Chapter 17 - Submitting the Application and Obtaining a Commitment

Question 1

True or False: If the lender is an institution, the investor/lender disclose must be provided to the borrower during signing of the borrower disclose document

Answer 1

False. Investor/Lender Disclosures only need to completed if a private lender is being used for mortgage financing

Question 2

What 8 things must be disclosed to a private lender?

Answer 2

1. Fees and payments associated with the mortgage
2. The relationship between the brokerage and borrower
3. The role of the brokerage
4. Borrower information
5. Property information
6. Terms and conditions of the mortgage
7. Conflicts of Interest
8. Risks

Question 3

True or False: A brokerage can sell a mortgage that had been in default 11 months ago to a private lender

Answer 3

False. A brokerage cannot sell a mortgage that has been in default within the last 12 months

Question 4

Re: Property Information for Private Investors/Lenders. What 2 documents are required in order for them to make a decision to lend?

Answer 4

1. An appraisal done within the last 12 months

2. A copy of the agreement of purchase and sale

Question 5

True or False: Detailed disclosure documents should only be provided to private lenders/investors for purchasing property, not mortgage renewals

Answer 5

False - detailed disclosure documents are ALWAYS required (whether its a purchase of property or renewal)

*The only time lender disclosure is not required is if the lender is a member of a designated class of lenders and investors (Chapter 5)

Question 6

When does lender disclosure need be completed?

Answer 6

No later than 2 business days before the mortgage is advanced or payments are made to the brokerage