Things You Need To Learn

Question 1

1099

Answer 1

Tax form provided to borrower by employer when takes are not withheld

Question 2

3 Types of deeds what are they?

Answer 2

Quitclaim deed, Grant deed, Warranty Deed.

Question 3

3-7-3 Rule

Answer 3

The initial LE must be delivered or placed in the mail to the applicant within 3 business days after receiving an application and 7 days prior to loan consummation.
The Closing Disclosure must be received by the borrower within 3 business days of closing.

Question 4

4 Key Types of Closing

Answer 4

Full Closing, A la carte closing, Mail away closing, Attorney Closing

Question 5

4506-T

Answer 5

Use Form 4506-T to request tax return information. Taxpayers using a tax year beginning in one calendar year and ending in the following year (fiscal tax year) must file Form 4506-T to request a return transcript.

Question 6

A borrower may only have one FHA insured loan at a time with four exceptions:

Answer 6

 Job Relocation (minimum distance 100 miles)
 Increase in Family Size (if approved, the first mortgage must be paid down to 75% LTV)
 Vacating a Jointly Owned Property
 Non-Occupying Co-Borrower

Question 7

A La Carte Closing

Answer 7

 The title company provides the title information to the Lender.
 A notary company contracted by the Lender conducts the signing of the documents.
 The Lender will then perform the disbursement.

Question 8

A QM loan is one that has met the ATR requirements and meets some additional rules that focus on prohibiting risky loan features (predatory lending)

Answer 8

Risky Loan Features
	Negative Amortization
	Interest-only payment feature
	Loan terms in excess of 30 years
	Prepayment Penalties
	Balloon Mortgages

In addition, for all types of QM loans, the points and fees charged to the borrower cannot exceed 3% of the total loan amount unless the loan amount is $100,000 or less.

Question 9

Accrued interest

Answer 9

In finance, accrued interest is the interest on a bond or loan that has accumulated since the principal investment, or since the previous coupon payment if there has been one already. For a financial instrument such as a bond, interest is calculated and paid in set intervals (for instance annually or semi-annually).

Accrued interest will vary depending on what time of the month a loan closes. One reason many people close at the end of the month is because it reduces the interest that accrues in advance of the first monthly mortgage payment.

Question 10

All FHA loans require Mortgage Insurance Premium

Answer 10

FHA charges
 Upfront Mortgage Insurance Premium (UFMIP)
o (an amount equal to 1.75% of the mortgage (loan amount)
 The UFMIP is added to the loan amount to calculate the total loan amount.
 Monthly Mortgage Insurance Premium
o (based on the initial LTV ratio and loan term)

Question 11

Amortization

Answer 11

An amortized loan includes regular periodic payments of both principal and interest, that are paid within the term of the loan. Amortization schedules detail the monthly payments and how much of each payment goes to principal and interest.

Question 12

Annual Income

Answer 12

All the income you’ve earned over the year in wages, salary, tips, bonuses, commissions, and overtime amount to your annual income. In the case of mortgage applications, lenders primarily focus on income through wages or salary.

Question 13

Annual Property Taxes

Answer 13

Annual property reports are documents containing of government property (property titled to the federal government and bought under an award). The list covers property bought between the first day of the award and the federal fiscal year close.

Annual Property Taxes is another prepaid item and is the amount equal to the upcoming tax bill(s). Tax bills can be due annually, semi-annually, or quarterly. The amount to be prepaid is based on the previous year’s tax bill.

Question 14

Appraisal

Answer 14

When you apply for a home loan, your lender will require that an appraisal is done on the property. This process involves assessing the value of the home through an inspection and by comparing it to similar real estate in the area.

Question 15

Appraisal Fraud

Answer 15

Home appraisal fraud occurs when a home is fraudulently inflated beyond its actual value. A higher home appraisal usually leads to a higher home price, and more cash to the home seller. A fraudulent higher appraisal report is bad news to buyers, as it can add a higher debt burden to the purchase of a home.
Generally, home appraisal fraud comes with some red flags, including key data missing from the appraisal or fake renovations cited on the appraisal. If you suspect your home appraisal has red flags, you can always get a second appraisal—this may cost up to $500 depending on the size of the home, but it might be worth it if it keeps you from a bigger issue.

Question 16

Appraisal requirements

Answer 16

Property Conditions
 Must be habitable
 Must have permanent source of heat
 If the property is located on a private road, a private road maintenance agreement is required

Question 17

Appraised Value

Answer 17

An appraised value pertains to the assessed value of real property in the opinion of a qualified appraiser or valuer. It is usually used as a pre-qualification & risk-based pricing factor related to the issuance of mortgage loans by a financial institution.

Question 18

APR

Answer 18

The annual percentage rate is the cost of borrowing money from the lender, shown as a percentage of your mortgage amount. It is calculated by using a formula set by federal law and disclosed to the customer to aid in comparing different offers of credit. Finance charges imposed by the lender are included in this calculation. In addition, the APR includes any origination fees and mortgage insurance charged by the lender.

Question 19

ARM

Answer 19

Adjustable rate mortgages have interest rates that change periodically. Such loans have an introductory period of low, fixed rates, after which they vary, depending on an adjustment index.

Question 20

ATR

Answer 20

Ability to repay

Question 21

ATR and QM rules do not apply to

Answer 21

Open-ended credit plans
HELOC’s
Reverse Mortgages
Temporary bridge loans with terms of 12 months or less
Construction loans and construction-to-perm loans with terms of 12 months or less

Question 22

ATR and QM rules do not apply to:

Answer 22

 Open-ended credit plans
 HELOC’s
 Reverse Mortgages
 Temporary bridge loans with terms of 12 months or less
 Construction loans and construction-to-perm loans with terms of 12 months or less

Question 23

ATS

Answer 23

Approval to schedule

Question 24

Attorney Closing

Answer 24

A Full closing where the Attorney's office:
	Completes the Title work
	Prepares the Settlement Statement
	Conducts the Signing
	Disburses the funds

Question 25

Balloon Mortgage

Answer 25

is payable in full after a period that is shorter than the term of the loan.

Question 26

Balloon Payment

Answer 26

Balloon loans come with large payments that are to be paid at the end of the mortgage term, separate from the mortgage payments made monthly.

Question 27

Bankruptcy

Answer 27

Declaring bankruptcy means that you have submitted an application to a court that admits you are unable to pay back your debts. Filing for bankruptcy ruins your credit, which leads to problems when applying for loans in the future.

