CMPS CMPS Credit Analysis and Underwriting Standards Questions and Answers

Question 1

What is the maximum debt-to-income (DTI) ratio typically allowed for a conventional conforming loan under standard Fannie Mae guidelines?

Accepted Answer

50%

Answer

Fannie Mae's Desktop Underwriter (DU) allows DTI ratios up to 50% for conventional loans when compensating factors are present.

Question 2

Which credit score model is most commonly used by mortgage lenders when evaluating a borrower's creditworthiness?

Accepted Answer

FICO Score 2/4/5 (Classic)

Answer

Mortgage lenders use legacy FICO Score versions — FICO 2 (Experian), FICO 4 (TransUnion), and FICO 5 (Equifax) — not the newer FICO Score 8.

Question 3

When a lender uses the 'middle score' rule for a joint mortgage application, which score is selected?

Accepted Answer

The middle of each borrower's three bureau scores, then the lowest of those middles

Answer

Each borrower's middle score is identified from the three bureaus, then the lowest middle score among all borrowers is used for qualification.

Question 4

A borrower has a 30-day late payment on a credit card 14 months ago. Under standard FHA underwriting guidelines, this will most likely:

Accepted Answer

Require a letter of explanation but not disqualify

Answer

A single 30-day late beyond 12 months ago is typically addressed with a letter of explanation and does not automatically disqualify the borrower under FHA guidelines.

Question 5

What does a 'tri-merge' credit report provide that a single-bureau report does not?

Accepted Answer

Trade lines from all three major bureaus combined into one report

Answer

A tri-merge report aggregates trade line data from Equifax, Experian, and TransUnion into one document, giving underwriters a complete credit picture.

(CMPS) Certified Mortgage Planning Specialist Practice Test

(CMPS) Certified Mortgage Planning Specialist Practice Test

CMPS CMPS Credit Analysis and Underwriting Standards Questions and Answers