Loan Origination Activities Flashcards

1
Q

Credit is:

A

sums of money received.

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2
Q

The two types of documents associated with a loan

A

Mortgage and the promissory note

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3
Q

Must simultaneously follow the instructions of the borrower and the seller in a sales transaction, as per the sales contract, escrow instructions, etc.

A

The Closing Agent - Settlement Agent - Title Agent

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4
Q

Maximum allowable contributions by sellers and/or
lenders is 3% of the lesser of the appraised value or sales price for a principal
residence or second home if the LTV is greater than

A

90%

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5
Q

Maximum allowable contributions by sellers and/or
lenders is 6% of the lesser of the appraised value or sales price for a principal residence or second home if the LTV is between

A

76% and 90%

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6
Q

Maximum allowable contributions by sellers and/or

lenders is 9% of the lesser of the appraised value or sales price for a principal residence or second home if the LTV is

A

75% or less

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7
Q

Legal evidence of the debt and is not recorded.

A

Note

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8
Q

Does not cover damages due to perils of flood.

A

hazard insurance

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9
Q

Assessing an individual’s risk (underwriting) may be done:

A

Manually or by AUS

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10
Q

The spouse does not need to sign the note if

A

If his/her income is not taken into consideration

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11
Q

A borrower may charge how much for an appraisal?

A

$500

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12
Q

A borrower may charge how much to lock in fees?

A

1% of the loan amount to his/her credit card

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13
Q

A borrower’s payment history on previous mortgages or rent must be:

A

Verified for 12 months

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14
Q

Gift letter must contain:

A

Dollar amount of the gift, date the funds were transferred, and donors name, address, phone number and relationship to the borrower

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15
Q

A borrower must use how much of their funds?

A

5%

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16
Q

The borrower may rescind any lock-in agreement until a…

A

written confirmation of

the agreement has been signed by the lender and mailed to the borrower.

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17
Q

Each lock-in agreement must be in writing and contain:

A

expiration date of the lock, the interest rate, any discount points, any commitment fee and lock-in fee if
these exist.

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18
Q

Applications can be taken

A

face-to-face, over the phone, through the mail or over

the Internet.

19
Q

The first mortgage payment due date always:

A

skips one calendar month

20
Q

Daily interest rate:

A

loan amount x interest rate ÷ 365.

21
Q

Monthly interest rate

A

loan amount x interest rate ÷ 12

22
Q

Annual interest rate

A

loan amount x interest rate

23
Q

Yield spread premium (or lender credits):

A

is a tool MLOs can use to reduce a

borrower’s settlement costs.

24
Q

Origination Fee is shown on:

A

Covers administrative costs to close/service loan.

25
gives a borrower a lower interest rate for the life of the loan.
Fixed discount
26
Discount point/Buy Down can be paid by the:
borrower, seller, builder, etc.
27
All origination points must be:
lumped together as the origination fee on the Loan | Estimate
28
discount points used to buy down the rate must be:
indicated as a charge the borrower incurs for the interest rate selected.
29
Each discount point and each loan origination point cost:
1% of the loan amount
30
are paid to the loan originator as a fee for service
origination point
31
;Points are often used to
lower interest rates and each point will lower the rate by 0.25%.
32
The Total Debt to Income Ratio =
PITI + other monthly debt ÷ Gross Monthly | Income
33
total amount needed to purchase property, including down payment, loan amount, and any allowable buyer-paid closing costs.
Acquisition cost
34
Public Assistance Income is “non-taxable” income and can be consider any of the following:
child support, alimony, social security income, retirement income, pension, etc.
35
If unemployment is a part of their natural annual work cycle, then it can be included in their qualifying income if it has shown for the:
past two years on the borrowers tax return (the average | $$ amount is used)
36
Receipt of alimony or child support payments must continue for:
3 years beyond the application date in order to be included as income.
37
Retirement and pension income must continue for:
3 years beyond the application | date in order to be included as income.
38
Commission, Overtime, Bonus, Part-time, Interest and Dividend income must be
averaged over 2 years.
39
Employment income must be verifiable for
the past two years
40
summarizes the company's assets and liabilities over | a range of time. A balance sheet depicts the company's book value at a single moment in time. It is a snapshot of value.
Profit and Loss Statement
41
Consumer debts that have ______ of payments remaining do not need to be included for the purpose of calculating debt ratios.
less than 10 months of payments
42
Underwriters want to confirm that the borrowers have
sufficient assets and personal money
43
net worth is determined by
Assets - Liabilities