CMP - Certified Mortgage Processor Loan Processing Fundamentals Questions and Answers

Question 1

According to the TILA-RESPA Integrated Disclosure (TRID) rule, when must the initial Loan Estimate be provided to a mortgage applicant?

Accepted Answer

Within 3 business days of the lender's receipt of the loan application.

Answer

At the time of the loan application submission.

Answer

Within 7 business days before the loan consummation.

Answer

At least 10 business days prior to closing.

Question 2

A loan processor is calculating a borrower's back-end debt-to-income (DTI) ratio. The borrower has a gross monthly income of $6,000. Their proposed monthly mortgage payment (PITI) is $1,800. They also have a $400 monthly car payment and a $200 minimum monthly credit card payment. What is the borrower's back-end DTI?

Accepted Answer

40%

Answer

30%

Answer

37%

Answer

45%

Question 3

Which of the following is the primary purpose of the IRS Form 4506-C in the mortgage loan process?

Accepted Answer

To authorize the lender to obtain transcripts of the borrower's tax returns from the IRS for income verification.

Answer

To report the borrower's income directly to the IRS.

Answer

To request a copy of the borrower's complete tax return.

Answer

To apply for a federal tax identification number for the property.

Question 4

A mortgage broker refers a client to a title company and in return, the title company provides the broker with free marketing flyers and pays for their client appreciation event. This arrangement is a potential violation of which federal regulation?

Accepted Answer

Real Estate Settlement Procedures Act (RESPA)

Answer

Truth in Lending Act (TILA)

Answer

Fair Housing Act (FHA)

Answer

Equal Credit Opportunity Act (ECOA)

Question 5

Under the CFPB's rules, after the initial Closing Disclosure is delivered to the borrower, a new three-business-day waiting period is triggered if which of the following changes occurs?

Accepted Answer

The annual percentage rate (APR) becomes inaccurate.

Answer

A typographical error is corrected in the property address.

Answer

The seller's closing costs increase slightly.

Answer

The date of the first payment changes by one day.

Question 6

Which of the following is a core responsibility of a mortgage loan processor?

Accepted Answer

Ordering and reviewing the property appraisal.

Answer

Making the final decision to approve or deny the loan.

Answer

Negotiating the interest rate with the borrower.

Answer

Marketing loan products to potential applicants.