NSA Loan Documents and Procedures 2

Question 1

The Promissory Note in a loan package is primarily a borrower's promise to do what?

Accepted Answer

Repay the loan according to stated terms

Answer

Maintain homeowner's insurance

Answer

Keep the property in good condition

Answer

Pay property taxes on time

Question 2

Which document in a loan package conveys a security interest in the property to the lender?

Accepted Answer

Deed of Trust or Mortgage

Answer

Promissory Note

Answer

Truth in Lending disclosure

Answer

Closing Disclosure

Question 3

In a Deed of Trust state, who holds legal title to the property during the loan term?

Accepted Answer

The trustee

Answer

The borrower

Answer

The lender

Answer

The title company

Question 4

What is the purpose of the Right of Rescission notice provided at closing for a refinance?

Accepted Answer

It gives the borrower 3 business days to cancel the transaction

Answer

It allows the lender to cancel the loan within 3 days

Answer

It notifies the title company of the closing date

Answer

It discloses the loan's APR to the borrower

Question 5

How many copies of the Notice of Right to Cancel must the NSA typically provide to each borrower at a refinance closing?

Accepted Answer

Two copies per borrower

Answer

One copy per loan package

Answer

One copy per transaction

Answer

Three copies per household

Question 6

The Initial Escrow Statement discloses what information to the borrower?

Accepted Answer

Projected escrow payments for taxes and insurance in the first year

Answer

The lender's servicing transfer rights

Answer

The borrower's credit score used for underwriting

Answer

The title insurance premium breakdown

Question 7

When a borrower initials each page of the Promissory Note, what is the primary purpose?

Accepted Answer

To verify no pages were added or removed after signing

Answer

To confirm they understand the APR

Answer

To acknowledge they received a copy

Answer

To waive their right of rescission