Key Mortgage Closing Documents Flashcards
7 cards from real NSA practice questions. Tap to flip, then mark Knew It or Still Learning — missed cards come back until you master them.
Read the first 7 Key Mortgage Closing Documents flashcards as text
In a piggyback loan closing (80/10/10), how many Promissory Notes will the borrower typically sign?
Answer: Two Notes — one for each separate loan
Each separate loan in a piggyback structure has its own Promissory Note, so the borrower signs one Note for the first mortgage and one for the second.
A borrower is refinancing but tells the NSA the rescission period doesn't apply because they already own the home. The NSA should:
Answer: Provide the Notice of Right to Cancel as instructed regardless of the borrower's belief
The NSA must present all documents as provided by the lender; it is not the NSA's role to determine which legal rights apply or waive required disclosures.
Which document in the closing package evidences the lender's title insurance policy?
Answer: The ALTA Lender's Title Insurance Commitment or Policy
The ALTA Lender's Title Insurance Commitment (or final policy) is the specific document that provides evidence of the title insurer's coverage for the lender.
A trust certification or trust affidavit is presented at closing when:
Answer: Title to the property is held in a revocable living trust
When a living trust holds title, lenders require a trust certification to confirm the trust's existence, the trustee's identity and authority, and the trust's power to purchase real estate.
The Affiliated Business Arrangement (AfBA) Disclosure is required under RESPA when:
Answer: A settlement service provider refers the borrower to a company in which it has an ownership interest
RESPA Section 8 requires disclosure and the borrower's right to choose alternatives when a provider refers business to an affiliated company.
When an NSA encounters a page in the loan package labeled 'DO NOT SIGN — LENDER COPY,' the correct action is:
Answer: Set it aside and ensure the borrower does not sign that copy
Lender copies are included for record-keeping and must not bear borrower signatures; the NSA should present only the designated signature copies.
After the loan closes and funds are disbursed, which document releases the Deed of Trust lien once the loan is paid in full?
Answer: A Satisfaction of Mortgage or Deed of Reconveyance
At full payoff, the lender records a Satisfaction of Mortgage (in mortgage states) or the trustee records a Deed of Reconveyance (in Deed of Trust states) to clear the lien.