CMA Loan Servicing and Portfolio Management 2

Question 1

In a short sale, the proceeds from the sale of the property are:

Accepted Answer

Less than the outstanding mortgage balance

Answer

A short sale occurs when the home sells for less than the mortgage balance owed, requiring lender approval since the proceeds do not fully repay the debt.

Question 2

A deed in lieu of foreclosure benefits the lender primarily by:

Accepted Answer

Avoiding the time and expense of the formal foreclosure process

Answer

When a borrower voluntarily deeds the property to the lender, it eliminates the lengthy and costly formal foreclosure process while achieving the same outcome for the lender.

Question 3

What is the primary distinction between a mortgage servicer and a mortgage lender?

Accepted Answer

The lender funds the loan, while the servicer manages it after origination

Answer

The lender originates and funds the loan at closing, while the servicer manages day-to-day administration of the loan on behalf of the investor who owns it.

Question 4

Which statement best describes a 'non-performing loan' (NPL) in a mortgage portfolio?

Accepted Answer

A loan on which the borrower has stopped making required payments

Answer

A non-performing loan is one where the borrower is in default or has stopped making payments, causing it to generate no expected income for the portfolio holder.

Question 5

Real Estate Owned (REO) properties are best described as:

Accepted Answer

Properties acquired by a lender after an unsuccessful foreclosure auction

Answer

REO properties are those a lender takes ownership of when a foreclosure sale does not generate enough proceeds to cover the loan balance, leaving the lender as the property owner.

(CMA) Certified Mortgage Advisor Practice Test

(CMA) Certified Mortgage Advisor Practice Test

CMA Loan Servicing and Portfolio Management 2