SAFE Mortgage Loan Origination Processes 3

Question 1

What does the acronym TRID stand for in the mortgage origination context?

Accepted Answer

TILA-RESPA Integrated Disclosure

Answer

TRID stands for TILA-RESPA Integrated Disclosure, the CFPB rule that combined Truth in Lending Act and RESPA disclosures into the Loan Estimate and Closing Disclosure.

Question 2

An underwriter issues a 'conditional approval' on a loan. What does this mean?

Accepted Answer

The loan is approved subject to the borrower satisfying specific conditions

Answer

A conditional approval means the underwriter approves the loan provided the borrower meets stated conditions, such as providing additional documentation.

Question 3

Which of the following is a 'trigger term' under Regulation Z that requires full credit cost disclosures in advertising?

Accepted Answer

'5% down payment required'

Answer

Stating a down payment amount (such as '5% down') is a trigger term under Regulation Z that requires additional credit disclosures in the advertisement.

Question 4

What is the main function of an automated underwriting system (AUS) like Fannie Mae's Desktop Underwriter?

Accepted Answer

To provide an automated risk assessment and eligibility recommendation

Answer

AUS platforms like Desktop Underwriter analyze loan application data and provide an automated eligibility recommendation (Approve/Eligible, Refer, etc.) to guide underwriting decisions.

Question 5

A borrower wants to know the difference between a mortgage broker and a mortgage banker. Which statement is accurate?

Accepted Answer

A mortgage banker originates and typically funds loans with its own capital

Answer

A mortgage banker originates and typically funds loans using its own capital or warehouse lines of credit, then may sell them on the secondary market.

(SAFE) Certified Secure and Fair Enforcement Mortgage Loan Originator Practice Test

(SAFE) Certified Secure and Fair Enforcement Mortgage Loan Originator Practice Test

SAFE Mortgage Loan Origination Processes 3