Question 28

Banks

Answer 28

```  Depository institutions  Take and lend money  Holds loans in portfolio  Sells loans to Secondary Market  Offers various loans, credit cards, student loans etc. ```

Question 29

Bond Loans

Answer 29

these loans are typically managed by each state since each state has their own unique bond program(s). These programs target first time homebuyers and low to moderate income families. They mostly provide great pricing and down payment assistance.

Question 30

Borrower

Answer 30

A mortgage borrower is someone who takes out a home loan to purchase a property. When that person borrows the money, they are making a commitment to pay back that amount in full, on time, and with interest.

Question 31

Bridge Loan

Answer 31

enables customers to access the equity in their current home and use it towards the down payment on the home they are purchasing before the current home is sold. This is also referred to as “gap financing”.

Question 32

Buy-Down Mortgage

Answer 32

the interest rate is reduced during the initial years of the loan gradually increasing each year until the rate becomes fixed at the note rate.

Question 33

CAPITAL

Answer 33

Capital refers to the liquid assets the borrower has available to make the down payment on the loan, pay the closing costs, and have on hand reserves necessary to make the initial mortgage payments. This can be simplified into 2 factors: cash to close (equity/down payment/closing costs) and reserves (money available after closing).

Question 34

Cash-out Refinance

Answer 34

A cash-out refinance is when you replace your current home loan with a new mortgage. You agree to a larger loan amount in order to use the equity you've earned on your home. out limited to the lesser of 2% of the principal amount of the new loan or $2,000 Power of Attorney not permitted for FNMA; sometimes permitted for FHLMC

Question 35

CD

Answer 35

Certificate of Deposit (CD)

Question 36

CD

Answer 36

Closing Disclosure

Question 37

Certificate Of Eligibility (COE)

Answer 37

Is issued by the VA and is evidence that the veteran meets the basic requirements for a VA loan.

Question 38

CHARM

Answer 38

Consumer Handbook on Adjustable Rate Mortgages (CHARM) This book informs the borrower of the risks involved with adjustable rate mortgages.

Question 39

CLA

Answer 39

conditional loan approval

Question 40

Closing

Answer 40

The legal execution/consummation of the loan. This includes the signing and recording of all loan documents, creating the mortgage,

Question 41

Closing checklists

Answer 41

Closing checklists are important to keep track of all the items that need to be taken care of prior to closing. It lists everything from the payments that need to be made to the documents that need to be signed.

Question 42

Closing costs and what is included *hint 9

Answer 42

Closing costs involve all the fees and costs that need to be paid before or at the time of closing. Your mortgage contract and disclosures go over all the costs that will be incurred by you as the buyer, the seller, and the lender. Costs incurred may include loan origination fees, discount points, appraisal fees, title searches, title insurance, surveys, taxes, deed-recording fees and credit report charges.

Question 43

Closing Disclosure

Answer 43

Out of the numerous documents that you will come across during the mortgage process, your Closing Disclosure is one of the most important. This 5-page document specifies the terms of your home loan, such as your monthly payments, interest rates, and closing

Question 44

Closing Disclosure

Answer 44

Lists and describes all the costs associated with the transaction

Question 45

Closing Disclosure CD

Answer 45

A five-page form that provides final details about the mortgage loan that has been selected. It includes the loan terms, projected monthly payments, how much the borrower will pay in fees and other costs involved in getting a mortgage.

Question 46

Closing establishes

Answer 46

Closing establishes a first lien on the property and creates an enforceable debt. In other words, it gives the mortgage banker the right to expect repayment of the borrowed funds and recourse should the borrower default on the loan.

Question 47

Co-Borrower

Answer 47

By having co-borrowers join your loan application, their income, assets, and credit score can help you qualify for a loan and get lower interest rates. Co-borrowers are equally liable to pay back the loan

Question 48

Co-signer

Answer 48

A co-signer can help you qualify for mortgages by signing the loan application with you. Co-signers have no interest in owning the property, but their credit score, income, and assets will count towards getting you a lower interest rates.

Question 49

COC

Answer 49

Change of Circumstance

Question 50

COE

Answer 50

“Entitles” the Veteran to a loan guarantee of 25% of the published county limit. The guarantee protects the lender against default which allows the lender to lend up to 100% LTV to our Veterans with confidence. The COE indicates the amount of entitlement available to the veteran.

Question 51

COFI

Answer 51

The 11th District Cost of Funds Index (COFI) is a monthly weighted average of the interest rates paid on checking and savings accounts offered by financial institutions operating in Arizona, California, and Nevada.

Question 52

Combined Loan to Value (CLTV)

Answer 52

The combined loan to value (CLTV) ratio is a calculation used by mortgage and lending professionals to determine the total percentage of a homeowner's property that is encumbered by liens (debt obligations).

Question 53

Community Property

Answer 53

In states that recognize community property, a special form of joint tenancy exists between husband and wife, with each owning one-half interest. Upon death, the decedent's interest passes in a manner like tenants in common. Words in the deed such as "John and Mary, husband and wife as community property", establishes community property ownership.

Question 54

Conforming Loan

Answer 54

A conforming loan is a mortgage that is equal to or less than the dollar amount established by the limit set by the Federal Housing Finance Agency (FHFA) and meets the funding criteria of Freddie Mac and Fannie Mae.

Question 55

Conventional Loan

Answer 55

A conventional loan is a type of mortgage loan that is not insured or guaranteed by the government. Instead, the loan is backed by private lenders, and its insurance is usually paid by the borrower These mortgages have an added risk, and therefore require higher down payments. PMI

Question 56

Correspondent Lenders

Answer 56

 Originate and close loans  Sell loans to other mortgage bankers  Servicing and income are transferred to the new loan owner

Question 57

CPA

Answer 57

Certified Public Accountant

Question 58

CPL

Answer 58

Closing Protection Letter

Question 59

Credit history

Answer 59

When applying for a mortgage, lenders will be looking at your credit history, which is a compilation of your borrowing and payment habits. It shows the lender how likely you are to repay the loan they grant you.

Question 60

Credit Reports

Answer 60

The credit report is a vital part of the mortgage qualification process. Accurately accounting for credit is one of the most critical components of properly qualifying a borrower. It is your responsibility to view a customer’s credit report and determine his/her eligibility and willingness to repay the debt. Credit reports and supporting documents cannot be more than 60 days old at the time of closing.

Question 61

Credit Score

Answer 61

Your credit score is a number that represents your creditworthiness to lenders who are determining whether to grant you a loan. FICO scores are the most widely accepted credit scores.

Question 62

Credit Union

Answer 62

 Service driven; Customers are called Members  Regulated by the National Credit Union Administration  Lending for its own portfolio  Involved sparingly in the Secondary Market

Question 63

Debt Ratio

Answer 63

The debt ratio shows your long-term and short-term debt as a percentage of your total assets. The lower your debt-ratio, the better your chances are of qualifying for a mortgage.

Question 64

Decoupled ARM

Answer 64

Decoupled ARM products are interest only ARMs with fixed periods that do not match the interest only period. Most interest only products (3/1, 5/1, 7/1) have a 10-year interest only repayment period.

Question 65

Deed

Answer 65

a legal document that contains information about who owns a particular property. It contains both the previous owner’s name and the current owner’s name.

Question 66

Derogatory Credit

Answer 66

Derogatory credit can be defined as anything on the customer’s credit that has a negative impact on the customer’s qualification for financing. Derogatory credit may require satisfaction and/or written letter of explanation from the borrower depending on the severity of the situation.

Question 67

Discloser

Answer 67

During the mortgage transaction process, you will be given disclosure documents that provide different details about the home loan agreement.

Question 68

Discount Points

Answer 68

Discount points are considered a form of prepaid interest on your home loan. These "points" are a percentage of your loan paid up front that consequently lowers the mortgage's interest rate.

Question 69

DLA

Answer 69

Date of last activity

Question 70

Down Payment

Answer 70

The down payment on your house is the amount you pay the lender upfront in order to secure the loan. The amount differs based on what you can afford, and the loan requirements that vary according to the lender.

Question 71

Down Payment Grant

Answer 71

A major hurdle people face when trying to buy a home is saving up for the down payment. To help overcome this issue, there are down payment assistance programs that provide homebuyers with grants that go toward the up front and closing costs.

Question 72

DTI

Answer 72

Debt to income This relation is expressed in percentage form and is also referred to as the customer’s debt-to-income (DTI) ratios. In most cases, there are two ratios that need to be considered: the primary housing ratio (front ratio) and the total obligation ratio (back ratio).

Question 73

DU

Answer 73

Desktop Underwriter

Question 74

Earnest Money

Answer 74

You pay the earnest money deposit once your offer for purchase has been accepted by the seller, to prove that you are invested in buying the home.

Question 75

Elements of title insurance

Answer 75

Title commitments are ordered by the lender “without exceptions” to coverage. Most investors will not purchase mortgages “with exceptions” and certain endorsements are required.

Question 76

Eligibility

Answer 76

To become eligible for an new FHA mortgage or an FHA refinance, there are certain criteria you'll need to meet as a borrower. When it comes to a borrower's eligibility, the FHA loan program offers a lot of flexibility.

Question 77

Entitlement

Answer 77

The amount available to the Veteran for use on a | VA loan

Question 78

Equal Credit Opportunity Act (ECOA) also known as Reg B – “Be Equal”

Answer 78

was developed to protect borrowers against discrimination. Discrimination is defined by ECOA as an act against a person’s age, sex, race, religion, national origin, marital status, and/or income from public assistance programs. In addition to the discrimination category, the Act also states that borrowers are entitled to a copy of their original appraisal. The Equal Credit Opportunity Notice must indicate if the applicant is approved or denied within 30 days of receiving a complete application.

Question 79

Equity

Answer 79

Home equity is the amount of ownership you have in your home. The equity on your home increases as you make payments, because you own more of it.

Question 80

Equity Lines

Answer 80

``` Equity lines often referred to as a HELOC has the following characteristics:  Variable rate  Draw period  Repayment period  Works like a credit card (open ended) ```

Question 81

Escrow

Answer 81

Property taxes and the homeowner’s insurance policy of the subject property are collected monthly within the mortgage payment. Money is paid directly to the escrow account where it is held until the taxes and insurance bills are due.

Question 82

Escrow

Answer 82

Your escrow account is set up by your lender in order to collect funds that go toward paying property taxes and home insurance.

Question 83

Escrow Analysis

Answer 83

is a statement that explains: a) Escrow account balance b) Dates and Amounts of escrow disbursements c) Was there a shortage, deficiency balance, or overage? d) Payment adjustment

Question 84

Escrow Cushion

Answer 84

An escrow cushion is used to offset any shortages an escrow account may incur because of increases in property taxes and/or homeowner’s insurance.

Question 85

Examples of derogatory credit

Answer 85

30, 60, 90+ Days Late, Past Due, Charge off, Collection, Judgment, Lien, Bankruptcy, foreclosure, short sale and Deed in Lieu of foreclosure

Question 86

face value

Answer 86

the value printed or depicted on a coin, banknote, postage stamp, ticket, etc., especially when less than the actual or essential value.

Question 87

Fair and Accurate Credit Transactions Act (FACTA)

Answer 87

primarily to protect consumers from identity theft. The Act stipulates requirements for information privacy, accuracy and disposal, and limits how consumer information may be shared.

Question 88

Fair Credit Reporting Act (FCRA)

Answer 88

to promote the accuracy, fairness, and privacy of consumer information contained in the files of consumer reporting agencies. It is intended to protect consumers from the willful and/or negligent inclusion of inaccurate information on their credit reports.

Question 89

Fair Housing Laws

Answer 89

Laws are designed to protect the consumer from unfair or discriminatory practices such as: Steering: Directing a borrower to an employee for reasons based on discrimination. Redlining: Intentionally deciding not to lend to an applicant whose property is in an area of town. Each property is evaluated by an appraisal, not based on a neighborhood’s reputation. Employee Opinions: You must be careful not to express an opinion based on an applicant’s credit worthiness or financial situation

Question 90

Fannie Mae FNMA

Answer 90

The Federal National Mortgage Association alson known as Fannie Mae is a government agency that buys mortgages from lenders in order for them to reinvest their assets. Its mission is to stimulate the secondary mortgage market in the U.S. and increase availability of low cost housing. largest private investor for conventional mortgages

Question 91

Fannie Mae Types of Assessment of risks

Answer 91

Approve/Eligible, Approve/Ineligible, Refer/Eligible, Refer/Ineligible The first part of the loan decision is referring to the credit profile and whether the borrower meets basic investor guidelines The second part of the loan decision refers to whether the loan is deliverable to FNMA – often a recommendation is given for the decision to be changed to Eligible

Question 92

Fee Simple

Answer 92

The most common form of ownership of real estate. Represents absolute ownership only limited by government powers, encumbrances, or conditions in the title deed.

Question 93

FHA

Answer 93

The Federal Housing Administration, or the FHA, is a government-run agency that provides insurance on FHA-approved mortgage loans, in order to increase affordable housing in the U.S. which protects lenders from significant losses. . FHA loans allow the borrower to borrow up to 96.5% of the value of the home. In some cases, the 3.5% down payment requirement can come from a gift or grant, which makes FHA loans popular with first-time homebuyers. FHA does not lend money to the mortgagor; it only insures home mortgage loans made by private lenders such as mortgage bankers, savings & loans, and banks. The insurance covers the lender’s financial exposure in the case of foreclosure. All FHA loans begin with the issuing of a Case Number assigned through HUD, and all FHA loans must follow HUD’s appraisal requirements for property condition, health, and safety standards.

