CMC Loan Processing & Underwriting Guidelines 1

Question 1

What is the first step in the loan processing phase?

Accepted Answer

Documentation collection and review

Answer

Credit scoring

Answer

Loan disbursement

Answer

Title recording

Question 2

What is the purpose of a credit report in underwriting?

Accepted Answer

To evaluate credit history and payment behavior

Answer

To locate the borrower’s address.

Answer

To assign a real estate agent.

Answer

To compare property values.

Question 3

What role does an underwriter play in mortgage lending?

Accepted Answer

Assessing risk and approving or denying the loan

Answer

Marketing the loan to clients.

Answer

Collecting application fees.

Answer

Performing home inspections.

Question 4

Why is debt-to-income (DTI) ratio important in underwriting?

Accepted Answer

It assesses the borrower’s repayment capacity

Answer

It measures credit utilization.

Answer

It evaluates job security.

Answer

It tracks savings account growth.

Question 5

What document provides the borrower’s final loan terms and costs?

Accepted Answer

Closing Disclosure

Answer

Appraisal report

Answer

Title commitment

Answer

Credit authorization form

Question 6

What is loan pre-approval based on?

Accepted Answer

Documented financial verification

Answer

Oral statements only.

Answer

Informal borrower intentions.

Answer

Social media profile.

Question 7

Which party typically orders the home appraisal?

Accepted Answer

Lender

Answer

Borrower

Answer

Realtor

Answer

Insurance agent

Question 8

What is a conditional loan approval?

Accepted Answer

Approval contingent on specific requirements

Answer

A denial letter.

Answer

A pre-approval letter.

Answer

A title policy update.

Question 9

What is the purpose of verifying assets during loan processing?

Accepted Answer

To confirm funds for closing and reserves

Answer

To calculate property taxes.

Answer

To inspect home appliances.

Answer

To compare mortgage products.