Use LEFT and RIGHT arrow keys to navigate between flashcards;
Use UP and DOWN arrow keys to flip the card;
H to show hint;
A reads text to speech;
68 Cards in this Set
- Front
- Back
|
The Uniform Residential Loan Application (URLA ) (FORM 1003) |
The standard form that applicants must complete when applying for a mortgage |
|
|
URLA consists of two components |
Borrowe info Lender loan info |
|
|
The purpose of the application interview is to |
Obtain info to complete the loan application |
|
|
Title 18 Section 1001 (Federal False Statements Act) |
Any intentional or negligent misrepresentations of info may result in the imposition of civil liability on me and or criminal penalties. A violation may lead to a 5 year jail term. |
|
|
FBI Mortgage Fraud Warning Notice |
Mortgage fraud is investigated by the FBI and is punishable by up to 30 years in federal prison or 1 million dollars or both. The use of this statement is not mandatory and is completely voluntary |
|
|
Contract for Deed ( Land Contract) |
the homebuyer takes possession of the real estate and make monthly payments to the seller, who holds the title until the borrower has completed payment at the purchase price. |
|
|
Advantages of a land contract |
provides a financing option for consumers who are not eligible for mortgage finances It does not include closing costs The time to complete a transaction is minimal, since it does not require underwriting. |
|
|
Disadvantages of Land Contracts |
sellers can demand full payment if borrower falls behind seller can use the house for a lien |
|
|
Renovation loans |
these are for fixer upper homes or when they want to complete improvements. This is good for owners who dont have equity in their home. |
|
|
Energy improvement |
homeowners can secure funds to make their home more energy efficient with solar panels or better appliances. |
|
|
Indian Country Land Tenure |
A reservation established by the federal govt A dependent Indian community that is set aside by federal govt Allotments that the fed gov made through a land distribution system that existed btw 1887-1934 |
|
|
If information is missing on the URLA, the loan originator should make an effort to notify the applicant immediately and give reasonable time to furnish documents. Applicants must be made aware of the status of their application within |
30 days of the application date. |
|
|
If you are using bonuses or overtime as income, the applicant has to show that it has occurred for |
at least two years and the employer have to verify that the overtime or bonus is likely to continue. |
|
|
ATR and QM Rule current/reasonable expected income or assets verification can be |
Tax return, W2, payroll statements, financial institution statements, employer records, records from the govt stating benefits, receipts from a check cashing service or funds transfer service. |
|
|
Income that is not salary based will require for income verification |
-tax returns for past two years -year to date profit and loss statement -Balance sheets for past two years -Self employed income analysis. |
|
|
Pre-Closing Disclosures |
Loan Estimate Closing Disclosure Affiliated Business Arrangement Disclosure Re-disclosure of APR |
|
|
Informational Disclosures |
Your home Loan Toolkit CHARM Consumer Handbook on ARM When your home is on the line: What you should know about you HELOC |
|
|
Post closing disclosures |
Initial Escrow Account Statement (due 45 days after closing) Annual Escrow Account Statement Initial Rate Change Disclosure |
|
|
IRS FORM 8821 |
is used to authorize the release of tax information for verification |
|
|
IRS Form 4506 C |
is used to obtain a transcript of tax returns |
|
|
Lenders will ask loan applicants with gift funds to provide a letter that includes |
a description of the relationship btw applicant and donor statement gift funds must be used for a home purchase the address of the home that applicant will purchase Assurance that the donor does not except repayment of the funds Signature of the donor |
|
|
Gift funds are prohibited from |
builders, real estate agents, any party with an interest in the transaction. |
|
|
Bi weekly salary annual calculation |
bi weekly salary X 26 annual income/12=monthly income |
|
|
Semi Monthly (Bi-monthly) |
two payments a month semi monthly X24=annual (semi=4, think 24) annual/12= monthly |
|
|
Self Employment income calculating |
year 1 + year 2= income base income base/24= monthly income |
|
|
ultimate responsibility for ensuring that the applicant is provided with the required disclosure falls to the |
lender. It dont HAVE to be provided by the lender. It can be provided by the mortgage broker, but its the lender responsibility. |
|
|
Not acceptable as a down payment for loan |
an unsecured loan down payment assistance from the seller credit card advances payday loans |
|
|
Documents needed to be mailed to the borrower within 3 days of the loan application |
Loan Estimate Mortgage Servicing Disclosure Your Home Loan Toolkit |
|
|
Acceptable FHA down payment sources |
Gifts from relatives, employer/labor union, charitable organization, govt agency, only family members may provide equity credit investments/savings (60% of the assets in retirement) |
|
|
If a consumer pays more at consummation than what was disclosed in the Loan Estimate and the amounts exceed the tolerances allowed by law, the creditor must |