Question 94

FHA Down Payment Requirements

Answer 94

FHA requires min 3.5% of the sales price for the down payment  Purchase – 96.5%  Rate and Term refinance – 97.75%  Cash Out refinance – 80%  Non-Arm’s length transaction – 80% (there are some exceptions)

Question 95

FHA Down Payment Requirements and where can they come from

Answer 95

the down payment requirement for FHA is less than a conventional 95% loan and allows more sourcing options. FHA requires min 3.5% of the sales price for the down payment. Borrowers do not have to put any of their own money into the deal. Down payment can come from:  Borrower’s own funds  100% gift from a close family member or relative  Secured borrowed funds

Question 96

FHA funding fee

Answer 96

FHA funding fees include the insurance premiums required to secure the loan. The amount you pay towards this insurance depends on the size of the loan, its term, and the down payment you made.

Question 97

FHA Limits

Answer 97

The FHA has established limits on amount it can insure on government-backed loans. These limits vary based on factors such as location, type of property, and parameters for conventional loans.

Question 98

FHA Min Standards

Answer 98

HUD requires that any home being financed with an FHA mortgage meets the FHA's Minimum Standards. In order for a loan to be granted, the property must be deemed safe, secure, and sound.

Question 99

FHA Refinance

Answer 99

You have the option to refinance your home through the same or a different lender, in order to replace your current mortgage with a new one that offers lower interest rates, or to borrow cash against your home's equity.

Question 100

FHFA

Answer 100

The Federal Housing Finance Agency is an independent federal agency in the United States created as the successor regulatory agency of the Federal Housing Finance Board, the Office of Federal Housing Enterprise Oversight, and the U.S. Department of Housing and Urban Development government-sponsored enterprise mission team, absorbing the powers and regulatory authority of both entities, with expanded legal and regulatory authority, including the ability to place government sponsored enterprises into receivership or conservatorship.

Question 101

FICO score

Answer 101

Your FICO score is a number that represents your creditworthiness. One of the most widely accepted credit scores, this number comes from an algorithm developed by Fair, Isaac and Company in the 1950. FICO debuted as a general-purpose score in 1989.

Question 102

First Time Homebuyer

Answer 102

The U.S. Department of Housing and Urban Development (HUD) sets specific criteria to classify first time homebuyers. This helps lenders properly identify these consumers and consequently allows HUD to track that number annually.

Question 103

Fixed rate

Answer 103

A fixed rate mortgage has an interest rate that remains the same for the entire term of the loan. If your interest rate is fixed, your monthly payments do not rise or fall.

Question 104

Fixed Rate Mortgage

Answer 104

A mortgage in which the interest rate remains fixed for the life of the loan. Even though it means the principle and interest will not change over the life of the loan, the total payment amount can change due to property tax and homeowner’s insurance premiums. This is the preferred type of loan for customers due to the stability and predictability of the rate being fixed.

Question 105

Floating

Answer 105

mortgage rate is one that is subject to daily market fluctuations. If the interest rate rises by the time you close on your mortgage, you'll lose some buying power. If the rate falls, you'll earn some buying power.

Question 106

Flood Disaster Protection Act

Answer 106

When floods strike, victims often lose virtually all their possessions. Most homeowner insurance policies do not cover damages caused by flooding; therefore, borrowers who are found to be in a flood zone must carry flood insurance. The Flood Disaster Protection Act requires mortgage lenders notify borrowers in high-risk flood areas. If a community participates in the National Flood Insurance Program and the necessary improvements are in a flood zone, the lender must require the applicant to purchase the insurance for the life of the loan.

Question 107

Foreclosure

Answer 107

A foreclosure is when a borrowers gives up all rights to his/her home as a result of not making monthly mortgage payments. The foreclosed property is then seized and sold by the lender to recover the loss.

Question 108

Forms of Ownership

Answer 108

Joint Tenancy, Tenancy by Entirety, Tenancy in Common, Community Property and sole ownership Special Forms of Ownership is Tenancy in Partnership, Co-operative, Condominium, Planned Unit Development, Title Holding Trust

Question 109

Fraud for Housing

Answer 109

This type of fraud can occur when a borrower or potential homebuyer is motivated to acquire or maintain ownership of a house. The borrower may misrepresent income and asset information on a loan application or entice an appraiser to manipulate a property’s appraised value. These fraud for housing crimes can be further broken down into different types of mortgage fraud.

Question 110

Fraud for Property

Answer 110

This type of mortgage fraud, prioritized by the FBI, is usually committed by industry insiders who use their specialized knowledge or authority to commit or facilitate the fraud. Many times, mortgage fraud for profit involves collusion by industry insiders, such as bank officers, appraisers, mortgage brokers, attorneys, loan originators, and other professionals. Fraud for profit focuses on misusing the mortgage lending process to get cash and equity from lenders or homeowners.

Question 111

Freddie Mac FHLMC

Answer 111

The Federal Home Loan Mortgage Corporation also known as Freddie Mac is a government agency that buys mortgages from lenders in order for them to grant more loans to home buyers. The agency works to stimulate the real estate market and increase availability of low cost housing. further authority to purchase loans from mortgage bankers, commercial banks, and HUD approved mortgages. Also considered a GSE.

Question 112

Freddie Mack Types of Assessment of risk

Answer 112

Accept or Caution LPA uses Accept or Caution for the overall risk assessment but provides additional detailed analysis within the Findings LPA also uses color-coding throughout the Loan Evaluation Summary for visual display of risk assessment

Question 113

Full Closing

Answer 113

The Title Company is responsible for doing everything for this type of closing. This includes:  Preparing the final Closing Disclosure  Conducting the signing  Disbursing the funds

Question 114

Fully Indexed Rate

Answer 114

At each adjustment, the lender determines the fully indexed rate for the specific ARM product.  Index + Margin = Fully Indexed Rate The Customer’s rate will then adjust based on the ARM’s preset CAPS.

Question 115

Functions of the Secondary Mortgage Market

Answer 115

 Allows lenders to generate money to create mortgage loans  Sale of loans on the Secondary Market allows lenders to transfer portions of risk to the investor  Sale of loans help lenders manage the risk associated with negative cash flow  Sale of loans on the Secondary Market can create additional fee income Typically, there are two types of risk: o Risk of loss due to borrower default o Risk of loss due to interest rate changes

Question 116

Funding

Answer 116

The process of preparing and disbursing loan proceeds.

Question 117

General Warranty

Answer 117

Warranty against any claims (more common for residential property sales and transfers)

Question 118

GFE

Answer 118

Good Faith Estimate

Question 119

Ginne Mae GNMA

Answer 119

The Government National Mortgage Association split into two distinct corporations. To broaden their access to capital, mortgage bankers worked with GNMA to develop an entirely new concept for selling VA and FHA Mortgages

Question 120

Good Faith Estimate

Answer 120

The Good Faith Estimate is a document that offers potential homebuyers basic information about their home loan, with an estimate of the costs that go into acquiring one.

Question 121

Government Loan

Answer 121

A government-backed loan is a loan subsidized by the government, also known as a Federal Direct Loan, which protects lenders against defaults on payments, thus making it a lot easier for lenders to offer potential borrowers lower interest rates. ... VA loan

Question 122

Grant Deed

Answer 122

Transfers ownership and implies certain things, such as: the title has not already been transferred to another person, except as implicated in the deed.

Question 123

Hazard Insurance

Answer 123

Home insurance, also commonly called homeowner's insurance, is a type of property insurance that covers a private residence. It is an insurance policy that combines various personal insurance protections, which can include losses occurring to one's home, its contents, loss of use, or loss of other personal possessions of the homeowner, as well as liability insurance for accidents that may happen at the home or at the hands of the homeowner within the policy territory. premiums may also be required to be prepaid by the borrower if the insurance policy is set to renew just after closing the refinance loan. On a purchase, the premium must be paid prior to or at closing by the borrower. If paid prior to closing, the borrower will need a receipt to show that this item has been paid.

Question 124

Hazard Insurance Policy

Answer 124

Valid hazard insurance policy that covers loss or damage from fire, weather, and other hazards

Question 125

HELOC

Answer 125

Home equity line of credit

Question 126

HERA

Answer 126

The Housing and Economic Recovery Act of 2008 strengthened governmental oversight of FNMA and FHLMC

Question 127

HOA and HOI

Answer 127

Homeowners association homeowners insurance

Question 128

Home Equity Combined Loan to Value (HCLTV)

Answer 128

It stands for High Combined Loan to Value it is similar to the CLTV because it takes into consideration the total loans on the property. The difference between the two is this ratio considers the full available line amount.

Question 129

Home Equity loan

Answer 129

As a homeowner, you have the option to tap into your home's equity and borrow money using it as collateral. This is called a home equity loan, but is also known as a second mortgage since it is in addition to the actual home loan.

Question 130

Home inspection

Answer 130

As a borrower, you may need to get a home inspection done, where a professional evaluates the condition of the house based on a visual assessment. The report will give you details on any problems with condition of the home.

Question 131

Home Mortgage Disclosures Act (HMDA) also known as Reg C – “Chumda”

Answer 131

HMDA’s purpose is to provide the public with information that shows if depository institutions are serving the housing credit needs of the communities in which they are located. HMDA requires the lender to gather and compile information both on the applications for mortgage as well as for the loans purchased. The lender must then report this information in a LAR “Loan Application Register.” The Department of Housing and Urban Development (HUD) serves as the federal supervising agency. HUD is required to issue a report concerning the lender’s lending activity during the previous calendar year. The lender must make this report available to the general public for review and inspection.

