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Loan Origination Activities Question Bank

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• What form is the standard residential loan application?
• A lender cannot charge fees (other than a credit report fee) until the borrower:
• Which document replaced the HUD-1 Settlement Statement?
• During underwriting, the lender needs to verify that the income figures on the borrower's loan application match what was actually reported...
• A borrower is considering paying discount points to reduce her interest rate on a $320,000 conventional loan. Her loan officer quotes 1.5...
• The Loan Estimate consists of how many pages?
• The Closing Disclosure consists of how many pages?
• A borrower submits a complete loan application on Monday, March 2nd. The lender delivers the initial Loan Estimate on Tuesday, March 3rd...
• A changed circumstance under TRID would include:
• Under TRID, Saturdays count as business days for:
• When loan servicing is transferred, the borrower must receive notice from:
• Desktop Underwriter (DU) and Loan Product Advisor (LPA) are examples of:
• Which of the following triggers the TRID 3-business-day Loan Estimate requirement?
• What is the maximum seller concession typically allowed on a conventional loan with 10% down?
• A borrower has a monthly gross income of $8,000. Their proposed PITI is $2,400 and total monthly debts including PITI are $3,600. What are...
• Under the ATR/QM rule, which factor is NOT one of the eight underwriting factors a lender must verify?
• In a purchase transaction, the borrower locks a rate on day 1. The lock expires in 30 days but closing is delayed to day 35 due to the...
• A borrower is self-employed. Which documents would an underwriter MOST LIKELY require to verify income?
• An appraisal comes in $15,000 below the purchase price. Which of the following is NOT a typical option for the borrower?
• What is the purpose of a title search in the loan origination process?
• A borrower submits a complete application on Monday, March 10. Under TRID, when is the latest the lender must provide the Loan Estimate?
• A borrower has a gross monthly income of $8,000. Their monthly debts include a $450 car payment, $200 student loan, and $150 credit card...
• A lender charges a 1% origination fee on a $300,000 loan. The borrower also pays $2,500 in discount points. What is the total...
• A borrower purchases a $400,000 home with 10% down. The loan amount is $360,000 at 6% for 30 years. What is the approximate monthly...
• A self-employed borrower claims $120,000 annual income. The lender requires two years of tax returns. Year 1 shows $110,000 and Year 2...
• A borrower receives a Loan Estimate showing an appraisal fee of $500. At closing, the appraisal fee is $525. The appraisal company was...
• A borrower applies for a mortgage and the lender discovers the property is in a Special Flood Hazard Area (SFHA). What must the lender...
• An MLO is processing a loan and discovers the borrower has an affiliated business arrangement with the title company. Under RESPA, what is...
• A borrower with a 7/1 ARM has an initial rate of 3.5%, a margin of 2.75%, and a 2/2/5 cap structure. After 7 years, the index is 4.0%. What...
• Three changes to the Closing Disclosure require a new 3-business-day waiting period. Which of the following is one of those changes?
• A borrower wants to know what PITI stands for and how it affects qualification. Which response is MOST accurate?
• A lender requires a title search before closing. The preliminary title report reveals an easement on the property. How should the MLO...
• During processing, the underwriter requests a Verification of Employment (VOE). The employer confirms the borrower has been employed for 8...
• A borrower purchases a home for $500,000 and puts 15% down. What is the LTV ratio, and will PMI likely be required?
• A home is appraised at $320,000. The purchase price is $310,000. The borrower wants a 90% LTV loan. What is the maximum loan amount?
• A borrower is purchasing a $400,000 home with 10% down. The lender charges 1.5 discount points. How much do the points cost in dollars?
• A borrower has a $250,000 loan at 6% interest for 30 years. What is the approximate monthly interest payment in the FIRST month?
• A property is valued at $500,000. The first mortgage is $350,000 and there is a HELOC with a balance of $50,000. What is the CLTV?
• A borrower has gross monthly income of $9,200. Their monthly debts are: car payment $380, student loan $275, credit card minimums $125, and...
• An FHA borrower is purchasing a home for $280,000 with 3.5% down. The upfront MIP is 1.75%. What is the total loan amount including the...
• A borrower ARM has an initial rate of 3.5%, a 5/2/5 cap structure, and the index is now at 4.0% with a margin of 2.75%. What is the rate at...
• A borrower earns $95,000 annually. What is their gross monthly income?
• A self-employed borrower shows net income of $120,000 in Year 1 and $140,000 in Year 2 on their tax returns. What is the monthly income...
• A borrower wants to know how much house they can afford. Their gross monthly income is $7,000. Using a 28% front-end DTI limit, what is the...
• A property appraised at $425,000. The borrower has a first mortgage of $340,000. What is the LTV, and will PMI be required on a...
