Mortgage Loan Origination Process 3

Question 1

Which of the following is NOT one of the six items that trigger a completed mortgage application under TRID?

Accepted Answer

Borrower's employment history for the past two years

Answer

Borrower's Social Security number

Answer

Subject property address

Answer

Estimated value of the property

Question 2

What is the role of an Automated Underwriting System (AUS) such as Fannie Mae's Desktop Underwriter during origination?

Accepted Answer

To provide a risk assessment and preliminary eligibility recommendation

Answer

To generate the Loan Estimate document automatically

Answer

To order the property appraisal on behalf of the lender

Answer

To calculate the borrower's escrow payment amounts

Question 3

A borrower has a front-end DTI of 31% and a back-end DTI of 45%. Which ratio is most likely to concern a conventional loan underwriter?

Accepted Answer

Back-end DTI of 45%

Answer

Front-end DTI of 31%

Answer

Both ratios equally

Answer

Neither ratio since both are within FHA limits

Question 4

During origination, what does the term 'conditions' refer to in an underwriter's approval?

Accepted Answer

Specific outstanding items the borrower must satisfy before closing

Answer

Interest rate conditions tied to market index movements

Answer

Environmental hazard conditions found during the appraisal

Answer

Credit score thresholds required for final approval

Question 5

Which party is responsible for ordering the appraisal in a typical residential mortgage origination under current AMC rules?

Accepted Answer

The lender orders through an Appraisal Management Company (AMC) or an independent process

Answer

The borrower directly contacts a licensed appraiser

Answer

The real estate agent selects the appraiser

Answer

The seller's lender orders the appraisal

Question 6

What is 'overlays' in the context of mortgage origination?

Accepted Answer

Lender-specific requirements stricter than agency minimum guidelines

Answer

Additional fees layered on top of closing costs by title companies

Answer

Government regulations that overlay state lending laws

Answer

Insurance coverage added on top of primary hazard insurance

Question 7

In the loan origination workflow, what typically triggers the transition from 'processing' to 'underwriting'?

Accepted Answer

The processor submits the complete loan file for credit decision

Answer

The borrower signs the initial disclosures

Answer

The appraisal report is ordered from the AMC

Answer

The rate is locked by the loan officer