Question 132

Homeowner’s Protection Act (HPA)

Answer 132

HPA = PMI A law passed in the United States Congress and signed by President Bill Clinton in 1998. It is designed to protect homeowners who have mortgages on their homes that include private mortgage insurance or PMI.

Question 133

HUD

Answer 133

U.S. Department of Housing and Urban Development is a government organization that works to increase affordable housing by implementing programs and policies that stimulate the real estate market.

Question 134

HUD-1 Settlement Statement

Answer 134

The HUD-1 Settlement Statement was a document that outlined home loan terms. It was replaced by the Closing Disclosure form as of October, 2015, under the administration of the Consumer Financial Protection Bureau.

Question 135

Income Fraud

Answer 135

Reporting inaccurate income information to get a better deal, or a bigger loan, is another common form of mortgage fraud. Basically, someone fudging the facts on income is trying to qualify for a mortgage loan they otherwise may not get. Like home appraisal fraud, income fraud comes with some warning signs attached, including generic, instead of specific job titles, and the inability of the mortgage lender to confirm an applicant's employer of record. Another warning sign—a mortgage applicant's employment income filed doesn't match the household assets or bank statements.

Question 136

Index

Answer 136

is a financial indicator of inflation. The specific ARM program dictates the index used to determine the interest rate. Examples of an index are:  1-Year Treasury Bill (T-Bill)  Constant Maturity Treasury (CMT)  Secured Overnight Financing Rate (SOFR)  Cost of Funds Index (COFI)

Question 137

Installment

Answer 137

Installment credit involves a set amount borrowed, a set monthly payment and a set timeframe of repayment. Interest charges are pre-determined and calculated into the set monthly payments. Common forms of installment credit agreements are home mortgages and auto loans. Installment credit is also typically secure. Secure credit requires security for the lender. The borrower must provide collateral, something of value pledge in order to guarantee loan repayment. If the borrower fails to repay, or defaults on the loan, the lender may confiscate the collateral. A home is an example of collateral on a mortgage, and a vehicle on an auto loan. If the borrower were to default, the home or vehicle would be repossessed.

Question 138

Interest Only (IO)

Answer 138

lower monthly payments are given to the customer for a set period because only the interest is being paid on the loan. No money is going towards principle during this time, which means the principle loan balance remains the same. Once the set interest only period is over, the loan re-amortizes to include principle over the remaining term - which causes a dramatic increase in the monthly payment.

Question 139

Interest Rate

Answer 139

is a percentage of the loan amount that you pay the lender as the cost for borrowing money. A mortgage can have a fixed or adjustable interest rate.

Question 140

Involuntary Conveyance

Answer 140

Transfer is involuntary where it occurs contrary to the owner’s intention. Common involuntary conveyances are:  Eminent Domain: The government exercises its power to condemn private property for public use, such as building a road, and compensates the owner.  Adverse Possession: Ownership of another’s property can be claimed by possessing and using the property openly as one’s own. Often known as “squatter’s rights”, it may be possible for ownership rights to shift to the possessor, if use and possession continue uninterrupted for a required period.  Foreclosure: A mortgaged property is sold in a legal process to pay an outstanding debt resulting from default on the mortgage, failure to pay real estate taxes, or another encumbrance.  Intestate Succession: When an individual dies, without a valid will in place, property owned by the individual will be transferred according to local law in a conveyance known as Intestate Succession.

Question 141

ISAOA/ATIMA

Answer 141

Its Successors and/or Assigns / As Their Interests May Appear

Question 142

Joint Loan

Answer 142

When you enter a mortgage agreement with a co-borrower who is equally responsible to repay the loan, it is called a joint loan. Having another credit score and income contributing the loan application can help qualify for a home loan.

Question 143

Joint Tenancy

Answer 143

Property is owned by two or more persons at the same time in equal shares. Unity of time, title, interest, and possession is vested in each joint tenant (four unities). Each joint tenant has an undivided right to possess the whole property and a proportionate right of equal ownership interest. When one joint tenant dies, his/her interest automatically vests to the surviving joint tenant(s) by operation of law. Words in the deed such as "John and Mary, as joint tenants with right of survivorship and not as tenants in common", establishes title in joint tenancy. Some states do not allow this form of property ownership.

Question 144

Judicial Foreclosure

Answer 144

There are certain states that require foreclosure procedures to occur judicially. A judicial foreclosure is an action conducted through the court in the state where the property is located. This means that a legal process must occur in court before a property can be foreclosed and sold.  Foreclosure – This is commenced with a judicial proceeding in civil court, usually in the legal jurisdiction of the property location and always with local outside counsel  Strict Foreclosure - This is another form of foreclosure by a judicial proceeding occurring in civil court, but there is no public sale  Decree of Judgment of Foreclosure – Divests the mortgagor of title to the property and vests it directly on the mortgagee. This procedure usually requires a finding by the court that the property is insufficient collateral for the debt

Question 145

Jumbo loan

Answer 145

A jumbo loan is a mortgage with an amount that exceeds the limits set by Fannie Mae and Freddie Mac. A jumbo loan is a good option if you're looking to buy an expensive, luxury home, can afford a large down payment, and have a great credit score The maximum amount for a conforming loan is $510,400 in most counties, as determined by the Federal Housing Finance Agency (FHFA). Homes that exceed the local conforming loan limit require a jumbo loan.

Question 146

LAR

Answer 146

Loan Application Register.

Question 147

LE Loan Estimate

Answer 147

A three-page disclosure triggered when an application is made to a mortgage company. The loan estimate provides a summary of loan terms, loan costs and other closing costs

Question 148

Leasehold

Answer 148

the holding of property by lease. Often contrasted with freehold.

Question 149

Leasehold

Answer 149

A form of property ownership where one party buys the right to occupy property for a given length of time usually measured in decades. As the leasehold is a legal estate, it may be purchased and sold. The lease holder has the right to occupy the property paying rent to the owner until the end of the lease.

Question 150

Lender

Answer 150

Your lender is the person or institution granting you a mortgage loan. Lenders loan you money to buy a home, with the understanding that you will make regular payments, with interest, to pay off the loan

Question 151

Lien Theory

Answer 151

o The borrower will hold the deed to the real estate property for the life of the mortgage. The buyer promises to make payments on the mortgage according to the terms spelled out in the financing agreement

Question 152

Living Trusts

Answer 152

If mortgages are closing in the name of a living trust, a trust agreement must be provided, that meets investors guidelines.

Question 153

LO

Answer 153

The loan officer works at the lending institution where you've applied for a mortgage at. They are responsible for matching a mortgage program to your needs and processing your loan application.

Question 154

Loan application

Answer 154

To get the mortgage process underway, you have to fill out and submit a loan application to your lender. The application form and its supporting documents are used to determine your eligibility for the home mortgage.

Question 155

Loan Balance

Answer 155

Your loan balance is the amount you still owe on the mortgage principal, which is the original sum you borrowed. A portion of your monthly payments go towards paying off the balance.

Question 156

Loan Origination

Answer 156

is the process by which a borrower applies for a new loan, and a lender processes that application. Origination generally includes all the steps from taking a loan application up to disbursal of funds (or declining the application).

Question 157

Loan Processing

Answer 157

The gathering and analyzing of loan documents and verifications to complete the loan file and submit for approval.

Question 158

Loan Term

Answer 158

A loan term is the amount of time during which a borrower makes monthly payments towards a home loan. The loan term is subject to change, depending on the borrower's payment habits and possible refinancing of the mortgage.

Question 159

Loan to Value Ratio

Answer 159

The loan-to-value ratio compares the loan amount to the actual value of the house. The LTV metric is used to determine the risk of granting a mortgage loan, as well as the mortgage insurance rates and costs that go with it.

Question 160

Locking

Answer 160

a mortgage interest rate means you'll have a rate that won't budge from the time your lender offers it to you until you close on your home loan.

Question 161

LPA

Answer 161

Loan Product Advisor

Question 162

LPA

Answer 162

Loan Product Advisor

Question 163

LTV

Answer 163

Loan to Value

Question 164

Mail away Closing

Answer 164

 Two borrowers are signing in different locations at different times. (Can be done as a Full or A La Cart Closing)

Question 165

Margin:

Answer 165

is the constant amount added to the index to determine the new interest rate at each adjustment. This has a direct effect on the customer’s new payment

Question 166

MBS

Answer 166

mortgage-backed security (MBS) is an investment similar to a bond that is made up of a bundle of home loans bought from the banks that issued them.

Question 167

MC

Answer 167

Mortgage Consultant

Question 168

Merged In-file

Answer 168

The contents of the report are not verbally verified. They are computer generated by the credit agencies. A merged in-file must contain information from all 3 national credit bureaus (repositories): Experian, TransUnion, and Equifax

Question 169

MIP

Answer 169

Mortgage Insurance Premium Is needed to qualify for an FHA-approved loan, you will be required to pay a mortgage insurance premium. This insurance protects lenders from incurring a loss in case you are unable to make monthly payments

Question 170

Monthly Payment

Answer 170

Monthly payments are made to pay off a mortgage loan. The amount goes towards paying the principal balance and interest, and is determined according to the down payment, term, interest rate and cost of the property.

Question 171

Mortgage Banker

Answer 171

 An individual, firm or corporation  Originates, sells and services loans primarily  May be a subsidiary of a bank  Rely on sales on the Secondary Market

Question 172

Mortgage Broker

Answer 172

 Sells loans to banks and mortgage bankers  May or may not close loans in their own name  Do not retain servicing of loans

Question 173

Mortgage Closing

Answer 173

When buying a home, the mortgage closing on a home is the final step in the transaction between you and the seller. This settlement meeting is when property title is handed over to the new homeowner, and funds are transferred to the seller in exchange.

