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what is the formula for computing gross income 1)paid twice per month 2)paid biweekly 3)paid weekly 4)paid hourly gross x 24/12 gross x 26/12 gross x 52/12 hourly pay x 40 hours = week pay
WHAT IS THE RANGE FOR "GROSS UP" FACTORS 15% TO 25% in other word non-taxable income can be multiplied by 115%
HOW IS THE PREPAYMENT PENALTY CALCULATED outstanding principal X penalty rate
HOW DO YOU CALCULATE LTV CLTV HCLTV LOAN AMOUNT / PROPERTY VALUE LOAN AMOUNT1 + LOAN AMOUNT 2/VALUE LOAN AMOUNT 1+HELOC LIMIT/ VALUE
WHAT IS HOUSING RATIO "top ratio" aka "front end ratio" sum of PITI / brwr gross monthly income
HOW IS PIER-DIEM INTEREST CALCULATED principal x interest rate/ 360 days X # of days remaining in the month (includes closing day)
HOW DO YOU CALCULATE SINGLE PREMIUM PLANS? AND MONTHLY PLANS FOR PMI single: loan Amt x mortgage insurance factor monthly: loan amount x mortgage insurance factor /12
how do you calculate -MONTHLY PROPERTY TAX ESCROW PAYMENT -MONTHLY HAZARD INSURANCE annual property tax/12 months annual hazard insurance /12 months
WHAT IS TOTAL DEBT TO INCOME RATIO? how is it CALCULATED? "back end ratio" aka "bottom ratio" Monthly PITI plus (+) other debts divided ( / )by borrower's gross monthly income (all recurring monthly debt/gross monthly income)
WHAT IS THE INCOME APPROACH FOR AN APPRAISAL during the income from the property by a "cap rate" percentage to be appropriate for the subject property
WHAT IS THE DOWN PAYMENT ? HOW IS IT CALCULATED unfinanced portion of the purchase price purchase price = 60000 LTV =75% (450000) 60000 x 75% = loan amount 60000 - 450000= 150000 down payment
WHAT DOESN'T THE DTI RATIO INCLUDE (6) utility payments food bills education expense (other than student loans) childcare expenses (other than child support) medical insurance premiums entertainment expenses
WHAT IS A PERMANENT BUYDOWN achieving a lower interest rate by paying discount points
WHAT ARE SOME SOURCES OF FUND THAT CAN BE VERIFIED IN FILE WHEN BRWR HAVE ASSESTS TO STATISFY DOWNPYMNT TO CLOSE cash in bank (at least two months) sale of current residence (must hv cd) gift funds (gft ltr) sale of other assets (prove owner ship) secured brwr funds (401k)
WHEN WOULDN'T YOU USE PURCHASE PRICE TO CALCULATE LTV/CLTV/HCLTV purchase price does not factor into any REFINANCE transaction where brwr has owned property for greater than 12 months use appraised value
WHO IS RESPONSIBLE FOR THE ACCURACY OF ALL APPRAISAL REPORTS THE LENDER
WHAT HAPPENS IF YOU VIOLATE ABILITY TO REPAY (ATR) PROVISIONS you have provided the consumer with a life to loan defense to foreclosure
WHAT STEPS SHOULD UNDERWRITER TAKE IF AUS SAYS "APPROVED" "REFER" A- UW verifies info on 1003(URLA) submitted to AUS matches R- UW must make manual credit decision on whether applicants risk factor meets FNMA + Freddie UW criteria
WHAT IS THE SALES COMPARISON APPROACH FOR AN APPRAISAL looking at least 3 recent properties sold w/ similar size + design within 1 mile of the subject property aka market data approach
WHAT IS TITLE INSURANCE is a type of insurance coverage that protects against defects in title that weren't listed on a title report
WHAT DISCLOSURES MUST BE GIVEN BY MLO (5) AFBA-affilated bis arrangement -1% ownership (repsa) LE (tila) mortgage loan servicing disclosure (repsa) CFPB home loan toolkit (TILA) list of settlement service providers that brwr can shop for -title etc (TILA) (CALMS)
