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Tommy's SAFE Decks > Deck 1 > Flashcards

Deck 1 Flashcards

1
Q

Loan _____ refers to the borrower’s ability to repay the loan. In considering whether or not a particular loan is ______ for a particular borrower, the lender must be confident that the borrower will be able to comfortably manage the payments.

A
  • suitability
  • suitable
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2
Q

Conventional mortgages typically require a minimum down payment of 5%. This money may come from the borrower’s own funds, gift funds, ________ financing, or a combination thereof.

A
  • subordinate
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3
Q

__________ interest is the term used for interest owed from the date of a loan’s funding through the end of the month in which the loan funds.

A
  • Interim
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4
Q

Based on _______ location and family

_____, if an applicant earns a specific amount of residual income or more, an underwriter may be inclined to approve a VA loan application with a back-end DTI ratio of greater than 41 %.

A
  • geographic
  • size
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5
Q

The ten sections of the original form 1003 consist of:

  1. ) Mortgage and Terms of Loan
  2. ) Property Information and Purpose of Loan
  3. ) _________ Information
  4. ) Employment Information
  5. ) Monthly ________ and _________ Housing ________ Information
  6. ) Assets and Liabilities
  7. ) Details of Transaction
  8. ) Declarations
  9. ) Acknowledgement and Agreement
  10. ) Information for Government Monitoring Purposes.
A
  • Borrower
  • Income
  • Combined
  • Expense
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6
Q

If additional information is discovered by a licensing authority after issuing a license that would normally have caused the authority to originally deny the licensee’s application, the authority may order the licensee to ____________________

A
  • refrain from further activity until such time that a permanent decision is rendered.
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7
Q

A property located in a ______ theory state requires the borrower to issue legal title to the mortgagee. The mortgagee technically owns the property until the debt is paid at which time the deed is transferred to the _________. In a lien theory state, the borrower retains equitable title. A property located in a lien theory state requires the lender to place a lien against the property’s title that necessitates the initiation of a judicial foreclosure proceeding in the event of default.

A
  • title
  • homeowner
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8
Q

The Initial Escrow Statement, also referred to as the Escrow ________ Sheet, defines the status of the escrow account as of the closing date and further defines who is responsible for issuing any escrow-related disbursement due within _____ days of closing.

A
  • Accrual
  • 60
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9
Q

State income __________ are not used to determine an applicant’s income for mortgage underwriting purposes. Bank statements reflecting pay deposits, pay stubs, W-2 forms, 1099 forms, and __________ income tax returns are some of the documents used to substantiate a mortgage applicant’s income.

A
  • tax returns
  • federal
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10
Q

The ten sections of the original form 1003 consist of:

  1. ) Mortgage and Terms of Loan
  2. ) Property Information and Purpose of Loan
  3. ) Borrower Information
  4. ) Employment Information
  5. ) Monthly Income and Combined Housing Expense Information
  6. ) Assets and Liabilities
  7. ) Details of _____________
  8. ) Declarations
  9. ) Acknowledgement and Agreement
  10. ) Information for __________ _________ Purposes.
A
  • Transaction
  • Government Monitoring
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11
Q

Fraud for housing occurs when an individual falsely represents their qualification credentials in pursuit of home financing. Additionally, falsely representing one’s income constitutes making a false statement to a ________ institution. Both are federal crimes.

A
  • financial
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12
Q

A note ________ is an income stream earned from the repayment of a debt someone owes to the note holder. If the note is produced along with an on-time, 12 consecutive or greater monthly payment history as well as evidence of a minimum three-year continuance, the note receivable may be utilized as qualifying income.

A
  • receivable
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13
Q

Flood zone prefixes A, V, and _____ require the homeowner to maintain flood insurance when a mortgage securitizes the property.

A

VE

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14
Q

Conventional financing refers to mortgage loans that are not funded, purchased, or _____________ by purely­governmental entities. Conforming describes any loan that “conforms” to Fannie Mae or Freddie Mac underwriting criteria as well as FHFA-established annual loan ________.

