Module 1 Flashcards
The standard form that applicants must complete when applying for a mortgage.
The Uniform Residential Loan Application Form (URLA) or Form 1003
Can originators make revisions to the URLA?
Yes
What guidance is provided on revisions to the URLA?
Freddie and Fannie “Rendering Options”
What cannot be changed on the URLA?
- Wording
- Field names
- Descriptions of requested information
- Section order
What qualifies a misrepresentation as “material”?
If it is intended to influence the recipient of the application to grant credit for the applicant
Maximum penalty for misrepresentations on a loan application?
5-year jail time
How many years of employment history is required on the URLA?
2 years
Where must an applicant list any bridge loan proceeds they receive?
Assets (not income)
For a two- to four-unit principal residence, if the LTV is greater than 80%, the borrower must make a contribution of at least X% in order to use employer assistance.
5%
The value of unimproved land that a potential borrower owns might be acceptable to use for qualification purposes. If the applicant owns the land outright already (i.e., it is not affected by any outstanding liens), they will potentially be able to use the value of that land as collateral to obtain a construction loan and build a home
Lot Equity
Might be offered by an employer to incentivize an employee or group of employees to relocate
Relocation Funds
Occurs when consumers are living in rent-to-own properties – i.e., they began by renting a property, and they now wish to purchase it for good. The agreement may provide that a portion of their rent payments is set aside and applied to the property purchase price
Rent Credit
The non-monetary contributions a person has made toward a venture or investment. In mortgage terms, it usually refers to a person having completed maintenance, repairs, and/or renovations on a property they are now looking to buy. The value of the work completed replaces a monetary investment, in whole or in part – for example, if a property requires $5,000 in repairs, but the consumer is able to do the majority of that repair themselves and supply materials, their work could replace the $5,000 cash needed.
Sweat Credit
Refers to a borrower exchanging property they already own to finance, wholly or partially, a new property.
Trade Credit
Manufactured homes that are treated as real property from the beginning of the application process
Modular homes - mobile home are not treated as real property until they are connected to the land in the form of water / electricity
What relationships must between borrower / seller must be indicated on the URLA?
- Family
- Business Affiliates