Documentation & Legal Requirements Flashcards
7 cards from real CRU practice questions. Tap to flip, then mark Knew It or Still Learning — missed cards come back until you master them.
Read the first 7 Documentation & Legal Requirements flashcards as text
Under FIRREA, which threshold allows federally regulated lenders to use a Property Condition Report instead of a full USPAP-compliant appraisal for certain transactions?
Answer: Loans up to $500,000
FIRREA exemptions allow federally regulated institutions to use evaluations instead of full appraisals for transactions at or below $500,000 (non-complex residential).
A property is located in a Special Flood Hazard Area (SFHA). Under the Flood Disaster Protection Act, what is required before the loan can close?
Answer: Flood insurance in at least the amount of the loan or the maximum available, whichever is less
The Flood Disaster Protection Act requires mandatory flood insurance for properties in SFHAs, with coverage at least equal to the loan amount or NFIP maximum, whichever is less.
When an appraisal identifies a property condition that requires repair, and the lender requires the repair to be completed before closing, what document must be obtained after the work is done?
Answer: A completion certificate (1004D) or appraisal update confirming the repair
Fannie Mae Form 1004D (Appraisal Update and/or Completion Report) is used to certify that required repairs or improvements have been completed satisfactorily.
Which title document provides a detailed history of all recorded instruments affecting a property's ownership over time?
Answer: Abstract of Title
An Abstract of Title is a chronological summary of all recorded documents (deeds, liens, judgments) affecting ownership of a specific property.
A lender's title insurance policy (loan policy) primarily protects which party from title defects discovered after closing?
Answer: The lender's security interest up to the loan amount
The lender's (loan) title insurance policy protects the lender's security interest in the property up to the outstanding loan balance against covered title defects.
For a condominium project to be eligible for Fannie Mae financing, what document must the HOA provide confirming the project meets agency warrantability requirements?
Answer: A fully executed Project Questionnaire (Form 1076 or equivalent)
Fannie Mae requires a completed Condominium Project Questionnaire (Form 1076) to verify budget adequacy, owner-occupancy ratios, litigation status, and insurance compliance.
Under the Homeowners Protection Act (PMI Cancellation Act), at what LTV threshold does a borrower gain the legal right to REQUEST cancellation of private mortgage insurance on a conforming loan?
Answer: 80% LTV based on original amortization schedule or actual payments
The Homeowners Protection Act gives borrowers the right to request PMI cancellation when the LTV reaches 80% based on the original property value per the scheduled amortization or actual payments.