Mortgage Loan Origination Process 2

Question 1

Which federal law requires lenders to provide a Loan Estimate within three business days of receiving a mortgage application?

Accepted Answer

TRID (TILA-RESPA Integrated Disclosure) rule

Answer

Truth in Lending Act (TILA)

Answer

RESPA Section 6

Answer

Equal Credit Opportunity Act

Question 2

During loan origination, what does the term 'pre-qualification' primarily rely on?

Accepted Answer

Self-reported borrower information without formal verification

Answer

A full credit report pull and verified income documents

Answer

A hard inquiry on the borrower's credit file

Answer

An appraisal of the subject property

Question 3

A borrower's 'debt-to-income ratio' (DTI) during origination compares monthly debt payments to which figure?

Accepted Answer

Gross monthly income before taxes and deductions

Answer

Net monthly income after taxes

Answer

Annual gross income divided by 12

Answer

Take-home pay plus any bonuses

Question 4

What is the primary purpose of the 'three-day waiting period' after a borrower receives the Closing Disclosure?

Accepted Answer

To give the borrower time to review final loan terms before closing

Answer

To allow the underwriter to complete the final credit review

Answer

To enable the title company to prepare closing documents

Answer

To allow the lender to lock in the final interest rate

Question 5

Which origination step involves verifying that the subject property's value supports the requested loan amount?

Accepted Answer

Appraisal

Answer

Title search

Answer

Income verification

Answer

Flood certification

Question 6

What does 'lock-in' refer to during the mortgage origination process?

Accepted Answer

Committing to a specific interest rate for a defined period

Answer

Freezing the borrower's credit report to prevent new inquiries

Answer

Locking the loan file so underwriting changes are prohibited

Answer

Securing a down payment in an escrow account

Question 7

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

Accepted Answer

3 business days

Answer

1 business day

Answer

5 business days

Answer

7 business days