Question

A borrower closes on two separate cash-out refinances on the same home on the same day. In neither case is the borrower committing fraud. Identify the correct term for each scenario:

a) Identity theft

b) Undisclosed kickback

c) Shotgunning

d) Straw borrower

Answer 1

The correct term for the scenario is 'Shotgunning'. Shotgunning refers to a borrower closing on multiple cash-out refinances on the same property on the same day.

The answer is option ⇒c

Step-by-step explanation:

The correct term for the scenario described in the question is c) Shotgunning. Shotgunning refers to the practice of a borrower closing on multiple cash-out refinances on the same property on the same day.

This can be done to obtain a large amount of cash from the property, usually exceeding its current value. While it is not fraudulent, shotgunning can raise concerns about the borrower's financial stability and their ability to repay the loans.

The answer is option ⇒c