Chapter 11 Flashcards
Which of the following is part of the legal description of a property?
Select one:
a. Apartment number
b. Lot #
c. Postal code
d. Civic address
Correct Answer: Lot #
Rationale: The lot #, plan # and municipality are all part of the legal description.
Relevant section(s) of the textbook: 11.4 The Application Form
The correct answer is: Lot #
Which of the following is not a step to consider for the initial consultation with your client?
Select one:
a. Approving the application
b. Preparing for the meeting, including creating a blank file
c. Verifying the client’s identity
d. The location of the meeting
Correct Answer: Approving the Application
Rationale: Approving the Application is not a step to consider for the initial consultation with your client. The application is only completed, not approved at the initial consultation.
Relevant section(s) of the textbook: 11 Introduction
The correct answer is: Approving the application
If your client is refinancing their current mortgage you would list their home as a(n):
Select one:
a. Asset minus the current mortgage
b. Liability
c. Asset
d. It would not be listed
Correct Answer: Asset
Rationale: An asset is anything that is owned, such as a house or property
Relevant section(s) of the textbook: 11.4 The Application Form
The correct answer is: Asset
This term refers to a document allows the mortgage agent to use the applicant’s personal information for the purposes contained within the consent form:
Select one:
a. File Worksheet
b. File Checklist
c. Open-ended question
d. PIPEDA Consent
Correct Answer: PIPEDA Consent
Rationale: PIPEDA Consent: This document allows the mortgage agent to use the applicant’s personal information for the purposes contained within the consent form.
Relevant section(s) of the textbook: 11.1 Required Documentation
The correct answer is: PIPEDA Consent
This term refers to a question that does not elicit a single word or short response:
Select one:
a. Open-ended question
b. File Checklist
c. Closed-ended question
d. File Worksheet
Correct Answer: Open-ended question
Rationale: An Open-ended question is a question that does not elicit a single word or short response. For example, asking a person how long he or she has worked at his or her job will elicit a short response. This is a closed-ended question. Asking a person to describe his or her job should result in a much longer response, which will most likely include how long he or she has been at the job. This is vital in developing a good dialogue with your client.
Relevant section(s) of the textbook: 11.3 Meeting the Client
The correct answer is: Open-ended question
It is important to have this on the application form to prove that the client gave permission to obtain a credit report.
Select one:
a. Signature
b. SIN
c. home address
d. job information
Correct Answer: Signature
Rationale: When completing a paper application, ensure that the applicant(s) sign(s) the application. By having the client’s signature on the application, the mortgage agent has consent to complete the necessary investigations to obtain a commitment from a lender. Although verbal authorization is acceptable, some applicants may dispute providing authorization at some point in the future. For example, if an applicant is declined and six months later attempts to obtain financing, they may not recall the reason for the inquiry on their credit report.
Relevant section(s) of the textbook: 11.4 The Application Form
The correct answer is: Signature
Which of the following documents can a borrower legally refuse to provide?
Select one:
a. SIN
b. job letter
c. NOA
d. application form
Correct Answer: SIN
Rationale: It is helpful to have the social insurance number when completing a credit inquiry; however, it is not mandatory. If the applicant does not wish to provide their social insurance number, then the mortgage agent cannot demand it. An applicant may legally refuse to provide this information.
Relevant section(s) of the textbook: 11.4 The Application Form
The correct answer is: SIN
This term refers to a key component used for recording notes and more importantly providing a quick summary of the file:
Select one:
a. File Checklist
b. PIPEDA Consent
c. File Worksheet
d. Open-ended question
Correct Answer: File Worksheet
Rationale: A File Worksheet a key component used for recording notes and more importantly providing a quick summary of the file. This can be particularly important if more than one person is working on the file, if the mortgage agent is working on several files simultaneously or if the file hasn’t been worked on in some time.
Relevant section(s) of the textbook: 11.1 File Creation
The correct answer is: File Worksheet
Which of the following is not an example of a Primary Identification Document that may be acceptable by lenders?
Select one:
a. Valid driver’s licence issued in Canada
b. Federally issued Firearms Licence
c. Current Canadian Passport
d. Birth certificate issued in Canada
Correct Answer: Birth certificate issued in Canada
Rationale: A Birth certificate issued in Canada is not a Primary Identification Document, but rather, a Secondary Identification Document that may be acceptable to lenders.
Relevant section(s) of the textbook: 11.3 Identity Verification
The correct answer is: Birth certificate issued in Canada
This is the most common form of photo ID used in Ontario.
Select one:
a. Birth certificate issued in Canada
b. Federally issued Firearms Licence
c. Valid driver’s license issued in Canada
d. Current Canadian Passport
Correct Answer: Valid driver’s license issued in Canada
Rationale: A Valid driver’s license issued in Canada is the most frequently used photo ID is the driver’s license.
Relevant section(s) of the textbook: 11.3 Identity Verification
The correct answer is: Valid driver’s license issued in Canada
