Automated Underwriting basics

A loan file in which the borrower only has two credit lines may not be run through LPA. True False

false

Credit data is valid for ____ days from the date of the in-file credit report. 90 120 180 240

120

If verified income is less than the income submitted to DU, and the verified income results in a DTI ratio greater than 45%, the loan must be resubmitted to DU. If the verified income results in a DTI ratio less than 45%, but is increased by ____% or more, the loan must be resubmitted to DU. 4 1 2 3

3

A loan that receives an Out of Scope recommendation through DU should be handled in which of the following ways? Underwritten manually Declined Re-submitted to DU Sold to a different agency

A

Select all that apply. Accurately identifying property type in DU is crucial to doing which of the following? Analyzing the overall level of risk Completing the appraisal Determining the level of property fieldwork Ensuring an accurate property title

A and C

4 AUS recommendations

Approve/Eligible Approve/Ineligible- does not meet eligibility Refer with Caution- risky Out of Scope

Accept Plus, Accept Streamlined, and Standard Accept and Caution Accept, Caution, and Out of Scope Accept, Refer, and Refer with Caution

B

MISMO is: A lenders-only group A not-for-profit subsidiary of the Mortgage Bankers Association (MBA) created in 1999 Mortgage Insurance Supplemental Monetary Organization Part of a joint venture between Fannie Mae and Freddie Mac to regulate mortgage technology

B

What is itemized in the Observations portion of the DU Findings Report? Details of transaction/appraisal Appraisal/value details Credit scores/income/assets Employment and asset verification

C

Where can the documentation level required by LPA be found? Findings Report Feedback Message LPA Feedback Certificate

C

Bonus and Overtime Income

DU requires Completed Verification of Employment (Form 1005) Verbal verification of employment (verbal VOE) within 10 business days prior to the note date Paystub and W-2s covering most recent two-year period

Certain government and non-conforming loans that are ineligible for sale to either Fannie Mae or Freddie Mac can also be evaluated by DU and LPA. True false

True

Loan data may be entered into DU using the Quick 1003. True False

True

Select all that apply. Fannie Mae's Desktop Underwriter (DU) provides an underwriting findings report that can include which of the following recommendations? Out of Scope Remedy Refer Approve

a c d

Select all that apply. The benefits of using automated underwriting systems (AUS) include: Analysis is typically inconsistent. Requirements for income/employment and asset documentation are returned based upon risk. More borrowers are approved without increasing risk. Loans can be underwritten faster and more accurately.

b c d

Select all that apply. The following entities have adopted the MISMO common data standards: All mortgage bankers and mortgage brokers Most major investors Freddie Mac Fannie Mae

b c d

For Fannie Mae loans on primary residences, collections and/or charge-offs are NOT required to be satisfied IF: The balance on the account is less than $250, up to an aggregate of $2,000 on all accounts. The balance is less than $8,000. The balance is less than $250, regardless of the aggregate amount of all the accounts. The property is a one-unit AND the account does not threaten Fannie Mae's lien position.

not A 2.3a

Data validation should take place at the time of initial submission to AUS and every time additional documentation is introduced into the loan file. True false

true

For Loan Product Advisor mortgages, the Minimum Assessment Feedback appearing on the Feedback Certificate indicates the minimum level of report and inspection necessary. True False

true

The computer language XML has made it possible to integrate data between sources, e.g., enabling LOS and credit reporters to exchange data. True False

true