Mortgage Loan Origination Activities 2

Question 1

Under RESPA, within how many business days must a lender provide a Loan Estimate after receiving a completed loan application?

Accepted Answer

3 business days

Answer

RESPA and TILA-RESPA Integrated Disclosure (TRID) rules require lenders to deliver the Loan Estimate within 3 business days of receiving a completed application.

Question 2

A borrower's loan application is considered 'complete' under TRID when the lender has collected which six pieces of information?

Accepted Answer

Name, SSN, income, property address, estimated value, and loan amount

Answer

TRID defines a complete application as: borrower's name, income, SSN, property address, estimated property value, and desired loan amount.

Question 3

Which document replaced the Good Faith Estimate (GFE) and Truth-in-Lending (TIL) disclosure for most residential mortgages starting in October 2015?

Accepted Answer

Loan Estimate

Answer

The Loan Estimate replaced the GFE and early TIL disclosure as part of the TRID rule effective October 3, 2015.

Question 4

During loan origination, what is the primary purpose of the 1003 form (Uniform Residential Loan Application)?

Accepted Answer

To collect borrower financial and property information needed to evaluate the loan

Answer

The URLA (Form 1003) is the standard application used to gather borrower demographics, income, assets, liabilities, and property details for underwriting.

Question 5

A mortgage loan originator (MLO) collects an upfront application fee before the borrower has received the Loan Estimate. Under TRID, this practice is:

Accepted Answer

Prohibited, except for a bona fide credit report fee

Answer

TRID prohibits collecting fees from a borrower before they have received and acknowledged the Loan Estimate, except for a bona fide and reasonable credit report fee.

Mortgage Practice Test

Mortgage Practice Test

Mortgage Loan Origination Activities 2