WHAT DISCLOSURES MUST BE GIVEN BY MLO FOR ARMS LOANS (3) CHARM booklet (tila) arm disclosure (tila) homeownership counseling disclosure (tila)
HOW DO YOU VERIFY INCOME W/ SELF-EMPLOYED BRWR WHATS REQUIRED MLO should obtain tax returns for past 2 years all pages of all schedules of tax return if brwr has ownership interest in a partnership or corporation the business tax returns
WHAT IS AN ENCROACHMENT a structure or portion of a structure that extends over the boundary line of a property onto another parcel
WHAT ARE ORGINIATION FEES a fee or charge for work involved in the evaluation, preparation and submission of a proposed mortgage loan ex: underwriting, processing, preparing
WHAT ARE THE 3 NATIONAL CREDIT BUREAUS AKA Equifax transunion Experian aka consumer reporting agencies
AFTER CLOSING HOW MANY DAYS DOES A BORROWER HAVE TO OCCUPY PROPERTY 60 DAYS
WHAT IS EQUITY STRIPPING A practice where the applicants equity is taken away by a mortgage lender
WHAT IS A TANGIBLE NET BENEFIT brwrs must be receiving some sort of positive outcome for refinancing must be facts about new loan that makes refinance in brwr interest
LONDON INTERBANK OFFERED RATE the rate at which banks can borrow money from other banks in the London market
WHAT DOES A MORTGAGE LOAN ORIGINATOR DO job is to obtain a complete and accurate 1003 supported by documentation from brwr understand brwr goal in financing trans to give best options
IF APR changes by ______ % what must happen 1.4% for a regular loan 1.8% for irregular loan (construction loan etc) then new closing disclosure issued and add 3 bus-day wait
IF BRWR HAS A PRE-FORECLOSURE EVENT HOW LONG IS THE SEASONING PERIOD 4 YRS OR 2 YRS considered extenuating circumstances
WHAT DOES TITLE INSURANCE DO FOR THE LENDERS POLICY it protects the lender from claims that may jeopardize the validity or priority of lien
WHAT IS THE HOME LOAN TOOL KIT CFPB's informational booklet on general info for loan process from application to closing - w/ concentration on fees and charges
IF YOU TRY TO INFLUENCE AN APPRAISERS OPINION OF VALUE ON A GIVEN PROPERTY WHAT ARE YOU IN VIOLATION OF TILA +AIR
WHY IS A TITLE SEARCH PERFORMED to determine any encumbrances or liens affecting title by researching all known recorded document related to current + prior ownership of the property
WHAT IS DEROGATORY CREDIT mean applicant have not paid their obligations on time and have been reported late by creditors -must provide written explanation for each derogatory item
IF BRWR HAS A COMPLETED FORECLOSURE HOW LONG IS SEASONING PERIOD W/ FREDDIE AND FNMA 7 YRS but 3 years if foreclosure is a result of extenuating circumstances 4 yrs for preforeclosures
WHAT IS RECONCILIATION STAGE OF APPRAISAL the process by which an appraiser examines all 3 approaches and bases the property's final estimate of value on intended use of the property
WHAT IS EQUITY the value of the property minus the amount of the outstanding liens
WHAT ARE PREPAYMENT PENALTIES fees brwr must pay if loan principal is repaid in full before loan expiration
WHAT IS YOUR CREDIT SCORE BASED ON based on a statistical analysis of risk due to use of credit, # of open credit acts, # of credit inquires and derogatory credit
WHAT ARE SOME REASONS TO REFINANCE shorten loan term 30 years to 15 years take cash help kids in college lower rate + mortgage payment
WHAT ARE DISCOUNT POINTS are amounts charged by a lender to the brwr or seller in order to increase the lenders effective yield on the loan 1 discount point =1%
