Course 8: Lesson 2: Loan Documentation
How many years of residency must be verified?
ANSWER: 2
How many months of asset account statements must be provided?
ANSWER: 2 months
What percentage of income requires a commissioned borrower to provide tax returns?
ANSWER: 25%
What does the borrower need for a Loan Application? Match each category with the correct list of items below:
ANSWER: Basic information => Sales contracts and all addenda, check for the app fee, residence for past 2 years, SS#'s ANSWER: Income => Name/Address of Employer, paystubs or payroll stmts covering last 30 day period, 2years W2's ANSWER: Assets => Most recent statements covering a 2 month period, gift letter, HUD settlement statement ANSWER: Liabilities => Letter of explanation regarding delinquencies, copy of divorce decree, proof of re-established credit
A borrower must always disclose income from alimony or child support in order to qualify for the loan.
ANSWER: False
Three years of employment must be verified.
ANSWER: False
When using gift funds as down payment, it is acceptable for the borrower to be required to repay the gift.
ANSWER: False
When a borrower has delinquent credit, what must they provide?
ANSWER: Letter of explanation
Social Security income may be grossed up.
ANSWER: True
Tax Returns are required from self-employed borrowers that have more than 25% percentage ownership in a company.
ANSWER: True
The USA Patriot Act requires that all financial institutions implement procedures to obtain, verify and record information that identifies each applicant who opens an account.
ANSWER: True
There are four categories of documentation that are needed from the borrower at time of loan application: basic, income, assets, liabilities.
ANSWER: True
When a borrower does not have any reported credit it is acceptable to provide 12 months canceled checks from non-traditional sources such as rent, utilities, insurance.
ANSWER: True
Which of the items listed below are considered Primary ID documentation based on the USA Patriot Act?
ANSWER: Valid government issued permanent driver's license, US passport, Military ID, resident alien card (Green card)
