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35 Cards in this Set
- Front
- Back
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***In which of the following transactions must the HUD settlement cost information booklet be provided? |
A. Strong compensating factors |
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Mr. Bob earns $12 per houe and works 38 hours each week for his job at a retail store. His wife Matilda is paid $680 bi-weekly as a medical technician. What is their combined monthly qualifying income?
A. $3940.00 B. $3553.33 C. $3449.33 D. 3336.00 |
C. $3449.33
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An agreement a borrower makes with a lender allowing their interest rate to rise or fall with the market is called:
A. A float agreement B. A lock-in agreement C. An adjustable rate contract D. A variable rate discount |
A. A float agreement
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In which of the following instances would a borrow be required to obtain flood insurance?
A. The borrower feels more securing having the additional coverage B. The previous owner has a history of the property flooding C. The appraiser indicate the property is located in a flood zone D. The lender determines it will require flood insurance on all conforming loans |
C. The appraiser indicate the property is located in a flood zone
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Appraisers most commonly use which of the following appraisal methods when determnng value for conforming loans?
A. Income approach B. Assemblage C. Cost approach D. Sales comparison approach |
D. Sales comparison approach
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According to conforming guidelines, an appraiser may make net adjustments to comparable up to ____ in a residential appraisal.
A. 15% B. 25% C. 10% D. 20% |
A. 15%
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A borrower asks you for a definition of "a point." What would you tell him/her?
A. It is an incentive earned by loan originators for locking a certain interest rate B. It is the mathematical conversion of a finance charge to APR C. It is 1% of the loan amount D. It is the incremental measurement used for ARM adjustments. |
C. It is 1% of the loan amount
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James Smith has worked for Perfect Transmission Installers for eight years. His annual base salary is $52,000. For overtime hours, which he has averaged as six hours per week, he received double pay based on his per hour wag eof $25. James takes four week paid vacation per year. What is his monthly qualifying income?
A. $5650.00 B. $5333.33 C. $5300.00 D. $5353.33 |
B. $5333.33
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Comparable properties used in the market approach to appraisal should be located within ___ of the subject property?
a. The same zip code B. The same county, city , or township C. Five mile D. One mile |
D. One mile
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Which od the following provision is available to a borrower when the subject property is located in a flood zone and flood insurance is required?
A. State Flood Insurance Agency B. FEMA's National Flood Insurance Program C. FEMA's National Flood Insurance Provision D. FEMA's Nationwide Flood Initiative Program |
B. FEMA's National Flood Insurance Program
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A couple qualifies for a $245,600 loan. They are told that the broker fee will cost 2 points. What ist hedollar amount of the broker fee?
A. $4912 B. $49,120 C. $491.20 D. $49.12 |
A. $4912
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Why would a borrower pay a discount point in conjunction with his/her loan transaction?
A. They would be used to paying closing costs B. They would compensate the mortgage broker for their services C. They would increase monthly payments but decrease the amount of intereest owed D. They would lower their note rate |
D. They would lower their note rate
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If a borrower switches from fixed rate loan to an adjustable rate loan, which of the following must occur?
A. Send a written confirmation of the change B. Send a new GFE and HUD-1 C. Send a new GFE, TIL disclosure, CHARM booklet and any relevant broker disclosure D. Nothing, as long as the initial disclosures were properly provided. |
C. Send a new GFE, TIL disclosure, CHARM booklet and any relevant broker disclosure
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***Appraisal which use the sales comparison approach include which of the following?
A. An analysis of what it would cost to rebuild the home B. Comparison of the national home average value against the subject property C. Review of recently listed real estate prices which a specific geographic area D. Comparison of value for three similar, recently sold properties |
D. Comparison of value for three similar, recently sold properties
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A property is values at $295,000. There is a first and second mortgage with a 77% CLTV. The second mortgage has a 10% LTV. What is the approximate amount of the first mortgage.
A. $197,650 B. $227,150 C. $256,650 D. $204,435 |
A. $197,650
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A property Valued at $495,000. There is a first and second mortgage with a 90% CLTV. The first mortgage has a 78% LTV. What is the approximate amount of the second mortgage?
A. $49,500 B. $54,900 C. $59,400 D. $445,500 |
C. $59,400
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The concept of loan suitability refers to:
A. Ensuring a borrower is able to provide the necessary income and assets information to meet loan program guidelines. B. Matching a loan program with a property type C. Analyzing a borrower's future income potential to provide the greatest loan amount available D. Matching potential loan programs with the current financial circumstances of a borrower. |
D. Matching potential loan programs with the current financial circumstances of a borrower.
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Which of the following does a lender use to analyze a borrower's financial capacity to determine if they are able to afford their loan?
A. CCPA B. LTV C. CIP D. DTI |
D. DTI
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Which of the following best describes what is considered in the calculation of a borrower's back ration?