A
  • securitized
  • limits
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15
Q

In October, 2010, the minimum FHA down payment was increased from 3.5% to 10% for anyone whose credit score falls below _____.

A
  • 580
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16
Q

Option loans afford borrowers with _______ monthly payment options from which they may freely choose. By remitting the minimum payment option, the borrower would most likely experience ________ amortization.

A
  • four
  • negative
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17
Q

Since the first payment due date is usually the first of the month after ___ _____ ________ ______, that payment only covers interest owed for the month which it directly follows.

A
  • the month following closing
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18
Q

Financial institutions must provide an individual claiming to have been victimized by identity theft with a copy of ______________________ in its records pertaining to the alleged claim. The financial institution may not charge the requester for the documentation.

A
  • anything and everything
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19
Q

FACTA requires lenders to inform applicants of their representative credit score through a separate disclosure issued _________________

A
  • at the time of application
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20
Q

In October, 2010, the minimum FHA down payment was increased from 3.5% to ____% for anyone whose credit score falls below 580.

A
  • 10%
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21
Q

Subprime mortgages were created to assist those in need of “_______ ___ ___” financing along with those who had ___________ credit because they did not meet the qualificational requirements of standard mortgage financing.

A
  • outside the box
  • damaged
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22
Q

___ settlements issue the funds immediately after settlement or, when the transaction is _____________,
immediately after the rescission period expires.

A
  • Wet
  • rescindable
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23
Q

In accordance with the FTC’s ________ Rule, a covered account includes any account that is offered or maintained by a financial institution or creditor, is intended for personal, family, or household purposes, and is designed to permit ________ payments or transactions.

A
  • Red Flags
  • multiple
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24
Q

Although anything out of the ordinary should be justified, a large number of recent credit inquiries could signal that there are debts owed that do not yet appear on the credit report or that the applicant may be a victim of ______ _______.

A
  • identity theft
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25
Q

The ten sections of the original form 1003 consist of:

  1. ) Mortgage and Terms of Loan
  2. ) Property Information and Purpose of Loan
  3. ) Borrower Information
  4. ) Employment Information
  5. ) Monthly Income and Combined Housing Expense Information
  6. ) Assets and Liabilities
  7. ) Details of Transaction
  8. ) Declarations
  9. ) Acknowledgement and __________
  10. ) Information for Government Monitoring Purposes.
A
  • Agreement
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26
Q

The FHA 251 refers to the FHA’s _________ _____ mortgage offered in 1 /1, 3/1, 5/1, 7/1, and 10/1 formats. The 203(__) is the FHA rehabilitation loan and the 203(b) is the standard 30-year FHA fixed-rate loan.

A
  • adjustable rate
  • k
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27
Q

The _______ ________ Statement, also referred to as the Escrow Accrual Sheet, defines the status of the escrow account as of the _______ date and further defines who is responsible for issuing any escrow-related disbursement due within 60 days of closing.

A
  • Initial Escrow
  • closing
28
Q

Option loans generally contain a balance cap which, when reached, triggers the servicer to adjust the payment amount to accommodate the existing balance, remaining term, and current interest rate. Since reaching the balance cap is never guaranteed, options loans also include a __-____ point that, when reached, would also cause the servicer to adjust the payment amount in the same manner as if the balance cap was reached.

A
  • re-cast
29
Q

_________ requires lenders to inform applicants of their representative credit score through a separate disclosure issued at the time of application

A
  • FACTA
30
Q

_____ settlements record the documents into public record before issuing the funds.

A
  • Wet
31
Q

Since the loan originator arranged for one loan and ultimately produced another, his actions constituted unfair and deceptive trade practices. This example may also be referred to as __________

A
  • “bait & switch.”
32
Q

Although anything out of the ordinary should be justified, a ______ number of ______ credit inquiries could signal that there are debts owed that do not yet appear on the credit report or that the applicant may be a victim of identity theft.

A
  • large
  • recent
33
Q

The ten sections of the original form 1003 consist of:

  1. ) Mortgage and Terms of Loan
  2. ) ______ Information and ______ of Loan
  3. ) Borrower Information
  4. ) __________ Information
  5. ) Monthly Income and Combined Housing Expense Information
  6. ) Assets and Liabilities
  7. ) Details of Transaction
  8. ) Declarations
  9. ) Acknowledgement and Agreement
  10. ) Information for Government Monitoring Purposes.
A
  • Property
  • Purpose
  • Employment
34
Q

________ loans afford borrowers with four monthly payment options from which they may freely choose. By remitting the minimum payment option, the borrower would most likely experience negative amortization.

A
  • Option
35
Q

Financial institutions must provide an individual claiming to have been victimized by _______ _______ with a copy of anything and everything in its records pertaining to the alleged claim. The financial institution may not charge the requester for the documentation.

A
  • identity theft
36
Q

Flood zone prefixes A, __, and VE require the homeowner to maintain flood insurance when a mortgage securitizes the property.

A

V

37
Q

The ten sections of the original form 1003 consist of:

  1. ) Mortgage and ______ ___ _______
  2. ) Property Information and Purpose of Loan
  3. ) Borrower Information
  4. ) _________ Information
  5. ) Monthly Income and Combined Housing Expense Information
  6. ) Assets and Liabilities
  7. ) Details of Transaction
  8. ) Declarations
  9. ) Acknowledgement and Agreement
  10. ) Information for Government Monitoring Purposes.
A
  • Terms of Loan
  • Employment
38
Q

In accordance with the FTC’s Red Flags Rule, a ________ account includes any account that is offered or maintained by a financial institution or creditor, is intended for personal, family, or household purposes, and is designed to permit multiple payments or transactions.

A
  • covered
39
Q

Since the first payment due date is usually the first of the month after the month following closing, that payment only covers interest owed for the month which it directly _______.

A
  • follows
40
Q

A lock-in period is the period during which the lender guarantees the applicant a particular interest rate. The shorter the timeframe from interest rate lock to loan funding, the _______ the cost because the lender is reserving the money for a shorter period of time.

A
  • lower
41
Q

The ten sections of the original form 1003 consist of:

  1. ) Mortgage and Terms of Loan
  2. ) Property Information and Purpose of Loan,
  3. ) Borrower Information
  4. ) Employment Information
  5. ) Monthly Income and Combined Housing Expense Information
  6. ) Assets and __________
  7. ) Details of Transaction
  8. ) _____________
  9. ) Acknowledgement and Agreement
  10. ) Information for Government Monitoring Purposes.
A
  • Liabilities
  • Declarations
42
Q

Conventional mortgages typically require a minimum down payment of 5%. This money may come from the borrower’s own funds, ____ funds, subordinate financing, or a combination thereof.

A
  • gift
43
Q

The FHA _____ refers to the FHA’s adjustable rate mortgage offered in 1 /1, 3/1, 5/1, 7/1, and 10/1 formats. The 203(k) is the FHA _________ loan and the 203(__) is the standard 30-year FHA fixed-rate loan.

A
  • 251
  • rehabilitation
  • b
44
Q

Since the loan originator arranged for one loan and ultimately produced another, his actions constituted __________. This example may also be referred to as “bait & switch.”

A
  • unfair and deceptive trade practices
45
Q

Flood zone prefixes ___, V, and VE require the homeowner to maintain flood insurance when a mortgage securitizes the property.

A

A

46
Q

Fraud for housing occurs when an individual falsely represents their _________ credentials in pursuit of home financing. Additionally, falsely representing one’s income constitutes making a false statement to a financial institution. Both are federal crimes.

A
  • qualification
47
Q

In accordance with the FTC’s Red Flags Rule, a covered account includes any account that is offered or _______ by a financial institution or creditor, is intended for personal, family, or ________ purposes, and is designed to permit multiple payments or transactions.

A
  • maintained
  • household
48
Q

A property located in a title theory state requires the borrower to issue legal title to the mortgagee. The
mortgagee technically owns the property until the debt is paid at which time the deed is transferred to the homeowner. In a lien theory state, the borrower retains ________ title. A property located in a lien theory state requires the lender to place a lien against the property’s title that necessitates the initiation of a _______ foreclosure proceeding in the event of default.

