CRU Credit Analysis & Risk Assessment 3

Question 1

Which of the following best describes the purpose of a Rapid Rescore in the mortgage process?

Accepted Answer

To quickly update credit report data and recalculate scores after errors are corrected or balances paid

Answer

Rapid Rescore allows lenders to expedite the credit bureau update process so corrected or paid information is reflected in a new score within days.

Question 2

When a borrower's middle credit score is used for qualifying on a joint application, which score is selected?

Accepted Answer

The lower of the two middle scores when there are two borrowers

Answer

For joint applications, the representative score is each borrower's middle score, and the qualifying score is the lower of those two middle scores.

Question 3

A borrower had a foreclosure completed 5 years ago due to documented extenuating circumstances. Under Fannie Mae's extenuating circumstances policy, the borrower may be eligible for a conventional loan after:

Accepted Answer

3 years with maximum 90% LTV

Answer

Fannie Mae allows a 3-year waiting period after foreclosure when properly documented extenuating circumstances exist, with a maximum 90% LTV.

Question 4

Which type of debt is EXCLUDED from a borrower's DTI calculation under standard agency guidelines?

Accepted Answer

A co-signed mortgage where the co-signed borrower has paid on time for 12 months

Answer

Fannie Mae allows exclusion of a co-signed debt from DTI if documented proof shows the primary obligor has made all payments for the prior 12 months.

Question 5

A borrower's credit report shows a judgment that was satisfied three years ago. The underwriter's primary concern should be:

Accepted Answer

Whether any additional liens or unsatisfied judgments may still exist against the borrower

Answer

Satisfied judgments may indicate past financial stress, and underwriters must verify no additional outstanding judgments or liens could affect title.

(CRU) Certified Residential Underwriter Practice Test

(CRU) Certified Residential Underwriter Practice Test

CRU Credit Analysis & Risk Assessment 3