Loan Servicing and Portfolio Management Flashcards
7 cards from real CMA practice questions. Tap to flip, then mark Knew It or Still Learning — missed cards come back until you master them.
Read the first 7 Loan Servicing and Portfolio Management flashcards as text
Which entity is primarily responsible for collecting monthly mortgage payments, managing escrow accounts, and handling borrower inquiries after a loan is originated?
Answer: The mortgage servicer
The mortgage servicer manages ongoing loan administration including payment collection, escrow management, and borrower communication after origination.
An escrow account held by a mortgage servicer is primarily used to pay which of the following on behalf of the borrower?
Answer: Property taxes and homeowners insurance premiums
Servicers maintain escrow accounts to collect and disburse property taxes and homeowners insurance to ensure these obligations are met and the collateral is protected.
Under federal mortgage servicing rules, a borrower's loan is generally considered delinquent when a payment is how many days past due?
Answer: 30 days past the due date
A mortgage is typically reported as delinquent and triggers servicer action protocols when a payment is 30 days past the contractual due date.
What is forbearance in the context of mortgage loan servicing?
Answer: A temporary suspension or reduction of mortgage payments
Forbearance is a temporary agreement allowing a borrower to pause or reduce payments, typically during financial hardship, without triggering foreclosure.
A loan modification differs from a refinance primarily because a modification:
Answer: Changes the original loan terms without creating a new loan
A loan modification alters the existing loan's terms (rate, term, or principal) without originating a new loan, avoiding the costs and underwriting of a refinance.
Under RESPA, when a mortgage servicing transfer occurs, the borrower must receive written notice at least how many days before the effective transfer date?
Answer: 15 days
RESPA requires that borrowers receive written notice of a servicing transfer at least 15 days before the effective date, ensuring they know where to send future payments.
Which of the following best describes a 'loss mitigation' option in mortgage servicing?
Answer: An approach used to reduce lender losses when a borrower cannot meet payment obligations
Loss mitigation encompasses options such as forbearance, loan modification, short sale, or deed-in-lieu designed to minimize financial losses to the lender when a borrower is in distress.