FINANCE CHP 7 Flashcards
Which prevents senior citizens form being discriminated against in the loan process?
a. Equal Credit Opportunity Act
b. Federal Fair Housing Act
C. Real Estate Settlement Procedures Act
d. Regulation Z
a. Equal Credit Opportunity Act
A borrower must provide how many years’ worth of employment information?
a. 2-3
b. 3-4
C. 4-5
d. 5-6
a. 2-3
If the borrower is self-employed, he should provide
a. the average monthly income earned over the previous two years.
b. employment verification from the last employer.
C. profit and loss statements for the previous six years.
d. tax returns for the previous two to three years.
d. tax returns for the previous two to three years
A gift letter
a. is never necessary.
b. may come only from a friend or family member of the borrower.
C. must be signed by the donor.
d. must state when the gift is to be repaid.
c. must be signed by the donor
An escrow agent is LEAST likely to be from a(n)
a. independent escrow company.
b. in-house escrow department.
c. title insurance company.
d. real estate brokerage.
d. real estate brokerage
A borrower applying for a VA loan must provide a
a. Certificate of Eligibility and DD-214.
b. Certificate of Value.
C. military ID card.
d. referral from a superior officer.
a. Certificate of Eligibility and DD-214
Conforming loans follow the guidlines of
a. Fannie Mae/Freddie Mac.
b. the FHA.
c. RESPA.
d. the VA.
a. Fannie Mac/Freddie Mac
There has been ___ dependence on the secondary mortgage market, which has brought a high degree of ___ to loan underwriting
a. decreasing; creativity
b. decreasing; standardization
C. increasing; creativity
d. increasing; standardization
d. increasing, standardization
to qualify for a conventional loan, stable monthly income may include
a. alimony received (which a borrower chooses to reveal).
b. a Christmas bonus received last year for the first time.
C. erratic unemployment earnings.
d. income from other family members.
a. alimony received (which a borrower chooses to reveal)
Which would NOT be used to offset a marginal or high total debt service ratio?
a. above-normal net worth
b. a co-borrower
c. high credit scores
d. a lower interest rate
d. a lower interest rate
Age
a. can be a legitimate reason for turning down any borrower.
b. can be a legitimate reason for turning down a borrower over 65.
C. can’t be considered in the loan underwriting process under any circumstances as long as the applicant is over the age of 18.
d. should always be considered in the loan underwriting process,
c. can’t be considered in the loan underwriting process under any circumstances as long as applicant is over the age of 18
The FHA allows a maximum housing expense to income ratio of __ and a total debt service-to income ratio of __
a. 28%; 33%
b. 28%; 36%
C. 29%; 36%
d. 31%; 43%
d. 31%; 43%
The VA underwrites loans using the
a. residual down payment method.
b. residual income/cash flow analysis method.
C. total debt expense-to-income ratio.
d. total housing expense-to-down-payment ratio.
b. residual income/cash flow analysis method
FHA and VA debt-to-income ratio formulas are___ than conventional rations
a. harder to calculate
b. less generous
C. more generous
d. the same
c. more generous
Which does NOT have its own underwriting standards?
a. Fannie Mae
b. the FHA
C. the VA
d. the Federal Reserve
d. the Federal Reserve