A. The cost of credit in relation to the value of the loan B. All consumer debt such as credit card payment and auto loan payments C. The total amount of monthly payment made on long-term debt carried by the consumer D. Principle and interest payments |
C. The total amount of monthly payment made on long-term debt carried by the consumer
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Ms. Davis is a nurse at the local hospital. She has worked the night shift for three years and plans to continue this schedule. Her base pay is $29.50 per hour plus a 5% differential. She averages 35 hours per week. What is her qualifying income?
A. $3613.75 B. $4698.63 C. $5369.00 D. $4474.17 |
B. $4698.63
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The cost approach to appraisal include which of the following?
A. The value of the lot plu the replacement cost of the improvements B. A comparison of the national average for sales of similar properties C. Analysis of revenue generated by the property D. A value comparison with severa comparable properties |
A. The value of the lot plu the replacement cost of the improvements
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The borrower does not wish to compete the demographic questions in the Government Monitoring section of the 1003. What should you do?
A. Leave the section blank B. Tell the borrower his/her loan cannot be funded until the information is obtained C. Complete the section based on a visual observation of the borrower during a face-to-face application D. Refuse to take the application |
C. Complete the section based on a visual observation of the borrower during a face-to-face application
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Which type of disclosure must have a statement that payment of loan terms can change?
A. Adjustable rate Mortgage Disclosure B. HUD-1 C. Loan Servicing Disclosure D. Good Faith Estimate |
A. Adjustable rate Mortgage Disclosure
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***The Market Conditions Addendum required in conjunction with the Uniform Residential Appraisal Report included all of the following information except:
A. Existence of foreclosures in the neighborhood B. Description of the subject property and any improvements C. Seller concessions D. Inventory of homes in the neighborhood. |
B. Description of the subject property and any improvements
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What determines the factor or rate or annual mortgage insurance premium on an FHA loan?
A. It is based on the principal loan amount B. It is based on the borrower;s income C. It is a percentage of the the sales price D. It is based on loan-to-value |
D. It is based on loan-to-value
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Joan Johnson is a salesperson who is paid 100% commission. What type documentation would you ask her to provide as proof of her income for loan qualification?
A. Her tax return for last year B. W-2s for the past two years and a copy of her last pay stub C. A detailed verification form from her employer D. Tax returns for the past two years and an affirmation form her employer that the income is likely to continue. |
D. Tax returns for the past two years and an affirmation form her employer that the income is likely to continue.
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A property is values at $342,000. Tehre is a first and second mortgae with an 85% CLTV. The second mortgae has an 8% LTV. What is the approximate amount of the loan?
A. $259,920 B. $266,750 C. $263,340 D. $273,680 |
C. $263,340
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Mr. Cyril Cagney is paid $1800 semi-monthly. What is his monthly qualifying income?
A. $3700 B. $3800 C. $3900 D. $3600 |
D. $3600
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A borrower would be required to receive a CHARM booklet and ARM disclosure for all but which of the following scenarios?
A. A borrower chooses a fixed rate loan with 15 year term B. A borrower floats in order to obtain the best interest rate but finally decides to lock in with a 3/1 ARM C. During the loan processing period, the borrower switches from 30 year fixed rate to a 5/1 ARM D. Following application, a borrower chooses an adjustable rate loan product |
A. A borrower chooses a fixed rate loan with 15 year term
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Sam Sampson is buying a new house and plans to use the proceed from the sale of his old home for down payment pon the new property. What type of documentation might the underwriter require to substantiate these assets?
A. HUD-1 Settlement Statement form the same of the old home B. An affidavit from Sam's Real Estate Agent C. A photocopy of the check disbursed by the lender for the new owner of Sam's former home D. Appraisal for the old home. |
A. HUD-1 Settlement Statement form the same of the old home
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A borrower has applied for a refiance on her property valued at $235,000. She currently has a HELOC with a $47,000 limit ad currently owes $28,850. Teh borrower has applied for a first mortgae of $164,500. Which of the following LTV,CLTV and TLTV is accurate based on this information?
A. 70%/81%/90% B. 75%/80%/91% C. 70%/80%/95% D. 70%/83%/100% |
A. 70%/81%/90%
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What document would an underwrter reply on for detail information concerning the collateral for themortgage loan?
A. The borrower's employment documentation B. The property appraisal C. The borrower's asset statements D. The URLA |
B. The property appraisal
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Which of the following individual typically determines a loan approval based on lender guidelines?
A. Underwriter B. Processor C. Loan originator D. Closing agent |
A. Underwriter
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Why would yo analyze a borrower's capacity?
A. To ascertain the maximum loan the borrower could qualify for B. To determine if the borrower is financial capable of repaying the loan C. To determine the borrower's financial liquidity D. To ascertain how much revolving credit the borrower has been previously approved for |
B. To determine if the borrower is financial capable of repaying the loan
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In the underwriting process, the presence of derogatory information on a borrower's credit report may require_____ in order for the loan to be approved.
A. Strong compensating factors B. Private mortgage insurance C. Adequate income to pay off the obligation related to the derogatory information D. A Co-borrower |
A. Strong compensating factors
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