CMP - Certified Mortgage Processor Appraisal and Title Review Questions and Answers

Question 1

When reviewing a preliminary title report, a mortgage processor discovers a mechanic's lien on the property. Which of the following is the most appropriate next step?

Accepted Answer

Communicate the finding to the loan officer and request evidence of the lien being satisfied before closing.

Answer

Ignore the lien as it is the seller's responsibility.

Answer

Recommend the loan be denied immediately.

Answer

Assume the title company will resolve it without any further action.

Question 2

A Closing Protection Letter (CPL) is issued by the title insurance underwriter primarily to protect which party against misconduct by the closing agent?

Accepted Answer

The lender and sometimes the borrower

Answer

The property seller

Answer

The real estate agents involved in the transaction

Answer

The property appraiser

Question 3

An appraiser is determining the value of a single-family residence for a conventional purchase loan. The most common and preferred appraisal report form used for this purpose is the:

Accepted Answer

Uniform Residential Appraisal Report (URAR Form 1004)

Answer

Broker Price Opinion (BPO)

Answer

Restricted Appraisal Report

Answer

Narrative Appraisal Report

Question 4

Which of the following items is a critical point of comparison between the appraisal report and the loan application for a mortgage processor?

Accepted Answer

The seller's name and the property address

Answer

The appraiser's license number

Answer

The color of the front door

Answer

The type of camera used for appraisal photos

Question 5

A borrower is purchasing a home and the lender requires title insurance. What is the primary purpose of the lender's title insurance policy?

Accepted Answer

To protect the lender's financial interest against past title defects.

Answer

To protect the borrower's equity in the property.

Answer

To insure the property against future events like fire or theft.

Answer

To guarantee the property will appreciate in value.

Question 6

During an appraisal review for a property in a new subdivision, the processor notes that the appraiser used comparable sales from a neighborhood 10 miles away with superior amenities. This is a potential red flag because:

Accepted Answer

The use of distant, superior comparables may artificially inflate the property's value.

Answer

The appraiser is not allowed to use sales outside of the subject's city.

Answer

Appraisers must use a minimum of five comparable sales.

Answer

The property value should be based solely on the cost to build.

When reviewing a preliminary title report, a mortgage processor discovers a mechanic's lien on the property.Which of the following is the most appropriate next step?

When reviewing a preliminary title report, a mortgage processor discovers a mechanic's lien on the property.
Which of the following is the most appropriate next step?