BENEFITS /DOWN SIDE OF FINANCING CLOSING COST b- reduces Amt of cash at closing ds- incurs higher total costs b/c those bear interest over life of loan
WHEN IS UNEMPLYMENT INCME ABLE TO BE USED AS QUALIFYING INCME WHATS REQUIRED when applicants wrk is seasonal and unemployment is apart of nature annual work cycle MLO should obtain tax returns from last 2 years
WHAT IS THE COST APPROACH FOR AN APPRAISAL calculate the cost of construction minus any depreciation plus value of land
WHAT IS A CONTINGENT LIABILITY when brwr has co-signed for another persons installment debt but the actual pymnts are being made by primary obligator
WHAT IS VOD AND VOE verification of deposit verification of employment
ONCE A PURCHASE AGREEMENT IS EXECUTED MLO +brwr meet to complete URLA uniform residental loan application "1003"
WHAT ARE THE STEPS TO FUND A MORTGAGE LOAN (5) originating > processing > underwriting > closing > funding mortgage
WHERE DOES THE CLOSING TAKE PLACE either at the title insurance company of at another location w/ a representative of the title insurance company
WHEN IS A FACT CONSIDERED "MATERIAL" if knowledge of the fact would lead a lender to consider a different course of action on the app
IN ORDER FOR A LOAN TO PASS QM TEST WHAT NEEDS TO HAPPEN they must calculate based on the highest payment that will apply in 1st 5 years of the loan that payment must result in debt ratio that is no more than 43%
DEALING W/ TILA WHAT DOCS ARE REQUIRED TO BE GIVEN BY LENDER TO BRWR IN 3 BUS-DAY (5) LE HOME LOAN TOOLKIT HOMEWOWNERSHIP COUNSELING DISCLOSURE ARMS- CHARM BOOKLET ARM DISCLOSURE
A PROPERTY IS REQUIRED TO BE INSURED FOR THE COST TO REBUILD IT FROM SCRATCH OR THE LOAN AMOUNT WHICH EVER IS LESS. WHATS THE EASIEST WAY TO DO THAT obtain extended replacement cost coverage
WHATS IS PITI brwr housing expense payment principal, interest, taxes, insurance, (hard, mortgage, flood) homeowners assoc. fee if applicable primary residence only
IN ORDER FOR INCOME TO COUNT IN BRWR FAVOR LENDERS USUALLY REQUIRE 2 yrs of verifiable incme (esp for OT or bonus) for income w/ expiration date (child support alimony,disability) must be likely to continue for at least 3 years after loan closing
WHAT IS URAR Uniform Residential Appraisal Report form used to appraise single family homes form 1004
WHAT IS AN EASMENT a formal right granted to another party allowing them to access a given property (utility bills)
WHAT IS HVCC & WHAT IS THEIR GOAL home valuation code of conduct assure independence in the valuation process by eliminating coercive & manipulative practices by lenders & brokers trying to influence appraisal reports Prohibits anyone in the sales function from picking appraisers
DEALING W/ RESPA WHAT DOCS ARE REQUIRE TO BE GIVEN BY LENDER TO BRWR IN 3 BUS-DAYS (2) mortgage servicing disclosure affiliated business arrangement disclosure (when applicable)
WHAT IS COFI cost of funds index- avg cost of funds for San Fran, Ca fed home loan bank. this is the interest the bank must pay on its deposits
WHAT IS THE BENCHMARK FOR DISCOUNT POINTS for each discount point brwr interest is reduced by 1/8%
WHAT DOES A LOAN PROCESSOR DO assist MLO by reviewing submitted docs & make sure they're ready for UW Responsible for obtaining verification on documnts brwr provides
WHAT IS PER-DIEM INTEREST the amount if daily interest payable under a loan
WHAT IS A BUS-DAY definition FOR ALL RESPA DISCLOSURES, LE ,CLOSING DISCL. TILA DISCL respa, le & closing- any day that the credior is open for business to carry out substantially all of its business tila - any day except Sundays and federal holidays
