Loan applicant is purchasing four-bedroom house

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Reference no: EM133654500

Question

A 28-year-old loan applicant is purchasing a four-bedroom house just for himself. He has a good job, earning $60,000 per year. He's applying for a housing finance authority's loan program that has an income limit of $75,000. Through the program, the borrower will receive $5,000 in grant money toward the home's purchase. When Angela reviewed the applicant's loan file, she noted that he has $250 transferred to him every Friday through Venmo (i.e., a phone-based social payment platform) from a woman. When Angela asked him about this weekly deposit, the applicant responded that it was from his girlfriend, but not to worry-she wouldn't be moving in with him because they're taking a relationship break. However, upon review of the applicant's credit report, Angela saw that the applicant just paid $7,000 on a jewelry store credit card that's a recently opened joint account. When asked about the account, he stated that it was for his mother, who couldn't get a credit card on her own. One individual red flag doesn't say fraud, but all the pieces together might tell a different story. For example, if the girlfriend planned to move in with him and her income were counted, he'd be overqualified.

Reference no: EM133654500

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