What is the difference between a mortgage broker and a mortgage loan originator? This 4-hour course covers Oregon specific rules and . B. The lender can use the following type of documentation to verify that a borrower has sufficient funds for closing, down payment, and/or financial reserves: Almost all loan products require the use of an appraisal, as it is the basis for the amount the borrower can borrow under the program they are using. If a rental income is derived from the subject property, the property must be one of the following: Social Security and/or disability income that may be applied toward a loan analysis or as qualifying income, Social Security income: you can gross it up by 25% if it was taxed before the borrower received it, Documentation of work history and income when there has been a gap in employment, As long as borrowers can show six months of the full time of continuous employment history and can get a verification of employment from the employer that the likelihood of continuous full-time employment is promising, borrowers will qualify for a mortgage loan. Real Estate Settlement Procedures Act (RESPA), 12 CFR Part 1024 (Regulation X) 1. - Hazard Insurance requirements, Protects borrower and lender from flaws on title, 1st mortgage and second mortgage and IRS Tax Lien and judgement, Insurance that protects the borrower and the lender, C. 1. b. “The obvious place to start is the financial crisis and the clearest guide to it that I’ve read is Financial Shock by Mark Zandi. ... it is an impressively lucid guide to the big issues.” – The New York Times “In Financial Shock, ... Percentage of bank account assets attributable toward a loan application. 4. c. i. -- Uses the stress-adaptation model as its conceptual framework -- The latest classification of psychiatric disorders in DSM IV -- Access to 50 psychotropic drugs with client teaching guidelines on our website -- Each chapter based on DSM ... B. Visit the NMLS Resource Center for information on how to review your education record. All income for Fannie, Freddie, FHA, USDA, and VA loans must be verified with at least two month's W-2's, 1099's, the most recent pay stub and tax returns with a 4506T verifying the validity of the tax returns with what the IRS has. It is their opinion. - Debt ratio calculation scenarios, D. 5. b. 5. c. v. - Valid reasons for a Changed Circumstance. The AMC (a neutral third party) will then communicate with the appraiser about the appraisal request. Bonus was $4,000 two years ago and $10,000 last year, you use $7,000. c) Collecting information on behalf of the consumer. The underwriter is required to verify the income is nontaxable, examples of verification documents include awards letters, policy agreements, or account statements. Mortgage Disclosure Improvement Act (MDIA) 2008. Business day counts saturday even if the business isn't open. 3 Business days from when you (the lender or LO) disclose that there is a conflict of interest. - Borrower/Seller's ability to review the Closing Disclosure, C. 2. b. Washington State Mortgage Loan Originators are regulated by the Division of Consumer Services . 4. b. ii. This section asks about the loan's purpose and the property they want to purchase or refinance. Debt to Income is a calculation made to determine whether the borrower can repay the loan they are attempting to receive. Generally, a 1% discount point will buy the interest rate down .25-.50% depending on the investor. Examples of these records include W-2's, 1099's, tax returns or payroll statements), Determining a borrower's ability to repay. When a property is in a flood zone, most lenders are going to require that that borrower obtain flood insurance. - Methods of verifying assets, A. 5. c. ii. Required documents when using a property as collateral, Mortgage / Security Instrument / Deed of Trust. What is the difference between a mortgage broker and a mortgage loan originator? The borrower has ___ days after he receives the LE, to respond to the lender and indicate whether he wants to continue with the loan application or cancel his application. A lender can make corrections to the CD in certain situations. To calculate the LTV, take the loan amount and divide it by the purchase price. 1. e. i. For example, they must be certified to be able to do an FHA appraisal or a VA appraisal. MLO - Completely confidential except internal people. Changes to one or more of the terms of a loan. a) When applicants are entitled to advance inspection of a Closing - 3 business days before closing, The initial closing disclosure must be delivered 3 business days before closing, A. Discount points are the cost to lower the borrower's interest rate in exchange for an upfront fee. 1. e. iv. 1. e. ii. The Uniform Residential Appraisal Repor…. Learn vocabulary, terms, and more with flashcards, games, and other study tools. The fee is compensation for executing the loan. Overtime with two years history and you have a good idea that they're going to be receiving it in the future is the same calculation using time and a half, B. They are intended to enhance property values by controlling development. - Homeownership Counseling Disclosure - 10 counselors, B. 4. a. iii. A. Each credit report will have a high, middle, and low score. An impartial person who estimates the value of something such as real estate. - Factors taken into consideration when reviewing an, Is that money going to continue in the future, B. Changed Circumstances: they are the only way that if a fee exceeds a tolerance an LE can be revised. The final Loan Estimate is required to be received by the borrower no less than four (4) business days before closing. A licensed loan originator processing files for more than one mortgage broker can process the loan files at each mortgage broker's main or branch