WHAT ARE ESCROW PAYMENTS funds used by the lender to pay the property tax bill & hazard insurance premiums aka reserves or impounds
WHAT IS "AIR" & WHAT DID it replace Fannie & Freddie Appraiser Independence Requirement replaced HVCC (home valuation code of conduct)
WHAT DOES AN UNDERWRITER DO should be able to make an initial credit decision then review documentation validating the application info to support decision
WHAT IS THE SEASONING PERIOD FOR BANKRUPTICES depending on type filed and if loan is going to be sold to Freddie or fnma it can be from 2-5 years or 2 years w/ extenuating circumstances
WHAT IS A TITLE REPORT is a document typically prepared by an attorney or title company setting forth the conditions of the title
WHEN IS PMI required when any conventional loan exceeds 80% LTV
EXAMPLE OF TEMP BUY-DOWN 3-2-1 BUYDOWN interest rate reduced by 3% yr1 " 2% yr 2 " 1% yr 3 initial interest rate would return yr 4
AFTER APPLICANT HAS REC THE LOAN ESTIMATE WHEN CAN THE LOAN BE CONSUMMATED 7 BUS-DAY WAITING PERIOD
WHAT IS FORCE PLACE INSURANCE if required insurance is canceled or not obtained a lender can insure the property and force the brwr to pay for it lender must provide brwr a notice 1st
WHAT ARE THE TWO BIGGEST FACTORS LENDERS LOOK FOR IN INCOME (AND EMPLOYMENT) stability consistency
WHEN IS THE BRWR 1ST PYMNT DUE first monthly payment due on the first day of the second month after closing
WHAT ARE COMPENSATING FACTORS positive characteristics about a brwr that might help offset some negative info on brwr application (high credit score for brwr w/ high debt to income ratio)
WHAT ARE LIABILITIES they are considered bills brwr has to pay out of monthly income
WHAT IS THE PURPOSE OF A PROPERTY APPRAISAL to document that the property has sufficient value to support the mortgage debt
HOW MUCH CAN A LENDER COLLECT FOR PROPERTY TAXES IN RESERVE no more than 2 months cushion 1/6 of a yr
WHAT ARE AMCs + WHAT DO THEY DO Appraisal management companies provide appraisal reports serve as a middle man for lenders/ brokers and appraisers due to prohibit contact
HOW DOES LENDER CHOOSE WHICH # TO USE FROM 3 CREDIT BUREAUS if the lender sees 3 scored will choose middle score / lender see 2 scores the lower of the 2 must be used
WHAT ARE THE TWO LARGEST AUS SYSTEM DU- desktop underwriter LP- loan prospector used for conventional conforming loan + many government loans as well
WHAT DOES TITLE INSURANCE DO FOR THE OWNERS POLICY reports on the condition of the title (outstanding liens) protects owner from claims against his/her ownership interest
IF LTV RATIO IS GREATER THAN 80% WHAT DOES LENDER TYPICALLY REQUIRE BRWR TO PAY ON HAZARD INSURANCE 1/12 of the annual hazard insurance premium into escrow monthly as part of monthly PITI
WHAT IS GROSSING UP calculating how much tax the brwr would pay if this income were taxable and then adding that figure to the gross amount received . commonly done when non-taxable income is used to qualify brwr
ATR rules apply to all "consumers -purpose mortgages" except (5) home equity lines of credit reverse mortgages timeshare loans temporary financing loans for business purposes
WHAT ARE THE DELIVERY METHODS IN WHICH A DISCLOSURE CAN BE GIVEN? AND WHEN IS IT DEEMED RECEIVED ? mailed- 3rd bus-day placed in mail email - same as reg mail unless brwr email confirming rec fax- the day after successfully transmitted in person- when presented to brwr
Created by: cortnick1
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