Processing and Underwriting

Question 1

What is the 4 P’s test for advertising?

Answer 1

Prominent, Placement, Presented, Proximity

Question 2

TRUE OR FALSE: You can disclose the rate with no APR on advertisements.

Answer 2

False

Question 3

TRUE OR FALSE: Lenders must use the Equal Housing Opportunity Logo.

Answer 3

False

Question 4

Law that prevents kickbacks and referrals

Answer 4

RESPA Section 8

Question 5

What are the 6 pieces of info that constitute a B’s application?

Answer 5

Address of property, Loan amount, Income, Estimated property value, Name of borrower, SSN (“ALIENS”

Question 6

What does Section 1a of the Borrower Information pages of the URLA contain?

Answer 6

Borrower’s demographic info

Question 7

Which section in Borrowers Information pages in URLA contains employment + self employment information?

Answer 7

Section 1b

Question 8

Section 1c of Borrowers Information pages in URLA

Answer 8

Additional employment (if applicable)

Question 9

What constitutes whether a borrower should fill out Section 1d in Borrower Information pages in URLA (previous employment)?

Answer 9

If the borrower has been at their current job for less than 2 years

Question 10

Section 1e in Borrower Information pages in URLA

Answer 10

Income from other sources

Question 11

Section 2a in the Borrower Information pages in URLA is about assets. What can you NOT ask the borrower about?

Answer 11

Alimony, child support, other maintenance

Question 12

TRUE OR FALSE: Assets can only be included in the financial information section if they are paid off and owned free and clear.

Answer 12

False

Question 13

TRUE OR FALSE: Enter “investment” if the borrower(s) do not intend to occupy the property.

Answer 13

True

Question 14

TRUE OR FALSE: Under the loan purpose section, select “Other” if the loan is a temporary construction loan.

Answer 14

True

Question 15

TRUE OR FALSE: The borrower must disclose if they have declared bankruptcy in the past seven years.

Answer 15

True

Question 16

TRUE OR FALSE: In the Title Information Section, select Fee Simple On a Reservation if the land is held by an owner with restrictions.

Answer 16

False

Question 17

TRUE OR FALSE: You should only enter the amount of a new second mortgage in Section L4 if the second mortgage is with the same lender.

Answer 17

False

Question 18

TRUE OR FALSE: For three or more borrowers, use any combination of URLA and URLA additional borrower forms.

Answer 18

True

Question 19

TRUE OR FALSE: The final LE must be received by the borrower at least four business days before consummation.

Answer 19

True

Question 20

TRUE OR FALSE: There is only one type of LE for both purchases and refinances.

Answer 20

False

Question 21

TRUE OR FALSE: Services a borrower cannot shop for include credit report fees.

Answer 21

True

Question 22

TRUE OR FALSE: “No tolerance fees” cannot increase at all between the original LE and the final CD.

Answer 22

False

Question 23

TRUE OR FALSE: Fees that are considered 10% tolerance fees include recording fees.

Answer 23

True

Question 24

TRUE OR FALSE: Mortgage interest is always paid in advance.

Answer 24

False

Question 25

TRUE OR FALSE: A discount point generally costs 1% of the loan amount.

Answer 25

True

Question 26

TRUE OR FALSE: The interest rate is the cost that the borrower pays each year to borrow money for a mortgage.

Answer 26

True

Question 27

TRUE OR FALSE: Consummation is when the borrower becomes contractually obligated on the loan.

Answer 27

True

Question 28

TRUE OR FALSE: The borrower must receive the final LE no later than four business days before consummation.

Answer 28

True

Question 29

TRUE OR FALSE: You must provide a revised LE within three business days of changed circumstances.

Answer 29

True

Question 30

TRUE OR FALSE: Business days generally don’t include Saturdays.

Answer 30

False

Question 31

TRUE OR FALSE: HOEPA is part of TILA.

Answer 31

True

Question 32

TRUE OR FALSE: Mortgage loans go to underwriting before processing.

Answer 32

False

Question 33

This role in the loan processing is responsible for gathering verifications/documents to help identify/analyze buyer profile

Answer 33

Processor

Question 34

TRUE OR FALSE: Funds that are not vested are not acceptable liquid assets.

Answer 34

True

Question 35

TRUE OR FALSE: Social Security is considered variable income.

Answer 35

False

Question 36

TRUE OR FALSE: Income not claimed on a tax return cannot be used to qualify.

Answer 36

True

Question 37

Nontaxable income can be grossed up by what percent?

Answer 37

25%

Question 38

How many pay periods are there in a year?

Answer 38

26

Question 39

What is the threshold for an underwriter to consider loan installments on their debt-to-income ratio?

Answer 39

More than 10 months

Question 40

Conventional Loan DTI

Answer 40

28%/36%

Question 41

FHA Loan DTI

Answer 41

31%/43%

Question 42

VA Loan DTI

Answer 42

Backend of 41%

Question 43

USDA Loan DTI

Answer 43

29%/41%

Question 44

How long must a borrower wait to apply for a loan if they had a foreclosure/short sale in the past 7 years?

Answer 44

4 years

Question 45

How long do credit inquiries stay on the credit report?

Answer 45

2 years

Question 46

If an application is received on Tuesday, the creditor must hand-deliver or place the loan estimate in the mail on or before __________.

Answer 46

Friday

Question 47

Which program allows the highest back-end DTI qualification?

Answer 47

FHI (31%/43%)