SU # 46__Financial Underwriting Flashcards
Mortgage loan applicants must meet underwriting standards for income, debt, cash, and
net worth.
age.
education.
place of origin.
net worth.
Which of the following best expresses the income ratio used by lenders to assess a loan applicant’s borrowing capacity?
Monthly gross income divided by monthly housing expenses.
Monthly housing expenses divided by monthly gross income.
Monthly housing expenses divided by monthly debt obligations.
Monthly debt obligations divided by monthly net income.
Monthly housing expenses divided by monthly gross income.
RESPA requires that a lender, within three days of receiving the loan application, must give a borrower
a HUD Uniform Settlement Statement.
an itemized bill for all settlement costs.
a Loan Estimate form.
a copy of the full text of the law.
a Loan Estimate form.
What is a “lock-in” loan commitment?
A lender’s time-sensitive agreement to lend a specific amount at a specific interest rate for a specific term.
A borrower’s agreement to borrow from a particular lender at a fixed rate of interest.
A seller’s agreement to carry some or all of the financing necessary for a buyer to purchase the seller’s property.
A loan that is guaranteed to be assumable throughout the term of the loan.
A lender’s time-sensitive agreement to lend a specific amount at a specific interest rate for a specific term.
Larry and Sandy have a combined monthly income of $5,000. Using the FHA and VA debt ratio of 41%, how much monthly housing and debt obligation can they qualify for?
$847
$1,220
$2,050
$2,950
$2,050
ECOA prohibits all of the following underwriting practices EXCEPT
disregarding income from part-time work.
refusing a loan because of the location of the collateral property.
asking applicants how long they have worked at their present job.
asking whether an applicant plans to have children.
asking applicants how long they have worked at their present job.
Regulation Z disclosure requirements apply to which of the following loans?
All loans, secured and unsecured
Agricultural and commercial loans over $25,000.
All loans secured by real property.
All loans secured by a residence.
All loans secured by a residence.
The Equal Credit Opportunity Act protects against discrimination in all of the following areas EXCEPT
physical handicap.
religion.
age.
color.
physical handicap.
When does the initiation of a loan application process occur?
When a prospective borrower first meets with a loan officer or mortgage broker.
When a loan officer or mortgage broker gives an application form to an applicant.
When a loan applicant completes a loan application form.
When a lender receives a completed loan application package from an applicant.
When a lender receives a completed loan application package from an applicant.
The lender’s process of determining a borrower’s ability to repay a loan and evaluating a property is known as
disqualification
underwriting
credit evaluation
screening
underwriting
A lender may deny a loan application and retain the application fee if
the applicant fails to qualify for the loan for any reason.
the application package is incomplete.
the application form contains fraudulent information.
the loan being applied for is not guaranteed by Fannie Mae.
the application form contains fraudulent information.
If an individual is seeking a federally-related loan to finance a residential property located in a designated flood-hazard zone, federal law requires
the seller to purchase flood hazard insurance in the buyer’s name.
the borrower to purchase flood hazard insurance.
the Army Corps of Engineers to survey the property.
the Department of Housing and Urban Development to offer flood hazard insurance at a discount.
the borrower to purchase flood hazard insurance.
If a lender’s loan-to-value ratio is 90%, how much will the lender lend on a house valued at $200,000?
$10,000
$20,000
$180,000
$190,000
$180,000
