The idea for the loan is repayment, and the customer indicated that they will be moving from the area and unemployed.
The LO (like rlcarey mentioned) should have picked-up on the moving/employed statement and asked how the applicant will repay the loan when (s)he is not working. I hope it was a junior loan officer filling in. They need training, or else the bank may be making loans on imperfect information.
Integrity. With it, nothing else matters. Without it, nothing else matters.