07 Supporting Documentation - Quiz

Which of the following could be used to document a mortgage not reported on the credit report?

***12 months' cancelled checks Written statement from the applicant A new credit report Copy of applicant's check book showing payments were made every month

Before submitting the 1003 and supporting documents to underwriting, MLOs should do what?

***Clarify inconsistencies Lock the interest rate and document the rate lock Order the home inspections Issue a pre-approval for the contract of sale

MLOs should question borrowers who provide which of the following?

***Conflicting information Computer-generated tax returns Computer-generated pay-stubs Handwritten explanations of employment gaps

What are the supporting documents required for judgments, bankruptcies, and public records for underwriting purposes?

***Court documents Documents prepared by the closing attorney Borrower and co-borrower agreements Documents drawn up by the creditor who is owed the money

Applicants must provide documentation for proof of everything EXCEPT which of the following?

***Date of marriage Source of assets for the down payment Employment status Income amount and stability

What is the primary document used to establish the applicant's identity?

***Driver's license Credit report Federal tax return W-2 forms

Supporting documentation provides independent proof of the applicant's:

***Statements on the loan application Willingness to repay the loan Intent to purchase Honesty and integrity

A purchase is closing on 7/14. The last bank statement covered the period of 5/28 through 6/27. The deposit check cleared on 7/6, and the funds are required to allow for sufficient cash to close. The applicant will need to provide bank statements/transaction activity through (at a minimum) which date?

6/27 6/30 ***7/6 7/14

Documentation of a divorce must come from which of the following?

Applicant and ex-spouse Divorce attorney of the borrower ***Court that granted the divorce Divorce attorney of the co-borrower

MLOs should review all documents prior to submission to underwriting to ensure that the documents:

Are clear and legible Meet program guidelines Are consistent with each other and the 1003 ***All of the above

A VOE must be sent directly to an employer with the applicant's:

Completed 1003 Tax transcripts Credit report ***Authorization to release

VOEs document all of the following EXCEPT which one?

Employee start date Likelihood of continued employment ***Likelihood of being promoted to a higher position Year-to-date wages and the last two years of income

What is/are the primary purpose(s) of a cover letter written by the MLO?

Explain why the borrower doesn't have good credit Identify the real estate agents representing the buyer and seller ***Address strengths and weaknesses in the file and explain gaps in information Document why the borrower is out of work

Which document determines the actual purchase price that the applicant will pay?

Initial offer to purchase Contract after reviewed by appraiser Completed appraisal "subject to" ***Fully-executed sales contract

If a borrower discloses a debt that does not appear on the credit report, the MLO must:

Obtain the most recent document showing the total amount due, terms, and the monthly payment ***Obtain a verification of loan showing the balance, monthly payment, and payment history Ask the borrower for the balance and estimate 2.5% for the monthly payment Do nothing: if it wasn't on the credit report, it doesn't have to be counted

If an underwriter requests a document that cannot be produced, it is okay to do which of the following?

Request that the underwriter deny the file ***Provide a suitable alternative that is available Ask the borrower to withdraw the application Create the document that is specifically being requested

The written VOE form (Fannie Mae 1005) allows the lender to do which of the following?

Segregate the income from salary, bonuses, and overtime Verify the YTD income Verify the probability of continued employment and income ***All of the above

Verifications should be provided by which of the following?

The applicant's spouse Mortgage loan originators ***Disinterested third parties Attorneys and title agents

Which of the following could lead to a condition being added by an underwriter?

The underwriter not liking the borrower The underwriter not approving of the buyer's profession Previous documents that satisfied the condition ***An error on the 1003

What income/employment documentation do self-employed applicants need to provide?

W-2s and verifications of employment Business tax returns only Personal tax returns only ***Business and personal tax returns