CMP - Certified Mortgage Processor Analyzing Borrower Financials Questions and Answers

Question 1

A self-employed borrower provides two years of tax returns.
Their Schedule C net profit was $75,000 in the most recent year and $65,000 in the prior year.
What is the qualifying monthly income a mortgage processor should calculate for this borrower?

Accepted Answer

$5,833

Answer

$5,417

Answer

$6,250

Answer

$7,000

Question 2

When analyzing a borrower's bank statements, which of the following would be the BIGGEST red flag for an underwriter?

Accepted Answer

Several non-sufficient funds (NSF) fees within the last 60 days

Answer

A large, documented gift from a family member

Answer

Consistent monthly deposits from a verified employer

Answer

A one-time large withdrawal for a documented earnest money deposit

Question 3

A borrower is purchasing a duplex as an owner-occupied property. They will live in one unit and rent out the other. The appraiser determines the fair market rent for the second unit is $1,600 per month. How much of this rental income can typically be used for qualifying purposes?

Accepted Answer

$1,200

Answer

$1,600

Answer

$800

Answer

$0, as the property is not yet leased

Question 4

A borrower has a gross monthly income of $7,000. Their monthly liabilities include a $500 car payment, a $250 student loan payment, and a $150 minimum credit card payment. The proposed new housing payment (PITI) is $2,100. What is the borrower's back-end debt-to-income (DTI) ratio?

Accepted Answer

43%

Answer

30%

Answer

38%

Answer

50%

Question 5

Which of the following is generally considered an acceptable source for a borrower's down payment funds?

Accepted Answer

A documented and verified gift from an immediate family member

Answer

A cash advance from a credit card

Answer

An unsecured loan from a friend

Answer

Undocumented cash stored at home

Question 6

A mortgage processor is reviewing an application where the borrower is a 30% owner of an S-Corporation. To accurately determine qualifying income, in addition to personal tax returns, which business tax form is essential to analyze?

Accepted Answer

Form 1120-S and K-1

Answer

Form 1099-MISC

Answer

Form W-2

Answer

Schedule C (Form 1040)