A
  • equitable
  • judicial
49
Q

Conforming and portfolio loans (portfolio meaning loans which are underwritten to an individual lender’s individual parameters) are always ___________.

A
  • conventional
50
Q

Conventional financing refers to mortgage loans that are not funded, purchased, or securitized by purely­_________ entities. Conforming describes any loan that “conforms” to Fannie Mae or Freddie Mac underwriting criteria as well as _______ -established annual loan limits.

A
  • governmental
  • FHFA
51
Q

If an individual originates mortgages for an institution regulated by the Farm Credit Administration, s/he does not require a _____ but must possess an _____ by becoming a registered loan originator

A
  • license
  • NMLS unique identifier
52
Q

Loan suitability refers to the borrower’s ________ ___ _________ the loan. In considering whether or not a particular loan is suitable for a particular borrower, the lender must be confident that the borrower will be able to comfortably manage the payments.

A
  • ability to repay
53
Q

The USDA does not oversee _____ or lending although it does support USDA Section _____ rural housing financing

A
  • banking
  • 502
54
Q

18 USC Section 1014 states that, “ … it is a crime to knowingly make false statements or to __________ land or property in order to influence the decision of a lending institution.”

A
  • overvalue
55
Q

FACTA requires CRAs to share fraud alert requests received with ___ _____ ______ in addition to placing the alert on the consumer’s credit profile

A
  • the other CRAs
56
Q

A lock-in period is the period during which the lender __________ the applicant a particular interest rate. The shorter the timeframe from interest rate lock to loan funding, the lower the cost because the lender is reserving the money for a shorter period of time.

A
  • guarantees
57
Q

Conforming and portfolio loans (portfolio meaning loans which are underwritten to an individual lender’s individual __________) are always conventional. Government loans adhere to government underwriting criteria and defined loan _______.

A
  • parameters
  • limits
58
Q

Dry settlements record the documents into public record before issuing the _____.

A
  • funds
59
Q

If an individual is compensated by a licensed entity for mortgage origination activities, that individual must also be licensed as a __________.

A
  • loan originator
60
Q

A note receivable is an income stream earned from the repayment of a debt someone owes to the note holder. If the note is produced along with an on-time, ______ consecutive or greater monthly payment history as well as evidence of a minimum _____-year continuance, the note receivable may be utilized as qualifying income.

A
  • 12
  • three
61
Q

FACTA requires CRAs to share fraud alert requests received with the other CRAs in addition to placing the _ on the ___________ credit profile

A
  • consumer’s
62
Q

In October, _____, the minimum FHA down payment was increased from 3.5% to 10% for anyone whose credit score falls below 580.

A
  • 2010
63
Q

A property located in a title theory state requires the borrower to issue legal title to the mortgagee. The
mortgagee technically owns the property until the debt is ______ at which time the deed is transferred to the homeowner. In a lien theory state, the borrower retains equitable title. A property located in a lien theory state requires the lender to place a lien against the property’s title that necessitates the initiation of a judicial foreclosure proceeding in the event of ________.

A
  • paid
  • default
64
Q

Based on geographic location and family size, if an applicant earns a specific amount of _______ income or more, an underwriter may be inclined to approve a VA loan application with a back-end DTI ratio of greater than ___ %.

A
  • residual
  • 41
65
Q

Since interest is owed from the day of funding, and since the first payment does not cover the interest owed from that date through the ____ ___ __ ___ _____ in which the loan funds, the applicant is required to bring this amount to the closing table. This amount is referred to as “interim interest.”

A
  • last day of the month
66
Q

A note receivable is an income stream earned from the repayment of a debt someone owes to the note _______. If the note is produced along with an on-time, 12 consecutive or greater monthly payment history as well as evidence of a minimum three-year continuance, the note receivable may be utilized as qualifying income.

A
  • holder
67
Q

___________ mortgages were created to assist those in need of “outside the box” financing along with those who had damaged credit because they did not meet the qualificational requirements of standard mortgage financing.

A
  • Subprime

Tommy's SAFE Decks (4 decks)

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