CMP - Certified Mortgage Processor Credit Analysis and Credit Reports Questions and Answers Flashcards
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Read the first 6 CMP - Certified Mortgage Processor Credit Analysis and Credit Reports Questions and Answers flashcards as text
A borrower has two scores from the tri-merge report because one bureau returned no score. Which score is used to qualify?
Answer: The lower of the two scores
When only two scores are available, the lower of the two is used as the qualifying score per Fannie Mae and Freddie Mac guidelines.
What is a 'rapid rescore' and when would a mortgage processor request one?
Answer: An expedited update to credit bureau records that reflects recent payoffs or corrections, improving the score quickly
A rapid rescore allows a mortgage processor to submit documented account changes to the bureaus for quick score updates, often used when a borrower needs to reach a score threshold.
Which type of inquiry on a credit report does NOT affect a borrower's FICO score?
Answer: A soft inquiry from a pre-qualification check
Soft inquiries, such as those from pre-qualification checks or employer background reviews, do not impact FICO scores unlike hard inquiries.
What is the standard validity period for a residential mortgage credit report before it must be refreshed?
Answer: 120 days
Most conventional, FHA, and VA guidelines require a new credit report if the existing one is more than 120 days old at the time of closing.
A borrower disputes a derogatory account on their credit report during loan processing. How should the processor handle this?
Answer: Follow AUS and lender guidelines — disputed accounts may need to be removed from dispute status for accurate underwriting
Accounts in active dispute status can skew AUS results because they may be excluded from scoring; underwriters typically require dispute status removed or proof the account is not the borrower's.
What is the purpose of a Mortgage Only credit report versus a tri-merge report?
Answer: It is a limited report pulled mid-transaction to verify no new credit has been opened
A Mortgage Only or update report is often pulled close to closing to confirm the borrower hasn't opened new credit or incurred new debt since the original tri-merge report.