Mortgage Mortgage Loan Origination Activities Questions and Answers 3

Question 1

What is the primary purpose of the initial disclosure package provided during mortgage loan origination?

Accepted Answer

To inform the borrower of estimated loan costs, terms, and their legal rights

Answer

To lock the borrower into a specific interest rate

Answer

To finalize the loan approval decision

Answer

To transfer the servicing rights to another lender

Question 2

Under the Ability-to-Repay rule, which factor must a loan originator verify before approving a qualified mortgage?

Accepted Answer

The borrower's current income, assets, and employment status

Answer

Only the borrower's credit score

Answer

The borrower's marital status

Answer

The appraised value of the property alone

Question 3

During origination, a borrower provides a gift letter for their down payment. What must the gift letter confirm?

Accepted Answer

That the funds are a true gift with no expectation of repayment

Answer

That the funds will be repaid within five years

Answer

That the gift came from the borrower's employer

Answer

That the gift amount exceeds 20% of the purchase price

Question 4

Which action by a loan originator would violate RESPA Section 8 during the origination process?

Accepted Answer

Accepting a referral fee from a real estate agent for recommending a specific lender

Answer

Charging the borrower an application fee disclosed on the Loan Estimate

Answer

Ordering a property appraisal from an approved appraiser

Answer

Providing the borrower with a list of approved settlement service providers

Question 5

A loan originator discovers a material change in the borrower's financial situation after issuing the Loan Estimate. What is the required action?

Accepted Answer

Issue a revised Loan Estimate reflecting the changed circumstances

Answer

Proceed with the original Loan Estimate without changes

Answer

Immediately deny the loan application

Answer

Notify only the real estate agent of the change

Question 6

What is the maximum points and fees threshold for a loan to qualify as a Qualified Mortgage under the general QM definition?

Accepted Answer

3% of the total loan amount for loans of $100,000 or more

Answer

5% of the total loan amount regardless of size

Answer

1% of the total loan amount

Answer

No limit on points and fees