Loan Documents and Procedures 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 Loan Documents and Procedures flashcards as text
The Affiliated Business Arrangement (AfBA) disclosure is required when:
Answer: A settlement service provider refers business to a company it has a financial interest in
RESPA requires an AfBA disclosure when a referral is made to a settlement service provider in which the referring party has an ownership or financial interest.
An NSA discovers a borrower's name is spelled differently on two separate loan documents. What is the correct course of action?
Answer: Stop the signing and notify the lender or title company immediately
Name discrepancies across documents are a title and underwriting issue that must be resolved by the lender or title company before the signing proceeds.
The Servicing Disclosure Statement informs the borrower of what potential future event?
Answer: Whether the lender may transfer loan servicing to another company
The Servicing Disclosure Statement tells borrowers whether their loan may be sold or transferred to a different servicer after closing.
What is the purpose of the Hazard Insurance Disclosure or Acknowledgment in a loan package?
Answer: It confirms the borrower will maintain adequate property insurance coverage
This document confirms the borrower understands their obligation to maintain homeowner's insurance as required by the loan agreement.
A borrower at a closing tells the NSA they are signing on behalf of another person using a Power of Attorney. The NSA should:
Answer: Verify the POA document is original, valid, and review it with the lender's instructions
The NSA must review the original POA for validity, ensure it covers the transaction, and follow the lender's specific instructions for POA signings.
What does the term 'straw buyer' refer to in real estate fraud?
Answer: A person who purchases property on behalf of someone else to conceal the true buyer's identity
A straw buyer is someone whose name and credit are used to fraudulently obtain financing for a property intended for a different, undisclosed party.
When an NSA completes a notarization, which element in the notarial certificate indicates the state where the act occurred?
Answer: The venue (state and county designation)
The venue—the 'State of ___, County of ___' statement at the top of the notarial certificate—identifies the jurisdiction where the notarization took place.