Mortgage Loan Origination

Question 1

Which of the following would not be found on a credit report?

Answer 1

Payments made to creditors who do not send data to a repository

Question 2

Bankruptcy information will remain on a consumer’s credit report for:

Answer 2

10 years

Question 3

Joan johnson is a salesperson who is paid 100% commission. What type of documentation would you ask her to provide as proof of her income for loan qualification?

Answer 3

Tax returns for the past two years.

Question 4

Which of the following best describes the LTV ratio?

Answer 4

IT is the ratio of the borrower’s principal loan balance to the appraised value of the property

Question 5

Which of the follow real estate appraisal approaches considers the value of the property and any improvements made?

Answer 5

Cost approach

Question 6

On which approach do appraisers place the most weight in reaching a value conclusion for conforming loans?

Answer 6

Sales comparison approach

Question 7

Appraisals that use the sales comparison approach include which of the following?

Answer 7

comparison of value for three similar, recently sold properties

Question 8

This is the term for changes in the value of a property made when comparing the features of a comparable property to a subject property.

Answer 8

Adjustment

Question 9

Which document would an underwriter rely on for detailed information concerning the collateral for a mortgage loan?

Answer 9

The property appraisal

Question 10

The Uniform Residential Appraisal Report is commonly known as the:

Answer 10

1004

Question 11

An agreement a borrower makes with a lender allowing their interest rate to rise and fall with the market is called:

Answer 11

A float agreement

Question 12

Mortgage insurance premium:

Answer 12

Is paid upfront on all FHA loans

Question 13

Title insurance is required for all loans by the:

Answer 13

Lender

Question 14

The DTI standard for an FHA loan is _________, and the standard for a VA loan is _________.

Answer 14

43%; 41%

Question 15

In order for a home loan to be a qualified mortgage, the debt-to-income ratio may not exceed:

Answer 15

43%

Question 16

Which of the following individuals would not be permitted to hold POA for a borrower?

Answer 16

The borrower’s mortgage loan originator

Question 17

Why would a mortgage lender analyze a borrower’s credit capacity?

Answer 17

To determine if the borrower is financially capable of repaying the loan

Question 18

The loan processor indicates that a 1003 cannot be submitted until the Government Monitoring section is completed. Which of the following would be provided in this section of the 1003?

Answer 18

Borrower’s race, gender and ethnicity

Question 19

Which of the following is available to a borrower when the subject property is located in a flood zone and flood insurance is required?

Answer 19

FEMA’s National Flood Insurance Program

Question 20

The cost approach to appraisal includes which of the following?

Answer 20

The value of the lot plus the replacement cost of the improvements

Question 21

The disadvantage of holding an interest in property as a leasehold instead of holding it in fee simple is that:

Answer 21

Holding property as a leasehold does not give the consumer unconditional power of disposition of the property during his/her life and the ability to pass the property onto his/her heirs

Question 22

Which of the following verifications of employment would be most acceptable to a lender that sell all of its loans to Fannie Mae?

Answer 22

A written verification of employment that the applicant’s employer mails directly to the lender