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

Fannie Mae's Selling Guide limits seller concessions to 3% for conventional loans with LTV above 90%.

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

$42,000 divided by 6 months (January–June) equals $7,000 per month.

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

Fannie Mae requires a minimum two-year history of self-employment before the income can be considered stable and used for qualifying.

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

The 1008 form provides a concise summary of loan, property, and borrower information for the underwriter's decision.

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

FHA requires underwriters to use 1% of the outstanding student loan balance as the monthly obligation when the loan is deferred.

(CMC) Certified Mortgage Consultant Practice Test