Question 174

Mortgage Instruments

Answer 174

evidences the mortgage lender’s security interest in the real property. In most states, this instrument is a “mortgage” in other states it is a “deed of trust” or a “security trust deed”. The mortgage instrument gives a complete legal description of the property and provides for conveyance of the property from the borrower (Mortgagor) to the lender (Mortgagee) in case of default on the note. There will always be at least two mortgage instruments required to have a valid transaction. The first will create the debt or promise to pay, and the second will secure the loan to their property. Generally, these are done with a Promissory Note and a Mortgage or Deed of Trust.

Question 175

Mortgage Insurance Requirements

Answer 175

All FHA loans require Mortgage Insurance Premium FHA charges  Upfront Mortgage Insurance Premium (UFMIP) o (an amount equal to 1.75% of the mortgage (loan amount)  The UFMIP is added to the loan amount to calculate the total loan amount.  Monthly Mortgage Insurance Premium o (based on the initial LTV ratio and loan term)

Question 176

Mortgage Servicing

Answer 176

Mortgage servicing plays a vital role in the management of mortgage loans, from origination to final disposition. It is the final step in the mortgage process and generally has the longest duration. Servicing a mortgage typically involves collecting payments and handling customer service, escrow accounts, collections, loan modifications, bankruptcy, and foreclosures.

Question 177

Mortgage Surveys

Answer 177

The mortgage survey shows the perimeter of the subject property and all the structures located within that boundary. It also lists the legal description of the property. The title company determines if a survey is required. A copy of an existing survey may be acceptable with a borrower certification that there have been no changes on the property since the survey was performed. The survey should show:  Easements or encroachments  Access to and from the property  Flood zone boundaries

Question 178

Multiple FHA Loans

Answer 178

A borrower may only have one FHA insured loan at a time with four exceptions:  Job Relocation (minimum distance 100 miles)  Increase in Family Size (if approved, the first mortgage must be paid down to 75% LTV)  Vacating a Jointly Owned Property  Non-Occupying Co-Borrower

Question 179

net proceeds

Answer 179

Net proceeds are the final amount a seller receives from the sale of an asset after all costs have been taken into consideration. Depending on the asset, the cost can include fees, commissions, advertising costs, and taxes.

Question 180

non-arm's length transaction, also known as an arm-in-arm transaction

Answer 180

refers to a business deal in which buyers and sellers have an identity of interest; in short, buyers and sellers have an existing relationship, whether business-related or personal.

Question 181

Non-Conforming Loan

Answer 181

A non-conforming loan is a loan that fails to meet bank criteria for funding. Reasons include the loan amount is higher than the conforming loan limit (for mortgage loans), lack of sufficient credit, the unorthodox nature of the use of funds, or the collateral backing it.

Question 182

Non-Judicial Foreclosure

Answer 182

This type of foreclosure is processed without court intervention. The requirements concerning the foreclosure process are determined by state law.  In non-judicial foreclosure states, the security instrument allows foreclosure by exercise of the power of sale. 30% of active foreclosure cases are in non-judicial states. Court supervised action is not required to conduct the foreclosure sale. Notices  In certain states, a Notice of Default is required which provides the borrower with a specific timeframe by which the default can be cured to avoid foreclosure  A Notice of Sale is required. The NOS can be posted at the property, at the courthouse, or advertised in the local newspaper

Question 183

Non-QM Loans

Answer 183

these loans do not meet the standards of a qualified mortgage (QM) and use non-traditional methods to get a borrower qualified. Guidelines focus on the “bigger picture” of a customer’s credit and income history but still follow proving the borrower’s ability to repay the loan. NewRez has a Smart Series of Non-QM products that are nationally recognized

Question 184

Non-Traditional Credit

Answer 184

Customers without established credit that have a true zero credit score may still qualify for a mortgage. In some cases, a letter from the customer stating they do not have established credit and the reasoning is required. Non-traditional credit must demonstrate a minimum 12 months positive payment history and the credit sources must require the borrower to make periodic payments on a regular basis, not more than quarterly.

Question 185

Note Rate

Answer 185

Note Rate is the mortgage rate stated on a promissory note. It is also known as the Nominal Rate or Face Interest Rate

Question 186

Obama Mortgage

Answer 186

The Home Affordable Refinance Program (HARP) was an initiative put forward during the Obama administration, that offers a number of options designed to help homeowners, depending on their individual circumstances.

Question 187

Occupancy Affidavit and Name Affidavit

Answer 187

An Occupancy Affidavit is a document signed by borrowers to indicate their intention to occupy the property used as collateral on the mortgage. A Name Affidavit is signed by each borrower, disclosing all known names and aliases the borrower may have used.

Question 188

Occupancy Fraud

Answer 188

With occupancy fraud, the fastest growing type of mortgage fraud, applicants deliberately misrepresent their intended use of the property. For example, a consumer may fraudulently disclose to a lender that they'll live in the house when they really intend to rent it out. This is done because applicants who occupy a house usually qualify for lower interest rates and down payments than those who are buying investment properties.

Question 189

One-Time Close Loan

Answer 189

The FHA One-Time Close Construction-to-Permanent Loan is a secure, government-backed mortgage program available for one-unit stick-built primary residences, new manufactured housing for primary residences (no singlewides), and modular homes.

Question 190

Open credit

Answer 190

Open credit is rarer, and many people won’t ever see it on their credit reports. Open credit refers to accounts that you can borrow from up to a maximum amount (like a credit card) but which must also be paid back in full each month. Open credit is generally associated with charge cards — not to be confused with the credit cards used for revolving credit.

Question 191

Origination Fee

Answer 191

A lot of work goes into processing a mortgage transaction. As the one borrowing money, you will be required to pay an origination fee to cover the costs of putting the mortgage in place.

Question 192

other VA qualifying services

Answer 192

 Public Health Service  Cadets at Service Academies  Certain Merchant Seaman

Question 193

PAR rate

Answer 193

Par yield (or par rate) denotes in finance, the coupon rate for which the price of a bond is equal to its nominal value (or par value ). It is used in the design of fixed interest securities and in constructing interest rate swaps .

Question 194

Patriot Act

Answer 194

A law passed shortly after the September 11, 2001 terrorist attacks in the United States giving law enforcement agencies increased, broad powers to bring terrorists to justice.

Question 195

PIW

Answer 195

Property Inspection Waiver

Question 196

PMI

Answer 196

In the case of conventional loans, you will need to pay for Private Mortgage Insurance. Many lenders require it so that they are protected from huge losses in the event of a borrower defaulting on a mortgage.

Question 197

Points

Answer 197

Are one-time fees collected at the closing to buy the rate down

Question 198

Power of Attorney (POA)

Answer 198

A POA is a legal designation allowing someone to act as another’s attorney-in-fact, or to have the authority, rights, and responsibility to perform certain functions, such as execute documents, administer accounts, and perform other legal functions on behalf of that person. If a borrower wished to use a power of attorney at a mortgage closing, the investors guidelines must be followed.

Question 199

Prepaid Items and what do they include?