• A borrower takes out a $200,000 conventional loan. The lender charges an origination fee of 1% and the borrower also pays 0.5 discount...
• A borrower is refinancing. Their old loan has a balance of $250,000 at 6.0%. The new loan is $250,000 at 5.0%. How much will the borrower...
• A VA borrower purchases a home for $350,000 with 0% down. The VA funding fee for a first-time user with no down payment is 2.15%. What is...
• RESPA Section 10 limits the escrow account cushion to no more than:
• A rate lock agreement guarantees that the borrower:
• The primary difference between a loan processor and an underwriter is:
• An AUS recommendation of "Refer" typically means:
• The settlement agent at closing is primarily responsible for:
• Wire fraud in real estate closings most commonly involves:
• Warehouse lending allows mortgage companies to:
• The key difference between a mortgage broker and a correspondent lender is:
• A cash-out refinance differs from a rate-and-term refinance because:
• A post-closing quality control audit by the lender typically reviews:
• In a table funding arrangement, who provides the funds at the closing table?
• A borrower wants to refinance but keep their existing HELOC. The HELOC lender must sign what document?
• What is the key difference between a one-time close and a two-time close construction loan?
• In a construction loan, funds are disbursed according to a draw schedule. What must occur before each disbursement?
• What is an interest reserve in a construction loan?
• When qualifying a borrower for a construction loan, the lender typically uses which payment for DTI calculation?
• A borrower closes a one-time close construction loan at a 6.5% rate. During the 8-month construction period, market rates drop to 5.75%....
• A construction borrower requests a draw for framing completion, but the inspector finds only 70% of framing is done. What should the lender...
• A consumer provides the following information to an MLO: name, income, SSN, property address, estimated property value, and desired loan...
• A borrower calls an MLO and provides: name, annual income, and desired loan amount of $350,000. No other information is given. Is TRID...
• What is the key distinction between a pre-qualification letter and a pre-approval letter?
• What should a compliant pre-approval letter include?
• A borrower emails the following to an MLO: name, annual income, SSN, and desired loan amount of $400,000. They do NOT provide a property...
• A borrower purchases a home for $250,000 with a 10% down payment. What is the LTV ratio?
• A property appraises at $350,000. The borrower puts down $52,500. What is the LTV?
• A borrower qualifies for max 80% LTV. Property worth $400,000. Maximum loan amount?
• Appraisal is $200,000, purchase price $195,000. Lender uses lower value. Down payment $30,000. LTV?
• Borrower needs 85% LTV on $500,000 property. Required down payment?
• Gross monthly income $6,000. Housing expenses (PITI) $1,500. Front-end DTI?
• Monthly income $6,500. Housing $1,800, auto $400, credit cards $200, student loan $300. Back-end DTI?
• Housing payment $1,700, other debts $400/mo, income $5,200. QM eligible (43% max DTI)?
• Borrower earns $7,500/mo. At 43% max DTI with no other debts, max housing payment?
• $200,000 loan at 6% for 30 years. Approximate monthly P&I?
• Borrower pays 2 discount points on a $200,000 loan. Dollar cost of points?
• Origination fee is 1% on a $275,000 loan. Fee amount?
• ARM has index at 3.5% and margin of 2.25%. Fully indexed rate?
• ARM: initial rate 4%, periodic cap 2%, lifetime cap 6%. Maximum rate ever?
• FHA loan of $200,000. UFMIP rate is 1.75%. Upfront MIP amount?
• Annual property tax $4,800, annual insurance $1,200. Monthly escrow payment?
• Self-employed borrower shows $120,000 net income on Schedule C. Monthly qualifying income?
• Borrower has rental property generating $2,000/mo gross rent. At 75% factor, qualifying rental income?
• Home price $300,000, down payment $60,000. Is PMI required on conventional loan?
• Seller agrees to pay 3% of purchase price toward closing costs on $250,000 home. Seller credit amount?
• CLTV: First mortgage $200,000, HELOC $50,000, property value $300,000. CLTV?
• 2-1 buydown: Year 1 rate is 2% below note rate of 6.5%. Year 1 rate?
• Loan amount $180,000. Points and fees total $8,100. Does this exceed QM 3% cap?
• Under TRID, the Loan Estimate must be provided within how many business days of receiving an application?
• A changed circumstance occurs after the initial LE. The lender must issue a revised LE within:
• Which change to the CD triggers a new 3-day waiting period?
• What document does a lender use to verify a borrowers tax returns directly with the IRS?
• Pre-approval differs from pre-qualification primarily because pre-approval:
• A rate lock expires in 3 days but the loan has not closed. The borrower should: