Module 3.1

Question 1

Ten steps of understanding the job

Answer 1

1. Talk to applicant and discover the story
2. Educate;make disclosures, obtain consent
3. perform affordability calculations
4. gather and verify documents
5. evaluate creditworthiness of applicant
6. evaluate property quality
7. review suitable lender and product options with borrower
8. prepare, submit, loan application, review response
9. close the transaction
10. market to attract (or retain) clients

Question 2

7 examples for discovering the story

Answer 2

1. verify identity
2. collecting core documents
3. checking credit performance
4. Evaluating information
5. discussing needs and goals
6. developing rapport
7. validating referrals

Question 3

Some questions to ask to get more info from client

Answer 3

Tell me what you like to do on weekends?
Tell me about yourself
What are your goals for the next few years?
What do you want to accomplish with this purchase?
Do you see your lifestyle changing much in the near future?

Question 4

red flags for non-verbal ques

Answer 4

evasiveness in providing answers
nervous laughter
looking away when asked a question
refusing to answer a reasonable question
shifting in the chair or signs of discomfort when asked a question
scripted or recited answers
hesitations or difficulty remembering common details

Question 5

Minimum requirements for identifying identity

Answer 5

Obtain the applicant’s full name (first, middle, and last).
Record the type, serial number, and expiry date of two pieces of government-issued identification (ID). At least one should include a photo.
Check that the applicant’s name, address, and telephone number appear in the telephone book or a credible electronic directory.
If possible, set up a time for a personal meeting.
Inform the applicant that s/he will need to bring the above-mentioned two pieces of government-issued identification to the first meeting. At that time, you will need to verify that the ID is not expired and that the ID matches the applicant.
Explain to the applicant that other documentation will be required as the process moves forward. This is addressed in more detail in Session 3-1-5: Collecting core documents.

Question 6

what to do if no credit

Answer 6

It is possible for an applicant to have no credit score (a credit score of zero), and there are several possible reasons for this. It does not automatically mean that the applicant has bad credit management, however the mitigation of these applications is greater as there may be greater risk. This means you will need to explain fully why there is no credit score. Always work to mitigate negative credit by showing the strengths of the application such as down payment sources or strong ratios.

Question 7

Addressing poor credit performance

Answer 7

Ask for proof of cause
Ask the applicant if s/he can provide explanations or proof of cause for the trouble spots in the credit report (what happened? what was done to fix it? why will it not likely happen again?).

Ask for documentation to refute
Ask the applicant if s/he can provide any documentation that refutes or disproves the creditor information from the reporting agency.

Investigate other credit inquiries
Check what other credit-granting companies, brokers, collection agencies, or government agencies have done a credit inquiry recently (which may be an indication of hidden current or pending debt).

Look closer at the property
Take a closer look at the property that the applicant owns or wants to own. When credit is unacceptable, the property takes on more significance in the process and must be proven to be valuable or marketable enough to offset the poor credit in the eyes of the lender.

Verifying property documents is described in detail in Unit 3-4: Gather and verify documents; verifying property value is discussed in Unit 3-6: Evaluate property quality.

Consider alternative sources of funding
Start looking at alternative sources of funding right away so that you have a solution (if there is one) for the client when you next talk. Information about different types of lenders is addressed in Session 2-1-1: Lenders and Session 3-7-1: Reviewing the market for a suitable lender.

Prepare the applicant
If there is no lending solution for this applicant, be honest about it. It is better to discuss it right away rather than spending time and effort on a deal that will not succeed.

In this case, you also need to be prepared to discuss how the applicant can become a mortgage holder in the future and suggest things s/he could do in order to get approved.