Answer 199

``` Prepaid items are amounts that are required by the lender to be paid when a loan closes, in advance of their due dates  Taxes  Accrued interest  Association dues  Mortgage insurance premiums  Hazard insurance premiums ```

Question 200

Prepayment

Answer 200

By making prepayments on a home loan, you are paying off your principal loan earlier than the amortization schedule, and reducing the total amount you pay in interest towards the mortgage.

Question 201

Pricing Concession

Answer 201

Price concession or purchase price concession is an adjustment to the purchase price agreed to in the letter of intent and it is completed before the final closing of the initial transaction.

Question 202

Pricing Concessions

Answer 202

A pricing concession gives NewRez the opportunity to meet or beat the competition when a customer is offered a lower rate and point combination from another lender. There are other reasons an Originator can request a concession, such as, to have a rate extension’s cost covered by NewRez or for a service-related issue. Whatever the reasoning, the request is made through the Pricing Portal in JIRA. The Originator builds the request ticket and can attach supporting documentation to the ticket. Once submitted, the request will automatically travel through the concession approval hierarchy built into the portal until someone with the proper authority approves it. Once approved, the ticket travels to Pricing where the concession is applied and re-disclosures are triggered.

Question 203

primary housing ratio (front ratio)

Answer 203

The front-end debt-to-income ratio (DTI) is a variation of the DTI that calculates how much of a person's gross income is going toward housing costs.

Question 204

Primary Market Lenders include

Answer 204

Mortgage Banker, Mortgage Broker, Banks, Credit unions, Correspondent lenders and wholesalers

Question 205

Primary Mortgage Market Lenders

Answer 205

originated loans directly to borrowers would now be able to have a constant pool of funds by selling the loans to Fannie Mae. In turn Fannie Mae packaged the loans into multimillion-dollar blocks of securities and sold them to investors in the financial markets. This process is called pooling

Question 206

Principal

Answer 206

is the initial size of a loan or a bond Excluding interest, this is the amount you owe in order to pay back the money borrowed from the lender.

Question 207

Principle & Interest (P&I)

Answer 207

as payments are made, some of the money goes towards the principle loan balance and the other portion goes towards the interest due on the loan. In the beginning of a loan term, a larger portion of the payment goes towards interest with the smaller portion going towards the principle. As you continue to pay into the loan term, eventually more and more of the payment goes towards principle and less towards interest. This is because the interest on the loan is to be paid quicker.

Question 208

Principle and Interest

Answer 208

Principle and Interest (P&I) is part of the customer’s monthly mortgage payment. To calculate the P&I, you need to know the desired loan amount, the loan term, and the interest rate the customer is considering. Obtain the rate factor that corresponds to the desired interest rate and term. Use the formula below to calculate the P&I payments.

Question 209

Promissory note or also known as the note

Answer 209

A promissory note, sometimes referred to as a note payable, is a legal instrument, in which one party promises in writing to pay a determinate sum of money to the other, either at a fixed or determinable future time or on demand of the payee, under specific terms the note creates the debt and outlines the obligation to repay the debt. The promissory note is a written, signed, unconditional promise to pay a certain amount of money on demand at a specified time.

Question 210

Property tax

Answer 210

Property taxes are paid to the governing body of the area your house is located in. The amount you pay depends on the area and the type of property.

Question 211

Property title

Answer 211

states you are the owner of the home you purchased. The title company issues the document as evidence that you bought the property legally, and no one else has claims to it.

Question 212

PUD

Answer 212

A planned unit development (PUD) is a type of building development and also a regulatory process. As a building development, it is a designed grouping of both varied and compatible land uses, such as housing, recreation, commercial centers, and industrial parks, all within one contained development or subdivision .

Question 213

PUD

Answer 213

Planned unit Development

Question 214

Purchase Contract

Answer 214

A binding agreement between two or more parties for the purchase, exchange, or other conveyance of real property.

Question 215

Quit Claim Deed

Answer 215

Transfers an owner’s interest to another and terminates the owner’s claim to the property

Question 216

Quitclaim Deed

Answer 216

Used when one homeowner decides to give up legal rights to the other homeowner- usually in the case of divorce or break-up. While the quitclaim deed does relieve legal responsibilities for the property, it does not cancel any mortgage interest the quit claimer has in the property. So, any remaining borrower on the mortgage may still have to pay it.

Question 217

Rate Caps: what are the 3 ARM rate caps

Answer 217

Rate Caps: they determine a maximum percent change for each adjustment. Each ARM has three rate caps:  Initial: the highest % added to the start rate (at initial adjustment after the fixed period)  Periodic: the highest % above the current rate at a set interval of time (every six months or annual)  Lifetime: the highest % above the start rate for the life of the loan

Question 218

Rate Factor

Answer 218

The rate factor is determined by the interest rate and term of the loan. A rate factor chart is available online, however, you will never need to calculate P&I manually. The purpose of discussing it is to help you understand how principal and interest gets calculated into a monthly payment……through a rate factor.

Question 219

Rate Lock Cancellation

Answer 219

If a rate lock is cancelled, the customer is subject to worst case scenario pricing for 30 days (the lower of current lock plus re-lock fees and current market rate). Once a customer is 30 days from a lock cancellation, they have a clean slate and are subject to current market conditions with no additional fees. The customer cannot benefit from cancelling a lock unless the current market rate after 30 days has improved from the original lock.

Question 220

RATE OPTIONS

Answer 220

There are typically 2 rate options: Lock and Float

Question 221

Rate/Term Refinance

Answer 221

A rate-and-term refinance alters an existing mortgage's interest rate or without advancing new money.

Question 222

RD Loan

Answer 222

The United States Department of Agriculture or known as USDA Rural Development (RD) Loan This mortgage type reduces costs for home buyers in rural and suburban areas. USDA loans are zero-down-payment mortgages and are issued through the USDA Rural Development Guaranteed Housing Loan Program, by the United States Department of Agriculture. These loans must be sent to RD for loan guarantee prior to closing. It also important to note that total household income will be analyzed as part of the approval.

Question 223

Representative Credit Score

Answer 223

a statistical rating that assesses the likely future performance on a loan or other credit obligation. Scores tell us how likely borrowers are to pay debts as agreed and use credit wisely. A minimum of two credit bureau scores must be obtained to determine the representative credit score for each borrower

Question 224

Residential Mortgage Credit Report (RMCR or Full Factual)

Answer 224

The contents of the report are computer generated and are verbally verified by the borrower as well as each individual creditor

Question 225

Residual Income pertain to VA

Answer 225

``` VA requires that veterans have a minimum amount of money left-over each month, depending on the loan amount and family size, after the following items are deducted from the gross monthly income:  Monthly mortgage payment  Installment loans  Revolving debt  Child Care/Support/Alimony  Estimated utility costs ```

Question 226

RESPA Reg X RespecX your borrower

Answer 226

Real Estate Settlement Procedures Act has two main purposes: (1) to mandate certain disclosures in connection with the real estate settlement process so home purchasers can make informed decisions regarding their real estate transactions; and (2) to prohibit certain unlawful practices by real estate settlement providers, such as kickbacks and referral fees, that can drive up settlement costs for home buyers.

Question 227

Reverse Mortgage

Answer 227

A reverse mortgage's loan balance increases over time, because payments are not made until the borrower moves or dies. This is a popular option for seniors, if they are looking to supplement their income.

Question 228

Reverse Mortgages

Answer 228

enables homeowners, who are 62 or older, to convert part of the equity of their home into tax free income without having to sell the home or make payments to the lender as they would with a traditional mortgage. The equity can be taken as a lump sum or paid monthly to the customer by the lender. The loan is repaid when the customer no longer occupies the property (home is sold or customer is deceased).

Question 229

Revolving Credit

Answer 229

This form of credit allows you to borrow money up to a certain amount. The lending institution sets a credit limit, or the most you can borrow. In revolving credit, the borrower revolves the balance by rolling from month to month until it is paid in full. Interest charges typically occur for any revolving balance. As the money is paid back, the difference between the maximum credit limit and the current balance is available to be borrowed. This is the most common form of credit issued by credit cards, such as Visa, MasterCard, and store and gas cards. Credit cards are considered unsecure credit because there is no collateral securing the amount borrowed.

Question 230

Right of Rescission

Answer 230

A period of 3 full business days after closing on their primary residence in which customers can cancel a refinance transaction. The rescission period begins the day after closing and expires at midnight the third day. Saturday is considered a business day, but Sundays and Federal Holidays are not. Loan proceeds are distributed only after the rescission expires.

Question 231

Schedule C

Answer 231

Schedule C is used to report self-employment business income. This is income that you go out and actually "do" something to earn it. This income is reported on SCH C and in addition to the regular income tax, is also subject to the additional self-employment tax, if that SCH C income is more than $399 for the tax year. The Self-Employment tax is basically the employer's side of your social security and Medicare. It gets credited to the Social Security account of the business owner listed on the SCH C, and nobody else.

Question 232

Schedule E

Answer 232

Schedule E is used to report "passive" income. This income is either rental income you receive because you own rental property, or a royalty payment you receive. Passive income is not subject to the additional self-employment tax, and that's why it's reported on SCH E. Passive income is income that you receive, but don't actually work for and "earn".

Question 233

Second Mortgage

Answer 233

Second mortgages are loans taken out on property that is already being used as collateral for a home loan. These loans can be in the form of a home equity loan, or home equity line of credit.

Question 234

Secondary Marketing

Answer 234

Secondary Marketing develops new products and maintains current products. They also set rates and sell loans to investors

Question 235

Secondary Mortgage Market

Answer 235

where mortgage loans originated by primary lenders were sold as securities to financial investors. The introduction of Fannie Mae helped mortgage originations become more structured, efficient and fair nationwide.

Question 236

Seller Concession/Assist

Answer 236

sometimes also referred to as a “seller assist” - is a gift that the sellers give buyers in order to reduce the upfront cost of buying a home.

Question 237

Servicing Disclosure Statement

Answer 237

The consumer is notified that the lender may transfer the servicing of their mortgage to another lender or party. The consumer’s rights under the Real Estate Settlement Procedures Act are also provided.

Question 238

Servicing/Loan Administration

Answer 238

Essentially, loan administration consists of the administrative tasks necessary to manage closed loans.

Question 239

Shipping/Delivery

Answer 239

The preparation, packaging and delivery of loan documents to an investor according to the terms of the commitment. Investor commitments require loan delivery by a specified date and according to stated investor requirements.

Question 240

Single Family Home

Answer 240

A single family home is classified as an individual, unattached dwelling structure. For the purposes of an FHA loan, it is an owner occupied home, which means that the borrower must intend to use the home as their primary residence.

Question 241

SLA

Answer 241

Service Level Agreement is a contract between a service provider and its customers that documents what services the provider will furnish and defines the service standards the provider is obligated to meet.

Question 242

SMS

Answer 242

Shellpoint Mortgage Service

Question 243

SOFR

Answer 243

The Secured Overnight Financing Rate (SOFR) is a broad measure of the cost of borrowing cash overnight collateralized by Treasury securities

Question 244

Sole Ownership

Answer 244

Property is owned entirely by one person. Words in the deed such as "John, a single man", establishes title as sole ownership.

Question 245

Sources of Funds for Down Payment and Closing Costs

Answer 245

 Bank accounts: checking, savings, money markets o Large deposits: borrowers may need to provide an explanation and documentation proving the funds are from an acceptable source  Earnest Money Deposit (EMD): money given to the selling agent or title company during the signing of the contract as a sign of good faith; gets credited towards cash needed at closing and must be verified  Gifts: from an acceptable donor; depending on the product, may have to verify donor ability, transfer of funds, and receipt of funds  Certificate of Deposit (CD)  Stocks, Bonds, Mutual Funds: only 70% of the face value of the asset is used for qualification for some products  IRA/401K/Keoghs/Retirement: funds that have penalties for early withdrawal plus taxes must be considered conservatively and are thus evaluated at 60% of their net vested value for some products  Net Proceeds: from the sale of an existing home, net proceeds are an acceptable source for down payment/closing costs. A conservative calculation for net proceeds is to take 10% of the sales price and subtract outstanding liens

Question 246

Special Warranty Deed

Answer 246

Warranty limited only to claims which occurred after the grantor obtained the real estate (more common for commercial property sales and transfers)

Question 247

Straw Buyer Fraud

Answer 247

This form of mortgage fraud occurs when a bogus buyer (real estate professionals call them "straw buyers") allows a would-be homebuyer to assume another person's identity to get an approval on a mortgage loan. The straw buyer typically has better credit than the homebuyer, likely has higher income and lower debt, and stands a much stronger chance of getting approved for a home loan than the intended homeowner. After the home is sold, the deed to the property may be shifted over to the intended owner. The fake buyer may have had his or her identity stolen and may not know that his or her name, credit, and financial data are being used to perpetuate mortgage fraud.

