARM loans  very well despite all your efforts.  He tells you repeatedly that he  would be better off with a 30-year fixed rate mortgage.  You proceed to  take his application and send all the required documentation to him for a  5/1 ARM.  He signs the documents and returns them to you.  You process  his loan and close it 30 days later.

• Do you feel you ethically assisted your borrower with this loan?
• What could you have done differently?

2.   You have a co-worker at work that you are also friends with.  One day, a  borrower comes in and meets with him. You overhear the borrower tell  your co-worker that he has a loan with his mom and dad for about $10,000  that he pays $300 a month. Your co-worker proceeds as if he didn’t hear  your borrower at all.  Once he has taken the application, he tells the  borrower that he qualifies for maximum financing for a $250,000 home.   However, that does NOT take into consideration the $300 a month the 

borrower pays his parents for the loan.

• Did your coworker do anything unethical in this transaction?
• Assuming you feel this was an unethical situation, how do you handle this?  Remember, this is your friend and co-worker.