While verifying a payment arrangement with an applicant's medical facility, the broker learns that the borrower has a terminal illness. How should the broker react to finding out this information?

The situation involving a borrower with a terminal illness raises significant ethical and regulatory considerations in the mortgage lending process. The correct approach is for the broker to acknowledge that while the broker has gathered information regarding the borrower's health, they must focus on the payment verification and the financial qualifications of the borrower in accordance with fair housing and lending regulations.

Under the Fair Housing Act and other regulations, brokers are not permitted to discriminate based on health status or disability. Ignoring the terminal illness, therefore, respects the borrower's right to financial privacy while also adhering to the regulatory framework guiding lending practices. The broker should focus solely on the verified income and creditworthiness of the applicant, assessing their ability to repay based solely on qualifying income and financial stability without delving into personal health matters that could constitute discrimination.

This approach prioritizes lawful lending practices while also encouraging lenders to consider applicants based on their financial capabilities rather than personal circumstances that do not bear directly on their loan eligibility. It reinforces the importance of maintaining compliance with ethical standards in the mortgage industry while handling sensitive information.