CMC Loan Processing and Underwriting Guidelines 2

Question 1

Which document establishes the maximum allowable seller concessions for a conventional conforming loan with an LTV above 90%?

Accepted Answer

Fannie Mae Selling Guide

Answer

HUD Handbook 4000.1

Answer

VA Lenders Handbook

Answer

USDA Rural Development Guidelines

Question 2

A borrower's pay stub shows year-to-date earnings of $42,000 through June. What is the underwriter's calculated monthly income?

Accepted Answer

$7,000

Answer

$6,000

Answer

$3,500

Answer

$8,400

Question 3

Under Fannie Mae guidelines, how long must a borrower be self-employed before that income can be used for qualification?

Accepted Answer

2 years

Answer

1 year

Answer

6 months

Answer

3 years

Question 4

What is the primary purpose of a 1008 Uniform Underwriting and Transmittal Summary?

Accepted Answer

To summarize key loan data for underwriting review

Answer

To authorize the appraisal order

Answer

To disclose closing costs to the borrower

Answer

To verify employment with the employer

Question 5

A borrower has a $500 monthly student loan currently in deferment. Under FHA guidelines, how should the underwriter treat this debt?

Accepted Answer

Include 1% of the outstanding balance as a monthly payment

Answer

Exclude it entirely since it is deferred

Answer

Use the actual $500 payment

Answer

Include 0.5% of the outstanding balance

Question 6

Which type of income requires the underwriter to average earnings over a 24-month period rather than using current rates?

Accepted Answer

Commission income exceeding 25% of total income

Answer

Base salary income

Answer

Social Security income

Answer

Pension income

Question 7

An appraisal comes in $15,000 below the purchase price on a conventional loan. What is the underwriter's standard course of action?

Accepted Answer

Base the loan on the appraised value, requiring the borrower to cover the difference

Answer

Automatically order a second appraisal

Answer

Deny the loan immediately

Answer

Allow the full purchase price if the borrower has strong credit