Question 248

Streamline Refinance

Answer 248

is an option for homeowners looking to lower the interest rate and monthly payments on their existing FHA mortgage. This lets borrowers refinance with a process that is streamlined to cut down on the time and effort spent.

Question 249

Subordinate Financing

Answer 249

Subordinate financing is any loan secured by the subject property other than the first mortgage. Also known as Secondary Financing or Junior Liens. The debt from the subordinate financing will be included in the debt ratios. There are basically two types of second mortgages:  True Second Mortgages (aka Fixed Rate Second)  Equity Lines (aka Home Equity Line of Credit or HELOC)

Question 250

Subordination Agreement

Answer 250

Written contract in which a lender who has secured a loan by a mortgage or deed of trust agrees with the property owner to subordinate the first lien position to a new loan (thus giving the new loan priority in any foreclosure or payoff). The agreement must be acknowledged by a notary so it can be recorded in the official county records.

Question 251

Subprime Mortgage

Answer 251

subprime mortgages to borrowers with low credit scores who don't usually qualify for most other home loans. These loans tend to have very high interest rates to protect lenders in the event that the borrower defaults.

Question 252

T-Bill

Answer 252

A Treasury Bill (T-Bill) is a short-term U.S. government debt obligation backed by the Treasury Department with a maturity of one year or less

Question 253

Tax lien

Answer 253

A tax lien is a legal claim against the assets of an individual or business who fails to pay taxes owed to the government. In general, a lien serves to guarantee payment of a debt such as a loan or, in this case, taxes. If the obligation is not satisfied, the creditor may proceed to seize the assets.

Question 254

Taxes and Insurance

Answer 254

Property taxes and hazard insurance are included with the P&I in a customer’s total monthly mortgage payment. Taxes are monthly real estate property taxes for which the customer is responsible. Insurance refers to the monthly hazard (homeowners) insurance (HOI) and/or flood insurance, homeowner’s association dues (HOA), and private mortgage insurance (PMI), when applicable. HOA does are included for qualification but are not included in the borrower’s actual payment. Property taxes, HOI, and HOA dues will vary based on the subject property.

Question 255

Temporary Buydowns

Answer 255

for a cost at closing, the interest rate is reduced during the initial specified number of years gradually increasing each year until the rate becomes fixed at the note rate.

Question 256

Tenancy by Entirety

Answer 256

Some states have a special form of joint tenancy where the joint tenants are husband and wife, with each owning one-half interest. Neither spouse can sell the property without the consent of the other. Words in the deed such as "John and Mary, husband and wife as tenancy by entirety", establishes title in tenancy by entireties.

Question 257

Tenancy in Common

Answer 257

Property is owned by two or more persons at the same time. The proportionate interests and right to possess and enjoy the property between the tenants in common need not be equal. Upon death, the decedent’s interest passes to his/her heirs named in the will, who then become new tenants in common with the surviving tenants in common. None of the tenants in common automatically receive the share of the decedent. There is no right of survivorship as with joint tenants. The words in the deed such as "Peter, Paul, John and Mary as tenants in common", establishes tenancy in common.

Question 258

The components of the ATR and QM Rules are

Answer 258

 Consideration and verification of the borrower’s credit history  All the borrower’s consumer and long-term debt  All mandatory expenses associated with owning the home  All mortgage loan payments

Question 259

The components of the ATR and QM Rules are:

Answer 259

Consideration and verification of the borrower’s credit history All the borrower’s consumer and long-term debt All mandatory expenses associated with owning the home All mortgage loan payments

Question 260

The Gramm-Leach-Bliley Act (GLBA) Also Known as Reg P - Privacy

Answer 260

was designed to ensure that financial institutions, including mortgage brokers and lenders, protect nonpublic personal information of consumers by protecting personal information from unauthorized release and disclosure, offering consumers the opportunity to limit the exchange of their personal information, and advising consumers of the company’s policy in regards to the use and sharing of personal information.

Question 261

The Mortgage or Deed of Trust

Answer 261

Depending on state requirements, either a Mortgage or a Deed of Trust document will be signed at closing. Also known as security instruments, these documents secure the promissory Note, which is also signed at closing. These documents contain important clauses specifying the rights and obligations of each party.

Question 262

Third Party Providers

Answer 262

Third Party Service Providers form discloses to the consumer any third parties that will provide service to them. A PMI company is an example of a third-party service provider. The name of the party that provides credit reports is another example. If a consumer is declined for a loan, he or she may contact the credit reporting bureau to request a copy of their credit report at no charge.

Question 263

TIL

Answer 263

Truth in lending

Question 264

TILA The Truth-in-Lending statement provides

Answer 264

ARP, Finance charges, Amount Financed, total payments, CHARM

Question 265

TILA Also Known as Reg Z Tila the Zila

Answer 265

designed to promote the informed use of consumer credit, by requiring disclosures about its terms and cost to standardize the manner in which costs associated with borrowing are calculated and disclosed.

Question 266

TILA/RESPA Integrated Disclosure Rule (TRID)

Answer 266

Seeks to simplify standard loan documentation, limit fees charged to consumers, make documentation easier to understand, aid consumers in comparison shopping, and prevent surprises at the closing table. TRID also clarifies timing requirements for disclosures of final loan terms and costs.

Question 267

Title

Answer 267

The legal right of ownership to the property

Question 268

Title commitment

Answer 268

The instrument provided by the title agency as the “binding” instrument to essentially offer to a title insurance policy

Question 269

Title Commitment

Answer 269

A title commitment is the document by which a title insurer discloses to all parties connected with a particular real estate transaction all the liens, defects, and burdens and obligations that affect the subject property

Question 270

Title insurance

Answer 270

Insurances that protects against the loss to the title of the property

Question 271

Title insurance policy

Answer 271

Offers coverage to the bank or lender that is financing the property. It insures against financial loss from defects in title to real property and from inaccuracy or unenforceability of mortgage loans.

Question 272

Title Insurances exceptions

Answer 272

1) Rights of parties in possession (this exception would include, for example, the rights of a tenant with an unexpired lease term) 2) Encroachments, boundary issues, and other matters that an accurate survey would disclose 3) Any easements not shown on public records. Common easements are to:  Enable sewer or other utility lines to be installed  Allow access to a property Some examples of easements are:  Easement by necessity  Light and Air easement  Utility easement  Conservation easement  Preservation easement 4) Construction and worker’s compensation liens.

Question 273

Title Theory

Answer 273

Lender holds legal title until mortgage debt is paid in full

Question 274

Total Housing Payment - PITI

Answer 274

1. PRINCIPLE 2. INTEREST 3. TAXES 4. INSURANCE a. HOI (Hazard/Homeowner’s Insurance) b. Flood Insurance c. PMI (any kind of mortgage insurance)

Question 275

total obligation ratio (back ratio)

Answer 275

The back-end ratio is calculated by adding together all of a borrower's monthly debt payments and dividing the sum by the borrower's monthly income

Question 276

True Second Mortgage

Answer 276

A true second mortgage sometimes referred to as a fixed rate second or closed end second mortgage and has four different characteristics:  Fixed initial loan amount, declining principal balance  Fixed term  Fixed interest rate  Fixed amortizing payments over life of loan

Question 277

Types of Credit Reports

Answer 277

Merged In-file, Residential Mortgage Credit Report (RMCR or Full Factual)

Question 278

Types of Property Ownership

Answer 278

The two types of property ownership are Fee Simple and Leasehold

Question 279

UCS

Answer 279

Universal Credit Services

Question 280

Underwriting

Answer 280

The evaluation of documents to determine if the loan should be approved or declined or suspended if needed more information. Underwriting analyzes the lender’s risk in making the loan.

Question 281

Uniform Residential Loan Application (URLA/1003)

Answer 281

A form that lenders use to record information about a borrower for the purpose of granting a mortgage loan.

Question 282

Upfront Mortgage Insurance Premium (UFMIP)

Answer 282

A mortgage insurance fee paid once and typically financed into the loan amount for all FHA loans (Default Insurance).

Question 283

URAR

Answer 283

Uniform Residential Appraisal Report (URAR)

Question 284

URLA or 1003 Form

Answer 284

Uniform Residential Loan Application , is a standard form that contains all the information necessary for a lender to establish the risk profile of a borrower. All requests for residential mortgage loans are processed using this application, whether the loans are for home purchases, refinancing, or residential home construction.

Question 285

USDA RD

Answer 285

The United States Department of Agriculture (USDA) sets lending guidelines for the program, which is why it is also called the USDA Rural Development (RD) Loan. This mortgage type reduces costs for home buyers in rural and suburban areas These loans must be sent to RD for loan guarantee prior to closing. It also important to note that total household income will be analyzed as part of the approval.

Question 286

UW

Answer 286

Underwritter

Question 287

VA Entitlement

Answer 287

VA entitlement is a specific dollar amount. Veterans and service members using the VA loan benefit for the first time have their full VA loan entitlement available, which allows qualified buyers in most of the country to borrow up to $453,100 before having to make a down payment is no maximum amount on a VA loan. You can get as much as the lender is willing to give you without the need for a down payment, provided you qualify and have your full VA loan entitlement. Some of the country's most expensive areas have loan limits that exceed the conforming loan limit. Think parts of California, New York, Virginia, Hawaii and a handful of other states.

Question 288

VA Mortgages

Answer 288

VA Mortgages are available to veterans of the United States Armed Forces and guaranteed by the Veterans Administration. This type of loan offers a lower down payment requirement than most standard mortgages and comparable interest rates allows eligible veterans to obtain low interest and high LTV loans to buy a home. Spouses of veterans are also able to acquire VA Mortgages even if the veteran is deceased. The VA offers a guaranty on VA financed loans. The guarantee that the government offers with VA loans is a promise to repay lenders a portion of a loan balance if a veteran’s loan goes into foreclosure. Because these loans are guaranteed by the government, these loans do not require mortgage insurance. Generally, all Veterans using the VA Home Loan Guaranty benefit must pay a Funding Fee. This reduces the loan’s cost to taxpayers considering there is no down payment required and no monthly mortgage insurance.