office, moving from company to company. The ATR Rule has eight (8) underwriting factors that lenders must consider and verify. Loan term [skip to next word listed in the glossary] See: Term. A. The servicer must use an escrow disbursement date that is on or before the deadline to avoid a penalty and may make annual lump sum payments to take advantage of a discount. Generally, if a mortgage loan originator organization employs an individual loan originator who is not licensed and is not required to be licensed, Regulation Z requires the loan originator organization to perform specific screening of that individual before permitting the individual to act as a loan originator and to provide certain ongoing . The writers and disclosures explaining an: C. 4. e. - Providing the escrow analysis statement. A. - Service charges subject to a 10% tolerance, A. According to TRID, a consumer is permitted to shop for a service if the creditor permits the consumer to select the third-party service provider. More ›. Fraud for profit focuses on misusing the mortgage lending process to get cash and equity from lenders or homeowners. Loans are made by determining the right option for the potential homebuyer's budget and needs. 1. c. v. d)Bonuses - two year history and the company has to indicate if it will continue. If the application is withdrawn within the first 3 days, or the lender denied the application within the first 3 days, the LE (initial disclosures) are NOT required. - Reflecting the type of loan on a mortgage application, A. Programs require that borrowers put a specific amount down or have a specific amount of equity in their property to obtain a loan. Interest rate adjustment calculation scenarios. Assets are divided into two types, liquid assets used for down payment and closing costs and long-term assets that can be used to cover the two months payments required for reserves. Thankfully, this edition adds ideas for handling each of these situations using the same time-tested principles that have helped Active Training remain as the preeminent teaching methodology for decades. The title report is a generated report that shows the chain of title. The ARM has 2/2/8 interest rate caps. The Back-End Debt to Income Ratio/ Total Expense Ratio is all of the borrower's liabilities compared to their income. There are many different types of income that a borrower can use to qualify for a mortgage. Until the rescission period has expired and the creditor is reasonably satisfied that the consumer has not rescinded, the creditor must not, either directly or through a third party: A periodic interest rate is the interest rate charged on a loan over a specific period. D. 8. a. In Liquidated, Karen Ho punctures the aura of the abstract, all-powerful market to show how financial markets, and particularly booms and busts, are constructed. What is the interest rate at the first adjustment? The index, margin, and adjustment caps on the ARM determine the amount of each adjustment. RESPA origins and purpose; definition of "mortgage broker" 2. The dynamic environment of investment banks, hedge funds, and private equity firms comes to life in David Stowell’s introduction to the ways they challenge and sustain each other. You are required to use an Appraisal Management Company (AMC) to order your appraisal. Qualified Mortgage monthly payment calculations, Monthly mortgage payment for this loan - You calculate this using the introductory or fully-indexed rate, whichever is higher, and monthly, fully-amortizing payments that are substantially equal. Generally speaking, a mortgage broker is a company that employs mortgage loan officers. - How MLOs manage information on an application. If the bonuses are going down, you have to use the lower number. MLO, NOT loan processor). If it is in a flood zone, the form will indicate that flood insurance is required. You can ask anything you need to get the loan approved or denied. 1. c. v. a)Hourly - Hourly wage times no. C. Closing. The CLTV is the total of the first mortgage and the amount drawn from the HELOC or the total second mortgage by the lessor of the appraisal value or the purchase price. There are many types of insurances associated with mortgage loans, title insurance, and private mortgage insurance, monthly and upfront mortgage insurance, hazard insurance and flood insurance. What a creditor cannot do is limit the third-party service provider choice to a list selected by the creditor - this would not be allowing the borrower to shop. NMLS / MLO 20 Hour S.A.F.E Comprehensive Mortgage Loan Originator Course Test candidates will enjoy our live 20 Hour S.A.F.E. The benefit is for the borrower to borrow over 80% and the benefit for the lender is to give them partial protection if the borrower defaults on the loan. (Actions Taken= Declined or approved see ECOA), A. This book examines the economic, psychological, sociological, historical, and legal traditions behind the demand, supply, institutions, and regulation of consumer credit in today's marketplace and how and why they have evolved. 5. c. iv: - Issuing a list of third party vendors - Preferred Providers, 3 Business of receiving "signed application", A. Reflecting the type of loan on a mortgage application. As the title suggests, this book explains why the current monetary system is broken, and explains exactly how it can be fixed. An appraisal is an evaluation of the borrower's home (or soon-to-be home). b) Preparing loan packages. Loan Inquiry and Application Process Requirements. The underwriter is going to analyze the borrower's profile while the processor collects verifications and documentation to help the underwriter do a thorough analysis of the borrower. Three Credit Agencies: Experian, TransUnion, Equifax. 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