43. A licensee owns a mortgage company. A buyer working with this licensee decides to apply for a mortgage, and pays an application fee of $400 to the licensee's mortgage company. The buyer fails to qualify and the mortgage is denied. The licensee may have liability if she
Answer: A
The licensee may have liability if she promised the buyer the loan would be approved.
If the licensee assured the buyer that the loan would be approved, this creates an expectation and a potential liability if that promise is not fulfilled. This commitment can be interpreted as a guarantee, which could lead to legal repercussions if the buyer suffers a loss as a result.
A) promised the buyer the loan would be approved.
This option is correct because making a promise about loan approval implies a guarantee that the buyer would receive the loan. If the buyer relied on this assurance and subsequently had their application denied, the licensee could be held liable for misrepresentation or failure to fulfill that promise.
B) guaranteed a quick turnaround time in review of the application.
While guaranteeing a quick turnaround could be seen as a commitment, it does not directly relate to the approval of the loan itself. A quick review does not guarantee that the loan will be approved; therefore, liability is less likely to arise from this statement alone.
C) provided the interest rates to the seller in writing.
Providing interest rates to the seller does not inherently involve a promise regarding loan approval for the buyer. This action is more about transparency in the terms of the mortgage rather than a guarantee of approval, so it does not create liability.
D) promoted the mortgage company as having the best service available.
Promoting the company’s service quality does not constitute a promise of loan approval. This marketing statement is subjective and does not create a direct obligation to the buyer regarding the loan’s outcome, thus it does not expose the licensee to liability.
Conclusion
The licensee's potential liability arises specifically from promising the buyer that the loan would be approved, which establishes a binding expectation. Other options do not create the same level of obligation or expectation, and therefore, they do not lead to liability in the same way that a promise of approval does. Thus, option A is definitively the correct choice.