refund the excess within 60 calendar days of consummation. |
|
|
What is the tolerance in an escrow account |
there is no tolerance. A creditor may charge more than it discloses in the loan estimate as long as the original estimate was based on the best available info at the time. Prepaid interest and property insurance premiums don't have a tolerance limitation. |
|
|
Where would a borrower look to determine if there is a prepayment penalty |
the loan estimate |
|
|
Front End Ratio/ Housing Ratio |
allows lender to compare monthly housing expenses that a loan applicant assumes with a new mortgage. This may include insurance, homeowners dues, condo assessments, taxes. (PITI) Monthly housing expense/gross monthly income |
|
|
Front End max for loans |
F&F loans are 28% FHA 31 % VA loans typically look at the back end |
|
|
Back End Ratio (Total Debt Ratio) |
compares total monthly obligations to gross monthly income. Total monthly obligations/gross monthly income |
|
|
Back End Ratio max for loans |
Conventional 36% FHA 43% (QM) VA 41% Non conforming 55% |
|
|
Loan to Value Ratio is used to |
see which type of loan the applicant can qualify for. LTV= Amount of Mortgage/Appraised mortgage or purchase price (whichever is less) |
|
|
Mortgage Amount |
Purchase Price-Down Payment=mortgage amount |
|
|
If the appraisal is less than the purchase price, the borrower will have to |
increase his of her down payment or obtain mortgage insurance. |
|
|
LTV for loans |
FHA 96.5 % VA 100% |
|
|
Combined Loan to Value Ratio |
(first mortgage + second mortgage)/appraised value of home |
|
|
High Loan to value ratio |
studies show that these people are more likely to default |
|
|
ATR applies to |
Open end loans Reverse Mortgages Bridge Loans with terms 12 or less Construction loans Loans made by housing agency |
|
|
Tangible net benefit |
the benefit that a consumer will attain as a result of a transaction. |
|
|
Loan flipping |
repeated refinancing of a loan over a short period of time without benefit to the borrower. |
|
|
Uniform Residential Appraisal Report (URAR) 1004 |
the most common and comprehensive appraisal form |
|
|
A property inspection waiver |
is occassionally permitted instead of a full appraisal for certain circumstances. |
|
|
3 Approaches to appraisals |
Sales comparison/market approach ( recent sales that are comparable to the subject property within the past 12 months) Income approach (for investment properties) Cost Approach-commonly used to appraise new home construction. Think SIC |
|
|
If a loan servicer transfers to another servicer, they must notify the borrower |
At least 15 days before the effective days and the borrower cannot get penalized if they make a payment to old servicer for 60 days. |
|
|
If closing documents cannot be electronically recorded then |
eClosing using RON is impossible. A hybrid would be used instead. If esigning not available, it would have to be papered out |
|
|
Two types of electronic notatization |
In person electronic notarization (IPEN) Remote online notarization (RON) |
|
|
Proof of investment income is verified by |
The borrower showing a history of receiving the income and document that the income will continue |
|
|
Self employed borrower will most likely use this form when filing taxes as Cole proprietor |
Schedule C C for company |
|
|
Which appraisal approach would be used for investment property |
Income approach |
|
|
Flood insurance is required on the mortgage property until |
The loan is repaid in full |
|
|
Factors that determine the minimum hazard insurance |
The loan amount and insurable value |
|
|
Trust deed is a |
Security instrument |
|
|
Promissory note is |
A borrowers promise to pay |
|
|
When closing, how much can put collected for the escrow account |
An amount sufficient to pay the taxes and insurance up to the date of the first mortgage payment will be due, plus two months' worth of the estimated charges for the upcoming 12 months |
|
|
A mortgage or trust deed secures |
payment of a note. It will have a defeasance clause (provides for the release of the lien when the borrower pays off the debt) and a due on sale clause. |
|
|
Reconveyance |
releasing of a lien from the title of a property after the loan has been paid off |
|
|
Whats on the promissory note |
payor and payee rate of interest fixed or adjustable due date terms of the loan (Does not go over legal description) |
|
|
How to find the prepaid interest |
-loan amount X annual %=total annual % -total annual %/365= daily % -Then see how many days you need to calculate until you get to the last day of the month. |
|
|
Rate Floor |
is the lowest the rate can ever be ( to protect the lender) make sure its still profitable for the lender |
|
|
What is Freddie's Mac automated underwriting system called |
Loan Product Advisor. Fannie Mae is Desktop Underwriter |
|
|
According to the standard deed of trust, how soon must a borrower on an owner occupied loan occupy the property? |
60 days after closing. |
|
|
According to the Intergency Guidance on Nontraditional Mortgage Products Risk, relying on an individuals capacity to replay the loan as structured from resources other than monthly income is |
Considered unsafe and unsound. |
|
|
ECOA says loan applicants should get notice of adverse action In |
30 days of loan application |
