Chapter 17: Submitted the Application and Obtaining a Commitment

Question 1

List the typical items that must be explained in the notes section of an application and provide an example of each.

(3)

Answer 1

The areas to review is Credit, Property and Employment

Question 2

Discuss the impact of funding ratios on a Mortgage Agent.

Answer 2

If a Mortgage Agent doesn’t have appropriate funding ratios Lenders may decide to stop doing business with him or her.

Question 3

What is the most common complaint by Underwriters when referring to mortgage applications?

Answer 3

The lack of notes

Question 4

List eleven pieces of information that are commonly found in a commitment letter.

Answer 4

Applicants’ Names
Property Address (address of the security)
Mortgage Amount
Interest Rate
Payment Amount
Payment Frequency
Term
Closing Date
Prepayment Privileges
Conditions of approval
Terms of the approved mortgage (such as fees, appraisal requirements, etc.).

Question 5

A self-employed individual’s income required how many years of financial statements

Answer 5

A copy of three (3) years income tax Assessments and Financial Statements;

Question 6

What options does a Mortgage Agent have if his or her client’s application is declined by the Lender?

(3)

Answer 6

Contact the Underwriter to understand why the application was declined
Contact the BDM if he or she disagrees with the decision
Submit the application to another Lender

Question 7

What are the three common programs used to submit applications electronically?

Answer 7

Filogix Expert, https://www.filogix.com/expert/filogix-expert
Newton Connectivity Systems, https://www.newton.ca/velocity
MortgageBoss, https://www.m3-tech.ca/boss

Question 8

What is the minimum amount of time the investor/lender disclosure must be given to a potential investor before that investor can provide a commitment?

Answer 8

No later than two business days before the earliest of the following events. This time period can be reduced to one business day if the investor/lender consents in “Form 1.2 – Investor/Lender Disclosure Statement for Brokered Transactions: Waiver for Reducing the Waiting Period”

Question 9

What is a level 2 agent?

Answer 9

Level 2 agent or mortgage broker will submit an application, credit report, investor/lender disclosure and any supporting documentation to a private lender