A borrower works at Company XYZ and was recently approved for a cash-out refinance of...

If the mortgage loan originator (MLO) becomes aware of a potential change in the borrower’s employment status, such as the company closing and the borrower being laid off, the MLO must notify the underwriter. The borrower's ability to repay the loan could be impacted by the job loss, and failing to update the underwriter would be a violation of proper lending practices.

Ignoring the information or withholding it (Options A and B) could lead to loan default and is unethical.

Homeownership counseling (C) is beneficial but not relevant to the immediate concern of loan approval and repayment ability.