Mortgage Mortgage Loan Origination Activities Questions and Answers 2

Question 1

Under TRID rules, when must a Loan Estimate be provided to the borrower after receiving a mortgage application?

Accepted Answer

Within 3 business days

Answer

TRID requires lenders to provide a Loan Estimate within 3 business days of receiving a completed loan application.

Question 2

Which of the following triggers the obligation to provide a Loan Estimate under the six-piece application rule?

Accepted Answer

Receiving the borrower's Social Security number as the sixth data point

Answer

The Loan Estimate must be issued once all six required data points are collected, and the SSN is commonly the final piece triggering this obligation.

Question 3

A mortgage loan originator is compensated based on the loan amount rather than the interest rate. Which regulation primarily governs this compensation structure?

Accepted Answer

Loan Originator Compensation Rule under Regulation Z

Answer

The Loan Originator Compensation Rule under Regulation Z prohibits compensation based on loan terms but permits compensation based on loan amount.

Question 4

During the origination process, the borrower's debt-to-income ratio is calculated. Which debts are typically included in the back-end DTI ratio?

Accepted Answer

All recurring monthly obligations including the proposed housing payment

Answer

The back-end DTI ratio includes all recurring monthly debt obligations plus the proposed total housing payment.

Question 5

A borrower requests a rate lock during the origination process. What happens if the loan does not close before the lock expiration date?

Accepted Answer

The borrower may need to accept the current market rate or pay for a lock extension

Answer

If a rate lock expires before closing, the borrower typically must either accept current market rates or pay a fee to extend the lock period.

Mortgage Practice Test

Mortgage Practice Test

Mortgage Mortgage Loan Origination Activities Questions and Answers 2