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MLO > Processing and Underwriting > Flashcards

Processing and Underwriting Flashcards

1
Q

What is the 4 P’s test for advertising?

A

Prominent, Placement, Presented, Proximity

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2
Q

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

A

False

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3
Q

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

A

False

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4
Q

Law that prevents kickbacks and referrals

A

RESPA Section 8

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5
Q

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

A

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

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6
Q

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

A

Borrower’s demographic info

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7
Q

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

A

Section 1b

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8
Q

Section 1c of Borrowers Information pages in URLA

A

Additional employment (if applicable)

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9
Q

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

A

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

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10
Q

Section 1e in Borrower Information pages in URLA

A

Income from other sources

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11
Q

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

A

Alimony, child support, other maintenance

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12
Q

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

A

False

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13
Q

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

A

True

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14
Q

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

A

True

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15
Q

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

A

True

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16
Q

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

A

False

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17
Q

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.

A

False

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18
Q

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

A

True

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19
Q

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

A

True

20
Q

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

A

False

21
Q

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

A

True

22
Q

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

A

False

23
Q

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

A

True

24
Q

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

A

False

25
Q

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

A

True

26
Q

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

A

True

27
Q

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

A

True

28
Q

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

A

True

29
Q

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

A

True

30
Q

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

A

False

31
Q

TRUE OR FALSE: HOEPA is part of TILA.

A

True

32
Q

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

A

False

33
Q

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

A

Processor

34
Q

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

A

True

35
Q

TRUE OR FALSE: Social Security is considered variable income.

A

False

36
Q

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

A

True

37
Q

Nontaxable income can be grossed up by what percent?

A

25%

38
Q

How many pay periods are there in a year?

A

26

39
Q

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

A

More than 10 months

40
Q

Conventional Loan DTI

A

28%/36%

41
Q

FHA Loan DTI

A

31%/43%

42
Q

VA Loan DTI

A

Backend of 41%

43
Q

USDA Loan DTI

A

29%/41%

44
Q

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

A

4 years

45
Q

How long do credit inquiries stay on the credit report?

A

2 years

46
Q

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

A

Friday

47
Q

Which program allows the highest back-end DTI qualification?

A

FHI (31%/43%)

MLO (7 decks)

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