Question 289

VOE

Answer 289

Verification of employment

Question 290

VOI

Answer 290

Verification of income

Question 291

Voluntary Conveyance

Answer 291

Transfer or conveyance is voluntary when one party voluntarily sells or transfers title to another. Some common voluntary conveyances are:  Bequest by will and testament: Property is transferred to a designated recipient through a legally valid will.  Gift: The owner of a property voluntarily bestows a property to another without compensation.  Negotiated transaction: the owner of a property conveys title through a sale or a deed-in-lieu of foreclosure

Question 292

VOM

Answer 292

Verification of Mortgage

Question 293

VVOE

Answer 293

Verbal Verification of Employment

Question 294

Warehousing

Answer 294

The financing of loans from closing until sale to an investor. The money to finance the loan is in most cases borrowed through a short-term, revolving line of credit established with one or more commercial banks.

Question 295

Warranty Deed

Answer 295

Used when a homeowner owns the home free and clear, meaning there are no other liens or claims on the property.

Question 296

What are the advantages of a mortgage escrow service for lenders?

Answer 296

The lender is assured that insurance premiums will always be up to date, so its asset (the home) is protected in the event of destruction. Depending on the state, lenders can earn interest on the escrow funds held by the servicer. Escrow accounts can contribute to the lender’s revenue.

Question 297

what are the terms of the note?

Answer 297

``` The terms of the promissory note include the following:  Loan amount and term  Interest rate and APR  Payment amount and due date  Prepayment Penalty (if applicable)  Late payment fees  Make payment to ```

Question 298

What dose ARP generally include?

Answer 298

```  Points  Loan Processing Fees  Underwriting Fees  Document Prep Fees  PMI  Appraisal Fee  Credit Report Fees  Loan Application Fees  Origination Fees  Commitment Fees ```

Question 299

What dose title insurance not protect against?

Answer 299

 Eminent domain  Police powers, includes zoning issues, use of property regulations, and setback requirements & building height restrictions not recorded in the public records.  Title defects the lender was aware of but did not disclose.  Bankruptcy proceedings

Question 300

What is in a Closing Documents?

Answer 300

Deed, General Warranty, Special Warranty Deed, Quit claim Deed, Hazard insurance policy, Closing Disclosure, Living Trusts, The Mortgage or Deed of trust, Occupancy Affidavit and Name Affidavit, POA, Mortgage Survey.

Question 301

what is included in the prepaid items *hint 5

Answer 301

```  Taxes  Accrued interest  Association dues  Mortgage insurance premiums  Hazard insurance premiums ```

Question 302

What is the difference between Freddie mac and Fannie mae?

Answer 302

FNMA and FHLMC loans are indeed very similar. They both have agreed to identical pricing. The differences lie within each investor’s assessment of risk. Both investors have their own Automated Underwriting System (AUS) for reading application data, analysis of credit reports, risk determination, and preliminary loan decision. Though both investors have similar basic guidelines like Max LTV(loan to value), Max Loan Amount, etc. there are some differences in guidelines and the way they both assess risk. There are areas where each are more lenient or strict with approval conditions.

Question 303

what is the purpose of title insurance

Answer 303

``` The purpose of title insurance is to eliminate risk and prevent losses from defects on title such as:  Forgery  Fraud  Title transfer without the consent of undisclosed or missing heirs or spouses  Confusion due to similar names  Defective deeds  Errors in records or clerical work  Invalid court proceedings  Mistaken legal interpretations ```

Question 304

What kind of types of real estate transfer?

Answer 304

Voluntary Conveyance, Involuntary Conveyance

Question 305

When determining the borrower’s ability to repay, eight factors must be considered when reviewing the application:

Answer 305

 Income and Assets  Employment Status  Monthly Mortgage payment  Monthly payment on simultaneous loan (second liens) like home equity loan or home equity line of credit-HELOC’s   Property Taxes, Homeowner’s Insurance, and other costs, including Homeowner’s Association Dues  All debts including alimony and child support  Monthly debt to income ratios  Credit history

Question 306

When is Escrow Established?

Answer 306

1. At loan origination 2. At the customer’s request or required by the investor guidelines 3. Forced when a customer fails to pay the required taxes on a non-escrowed account 4. With the initiation of a Modification Trial Period for a non-escrowed Account

Question 307

when is the LE sent out?

Answer 307

Within 3 days of the application

Question 308

When will an escrow analysis be sent out?

Answer 308

 Annual Analysis - RESPA requires mortgage servicers complete an annual analysis for all escrowed accounts, and a statement of activity must be sent to the borrower. The statement will include the history for the previous year and projected escrow payments and disbursements for the coming year.  On Demand Analysis - An analysis performed to determine if any action should be taken due to a shortage or surplus in the escrow account or to comply with a borrower’s request.  Escrow Research - An analysis is completed to ensure planned disbursements will not result in a deficiency.  Final Analysis - A final analysis is performed approximately 25 days after a payoff is received to close out the escrow account and to return surplus funds to the borrower. If a disbursement is pending on a paid-in-full loan with an escrow balance, the analysis can be processed 1-15 days after the closed date.

Question 309

Wholesaler

Answer 309

 Underwrite and close loans for brokers  Provide funds for loans  Build servicing portfolio to earn servicing fees  Sell servicing rights for profit

Question 310

WVOE

Answer 310

Written Verification of Employment

Question 311

WVOE

Answer 311

Written Verification of Employment

Question 312

FTC

Answer 312

Federal Trade Commission

Question 313

FCC

Answer 313

Federal Communication Commission

Question 314

MLC

Answer 314

Mortgage Loan Consult or LO

Question 315

Audit Gates

Answer 315

Gate #1, Gate #2

Question 316

Gate #1

Answer 316

Pre-Opening Audit – when the MLC is ready topass the loan into Underwriting, they must first pass this audit, completed by a 3rd party vendor, to ensure a complete loan

Question 317

Gate #2

Answer 317

Pre-Closing Audit – when the Processor feels ready to pass the loan to Closing, they must first pass this audit, completed by a 3rd party vendor, to ensure the loan is ready to close; audit scores may impact their compensation

Question 318

PreQual Status

Answer 318

completed at least the minimum amount of | information needed to pull credit min name or names, income, SSN, Address, estimated value of property and Loan Amount

Question 319

Initial Status

Answer 319

LO starts application in salesforce FLOW no Loan number

Question 320

Disclose Status

Answer 320

this status means you have a complete application | but have yet to send the Initial Disclosures (6 pieces via TRID) for 3 days then LE needs to be sent

Question 321

Opened/ Pending Status

Answer 321

Once the MLC sends Initial Disclosures while working in FLOW, the status automatically changes to Opened/Pending Once Initial Disclosures are sent, an Initial Disclosure Date MLC should immediately sign the 1003

Question 322

ITP

Answer 322

Intent to Proceed

Question 323

Processing Status

Answer 323

Once the status is changed to Processing, Production Support is assigned to the file and the vendor is notified for preunderwriting audit

Question 324

UW Received Status

Answer 324

If the audit passes and the LTV < 75%, we have a PIW, or the loan is VA, the status is changed to UW Received and the loan goes into Underwriting

Question 325

Processing Hold_Pending Status

Answer 325

If audit passes and the LTV > 75%, the status is changed to Processing Hold_Pending while we await the appraisal when the appraisal comes in, the file goes into UW Received status

Question 326

Processing Hold_Ssupport

Answer 326

If the Vendor Audit Fails due to tasks the MLC missed, the status is changed to Processing Hold_Ssupprt and the loan kicked back to the MLC for corrections

Question 327

PIW

Answer 327

Property inspection wavier

Question 328

Approved Status

Answer 328

Once the loan is Approved by UW, the Processor is assigned the Processor sends an Intro Email and has 24 hours to complete the Approval Call Processor then completes tasks for Initial CD (ICD) Requirements Once the ICD is sent, the Processor works on getting the final sips cleared by UW

Question 329

Approval Call entails

Answer 329

Review the CLA (Conditional Loan Approval)  Communicate/Request conditions/stipulations from all parties  Gather remaining stipulations  Title Review  Order Payoffs/VOMs  HOA Docs  VVOEs  Processor calls Borrower to complete a review of the CLA and to communicate conditions needed  Processor sets proper expectations for final conditions, CD prep and delivery, and closing

Question 330

Initial CD (ICD)

Answer 330

```  Approved and Locked  Escrow Setup & HOI  Payoffs Ordered  Compliance Ease  Have MLC confirm cash to close figure (CCWS or screenshot) ```

Question 331

the final sips cleared by UW entails

Answer 331

```  Clear Drive conditions  Clear ATS conditions  Update VOE  Update PO  Update FHA case query  Verify cash to close  Verify DU/LP  CLA to sales ```

Question 332

Clear to Close (CTC) Status

Answer 332

Once in UW Clear status, the Processor simply must complete any remaining pre-closing conditions and change the status to CTC which then triggers the following: Vendor performs the Pre-Closing Audit

Question 333

Docs Requested Status

Answer 333

Once the loan passes the final audit, completed by vendor, the Processor schedules closing with the Closing Agent and submits the loan to the Closing Department by changing the status to Docs Requested.

Question 334

Docs Drawn

Answer 334

Works with the Title/Closing/Escrow Agent for Closing Disclosure approval through the Collaboration Portal in DocuTech and changes the status to Docs Drawn When ready, sends out the Closing Package and changes the status o Docs Out

Question 335

Funding Status

Answer 335

The Wiring Department will change the status to Funded once the wire has been processed and sent out

Question 336

FHA streamline loan

Answer 336

no appraisal no income documents no employee verification