What action is required if a licensee is found to be committing mortgage fraud?

When a licensee is found to be committing mortgage fraud, immediate reporting to state authorities is required because it ensures that regulatory bodies are made aware of potentially illegal activities in the mortgage industry. This reporting is crucial for several reasons: it helps to protect consumers, maintain the integrity of the mortgage lending process, and allows state authorities to take appropriate action against fraudulent activities. Reporting also contributes to the overall surveillance of the mortgage market, fostering transparency and accountability.

While withdrawal from the business, voluntary termination of license, and engaging in remedial training may be considerations for addressing the individual's situation, they do not fulfill the immediate responsibility to report wrongful conduct. Reporting to authorities is a legal obligation and a critical first step in addressing fraud effectively and protecting all parties involved in the mortgage transaction.