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18 Cards in this Set
- Front
- Back
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Prequalification
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estimate of a loan for which the borrower can qualify based on statements regarding his financial condition
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Pre-approval
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Refers to letter from originator showing the estimate of loan amount for which the borrower can qualify, pending verification of income/assets
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final approval subject to?
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property value sufficent to support the loan
marketable title condition of the property buyer staying creditworthy until closing |
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loan origination
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process of making or originating a new loan
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what do you need to process the loan?
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paystubs, tax returns, payment & bank account statements, assets, credit report (with permission from the borrower)
preparation of application with information needed for loan approval |
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URLA
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Uniform residential loan application
freddie mac form 65/ fannie mae form 1003 |
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methods of completion for the 1003
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in person, phone, mail or online
all blanks must be completed |
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what are the 4 sections on a 1003
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types of mortgage/loan terms
property information and loan purpose borrower information details of transaction |
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what additional information is needed from the borrower for the 1003
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declarations from borrower
borrower signature (acknowledging truthfullness) information for government monitering (required by HMDA and monitered by ECOA) |
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What needs to be verified on a loan application
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income, employment and housing payment history
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fixed income
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must be verified for 12-24 months and expected to continue for at least 3 years
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nontaxable income
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may be grossed up
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self employeed borrowers must provide the following
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financial statements
tax returns sole proprietorship- schedule c/ profit & loss statement and 1040 individual returns partnership- partnership return income 1065; k-1 and 1040 corporation; must have corporate returns 1120; 1099 DIV and 1040 Limited Partnership; partnership return 1065 (not taxed) k-1 and 1040 |
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loan processing
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prepares loan package for UW
collects verification of information from borrowers for transaction determine any additional information needed suspicious information- verify |
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alt- a loans (subprime)
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used for applicants unwilling to provide lender with financial information/documentation
(self employeed, paid on commission, divorced, lack of documentation for 2 years) |
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risk based pricing model
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upfront fees/interest rates based on degree of risk posed by borrower
the worse the risk the high the rate and costs |
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types of alt-a loans
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no documentation
limited documentation aleternative documentation |
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limited documentation for higher priced loans
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prohibited by TILA's Regulation Z
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