CMP - Certified Mortgage Processor Underwriting and Quality Control Questions and Answers

Question 1

A loan file submitted to Fannie Mae's Desktop Underwriter (DU) returns a finding of "Approve/Ineligible." What is the most likely reason for this result?

Accepted Answer

The borrower meets credit and income requirements, but a specific loan parameter does not comply with Fannie Mae's eligibility rules.

Answer

The system requires the loan to be manually underwritten by a human underwriter.

Answer

The borrower's credit score is too low to be approved under any circumstances.

Answer

The loan has been flagged for potential fraud and must be immediately denied.

Question 2

What is the primary purpose of a pre-funding Quality Control (QC) audit in the mortgage lending process?

Accepted Answer

To verify the accuracy and integrity of key loan data before the loan is funded.

Answer

To train new loan processors and underwriters on company procedures.

Answer

To satisfy regulatory reporting requirements after the loan has closed.

Answer

To market new loan products to the borrower before closing.

Question 3

When manually underwriting a conventional loan for a borrower with a slightly high debt-to-income (DTI) ratio, which of the following would be considered the strongest compensating factor?

Accepted Answer

The borrower has significant cash reserves (e.g., 12 months of PITI) remaining after closing.

Answer

The borrower is making a minimal 3% down payment.

Answer

The borrower has had their current job for only one year.

Answer

The subject property is a non-warrantable condominium.

Question 4

A processor is reviewing a credit report for a borrower applying for an FHA loan. The report shows a Chapter 7 bankruptcy that was discharged 18 months ago. The borrower has since re-established a clean credit history. Based on standard FHA guidelines, what is the status of this loan?

Accepted Answer

The loan is ineligible because FHA guidelines require a minimum of 2 years after a Chapter 7 discharge.

Answer

The loan is eligible for approval as it meets the minimum seasoning requirement.

Answer

The loan must be denied as FHA requires a minimum of 3 years after a Chapter 7 discharge.

Answer

The loan can only be approved if the borrower makes a 20% down payment.

Question 5

An underwriter issues a conditional approval that requires the borrower to provide an updated pay stub covering the last 30 days before loan documents can be drawn. This type of condition is best classified as a:

Accepted Answer

Prior-to-doc (PTD) condition.

Answer

Prior-to-funding (PTF) condition.

Answer

Post-closing condition.

Answer

Marketing condition.

Question 6

During the underwriting process, which of the following findings would be the strongest indicator of potential occupancy fraud for a loan application on a primary residence?

Accepted Answer

The borrower's current residence is a larger, more expensive home in the same city that is not listed for sale.

Answer

The borrower is a first-time homebuyer with a stable job.

Answer

The appraisal report notes that the property is currently tenant-occupied.

Answer

The borrower requested a 30-year fixed-rate mortgage.