NSA Key Mortgage Closing Documents 5

Question 1

In a piggyback loan closing (80/10/10), how many Promissory Notes will the borrower typically sign?

Accepted Answer

Two Notes — one for each separate loan

Answer

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.

Question 2

A borrower is refinancing but tells the NSA the rescission period doesn't apply because they already own the home. The NSA should:

Accepted Answer

Provide the Notice of Right to Cancel as instructed regardless of the borrower's belief

Answer

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.

Question 3

Which document in the closing package evidences the lender's title insurance policy?

Accepted Answer

The ALTA Lender's Title Insurance Commitment or Policy

Answer

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.

Question 4

A trust certification or trust affidavit is presented at closing when:

Accepted Answer

Title to the property is held in a revocable living trust

Answer

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.

Question 5

The Affiliated Business Arrangement (AfBA) Disclosure is required under RESPA when:

Accepted Answer

A settlement service provider refers the borrower to a company in which it has an ownership interest

Answer

RESPA Section 8 requires disclosure and the borrower's right to choose alternatives when a provider refers business to an affiliated company.

(NSA) Notary Signing Agent Certification Practice Test

(NSA) Notary Signing Agent Certification Practice Test

NSA Key Mortgage Closing Documents 5