Module 6: Completing The Mortgage Application Flashcards
What are the approval and funding ratios?
Approval Ratio - The % of mortgages that are approved for a mortgage loan from all deals submitted by an associate mortgage broker. Where the funding ratio is the % of mortgages that close from all deals submitted by a broker.
What are some of the basic pieces of information for a mortgage application?
-Basic Demographics
-Employment, Income and Credit
-Property, Lawyer and Loan
No mortgage brokerage will charge, collect or attempt to collect from a borrower in relation to a mortgage until:
-Mortgage lender has provided a written confirmation to fund the mortgage to the borrower;
-The commitment has been accepted by the borrower in writing
-A copy of the signed commitment has been provided to the borrower
What are the required documents the broker must provide the lender with:
-Copy of purchase and sale
-Copy of the property listing
-All amendments and addenda
-Any pertinent property information
-Possibly appraisals
Some other documents that you might need include:
-Group Credit Life/Employment/Disability
-Serious Illness Insurance Application
-Void Cheques
-Proof of paid collections
-Copy of bankruptcy discharge
-Divorce/seperation/support agreements
-Property survey or title insurance
What is the most common mistakes/grievances identified by lenders that associate mortgage brokers make?
That brokers do not provide sufficient notes, addressing problematic issues, inconsistencies or irregularities.
What are 10 practical steps to completing a mortgage application?
1) Complete application in full and with correct information.
2) Run the credit report, is the information in the report consistent with what the borrower provided?
3) Check to ensure that the mortgage lender will do or consider the deal of interest.
4) Make sure you know lender requirements so you have appropriate documents.
5) Include mortgage number and closing date
6) Use direct means of communication for submitting documents such as fax or online direct portal
7) Review all documentation & clarify anything that is uncertain
8) Anything in the application that needs attention, indicate it in the notes
9) Ideally send all paperwork to lender at one time in one package
10) Avoid last minute changes if possible
What is the definition of mortgage fraud?
Mortgage fraud is defined as the deliberate use of misstatements, misrepresentations or omissions to fund, purchase, or secure a mortgage.
What are some common False Identity Schemes Used by fraudsters?
-Imposters: Claiming to be someone else or paying someone to pretend to be them
-Ficticious Identity: Examples include using childs sin to establish a credit profile.
-Identity Theft: Fraudster uses someone’s stolen identity to obtain a mortgage in the stolen name.
-The Straw Buyer: When an individual makes a purchase on behalf of another person who has no intention of using or controlling the property.
Are straw buyers still liable in anyway even if they have been swindled by the individual who coordinated the deal?
Yes, they are still liable in the eyes of insurance and the law because the fraud would not have occurred without their participation.
False Identity Schemes: Multiple Parties - Red Flags to Look Out For:
-You have limited access to the actual borrower
-There are multiple unrelated buyers/borrowers
-The parties have no interest in the property itself
An associate mortgage broker should excercise caution when the applicant:
-Refuses to meet
-Wont answer questions about other parties
-Attempts to avoid involvement of other parties such as a spouse
-Won’t allow an appraiser to access property
-Shows no personal interest in the property
Must an associate mortgage broker meet a client face to face?
They are not required to do so however, ideally if possible this would be the best possible outcome. However, you must still verify the clients identity.
What must you do to verify an individuals identity?
You need at least a government issues photo ID that is authentic, valid, current and issued by either the provincial or federal government. Can check the FINTRAC website to see what for a list of acceptable IDs.
What does the first digit of your SIN # signify?
It details which province the individual resides in
What are some examples of where you may need to check for consistency in information provided by the borrower?
-Check to ensure DOB and address on photo ID are the same as the information in the application.
-Compare signatures on the ID to ones on the application
