AUP Exam 1

Deed for Lease & Short Sale & Deed-in-lieu

Select three: Which of the following loss mitigation options results in the borrower relinquishing ownership of the property?

▪        Why has my escrow payment changed?

▪         What will the new interest payment be on my ARM loan?

▪         Which investor owns my loan?

Select three. Which of these situations can be routinely managed by the customer service team?

Assumptions

Which of the loan servicing functions works to transfer the obligation for a mortgage or deed of trust from one borrower to another?

Year

An escrow analysis is performed, at a minimum, once every:

Escrow Administration

Handling damage claim loss drafts would be a function of which area of loan servicing?

o   Insurer or guarantor guidelines

o   Regulatory requirements

o   Investor requirements

Select three. The quality control programs, initially suggested by the FHA and VA as well as secondary market investor agencies, have expanded to test performance and compliance with:

The loan servicing manager

Performance ratios, the number of loans serviced per employee, and the profit/loss of the division are primarily the accountability of:

Investor accounting, remitting, and reporting

If you routinely interact with the Servicing Gateway application or Connect, which of the following teams are you likely a member of?

The borrower relinquishes the home

Which of the following describes the disposition loss mitigation option?

A payment received from a borrower

When discussing a lockbox, what might a servicing associate be referring to?

Title Search

The _____________ is an examination of public records, laws, and court decisions to ensure that no one except the seller has a valid claim to the property.

Balloon Rider

A rider to a mortgage agreement that affirms the borrower's understanding that there will be a large final payment due at a specified date is the:

Closing Disclosure

What is the disclosure that enables consumers to see a breakdown of all financial details of a settlement, including escrows?

Loan Estimate

The loan's interest rate, APR, and total interest percentage (TIP) can be found on what document in the loan file?

Quit Claim

With a __________ deed, the grantor gives or implies no promises, guarantees, warranties, or representations regarding the title being conveyed.

The borrower and the lender

The promissory note is a written contract between:

Create the borrower’s legal obligation to repay the loan

What is the purpose of the promissory note?

Subordination

Which clause type asserts a lower lien position for a mortgage that may otherwise assert a higher or first lien position?

Acceleration

Which mortgage clause allows the mortgagee to declare the entire loan balance immediately due and payable in the event of default?

Private Mortgage Insurance

What is the type of insurance policy that protects lenders against borrower default on conventional loans?

o   Deterioration

o   Damage from insects

o   Faulty maintenance

Select three. Losses from which of the following perils are excluded from coverage under a homeowner policy?

o   Flood

o   Earthquake

o   Hail

Select three. Homeowner insurance policies generally include certain basic coverage but exclude some natural disasters. In such cases, special coverage policies are required to protect against these perils. Which perils would likely need special coverage?

Deed of Trust

A security instrument that involves a third party is a:

o   The dwelling securing the loan is located within a Special Flood Hazard Area (SFHA)

o   The property is located in a community that participates in the flood program

Select two. Flood insurance is required by law when these two conditions apply:

Court proceeding without a trustee

When the security instrument is a mortgage, foreclosure generally requires a:

Special Warranty

In most __________ deeds, the grantor warrants or guarantees the title only against defects arising during the period of his or her tenure and ownership of the property and not against defects existing before that time.

Condominium Rider

A rider to a mortgage agreement that acknowledges that property insurance for the exterior walls will be held in the name of a homeowner's association rather than in the name of the property owner is the:

o   A one-four family dwelling

o   Detached garages

o   A building in the course of construction

Select three. Coverage A flood insurance covers which of the following?

22%

If private mortgage insurance is required on a conventional loan, it generally must be cancelled when the LTV ratio is paid down to a stated level and the borrower's equity in the property reaches what percent?

Title Insurance Binder

What document is reviewed, prior to closing, to validate the lender's lien position?

Monthly servicing fees

What is the primary source of revenue for mortgage servicers?

Those over age 62

A reverse mortgage is a special type of home equity loan for which category of homeowners?

Adjustable-Rate Mortgage

A loan with an interest rate that increases or decreases based on market conditions—and therefore requires special servicing efforts throughout the life of the loan—is a(n):

Fannie Mae or Freddie Mac

For most conforming loans, servicers must follow servicing guidelines set by:

○        Escrow administration

○        Asset Management

○        Accounting

Select three. Which of the following are functional areas of loan servicing?

Real Estate Settlement Procedures Act

What law protects a consumer when the servicing rights of the mortgage loan is sold or transferred?

Private Mortgage insurers

Which of the following entities offset the lender/investor's risk due to borrower default on conventional loans?

Outsource vendors

The entities that help servicers be more cost effective and efficient in the performance of specialized loan servicing functions are:

Making sure borrower payments are received and posted promptly

One of the four goals of loan servicing is to maximize income. One way servicers do this is by:

Fair Credit Reporting Act

What law requires servicers to provide accurate information to consumer reporting agencies?

○        Specializing in servicing loan types that are most profitable

○        Reducing runoff

○        Judiciously buying and selling servicing rights

Select three. Loan administrators maximize the value of the servicing portfolio by:

remain in compliance with all of the terms of the servicing agreement

● A servicer's primary obligation is to:

Loss mitigation

When a borrower can no longer afford their mortgage payments they should immediately be routed to the __________ department to avoid foreclosure.

The government agency that is insuring/guaranteeing the loan

For government loans, servicers must follow servicing guidelines set by:

servicing

In years when interest rates are increasing and volumes are down, a mortgage banker’s revenues are offset by:

Mortgage insurer

Which of the following players in the mortgage industry protects the lender against loss due to default by the borrower?

Government agencies

Which of the following players in the mortgage industry provide loan programs that insure or guarantee the lender against losses due to borrower default?

Warehousing

Which component of the mortgage lending process involves short-term borrowing of funds by the mortgage lender to finance loans at closing?

Secondary Marketing

Which component of the mortgage lending process involves the securitization and sale of closed mortgage loans to investors?

○        Mortgage bankers

○        Wholesalers

Select two. Which of the following types of mortgage specialists are usually involved in servicing the loan?

Wholesaler/aggregator

First American United specializes in the purchase and servicing of loans obtained from other origination entities. First American United can best be described as a:

Servicing

____________ is frequently where the bulk of a mortgage banker’s net income is produced

Servicing

In years when interest rates are increasing and volumes are down, a mortgage banker’s revenues are offset by:

Lender, investor

With mortgage-backed bonds, the _______ owns the mortgage notes, while the _________ owns the bonds secured by the mortgage note

less

Mortgage-backed securities (MBS) typically require ______ paperwork than whole loans or participations

Mortgage loans and their servicing rights being sold individually or in bulk

Which of the following describes whole loan sales?

i.      Liquidity Coverage

ii.      Mortgage servicing rights (MSRs)

iii.      Net stable funding ratio

Select three. The Final Basel III Regulatory Capital and Market Risk Rule (final rule) has regulatory impacts related to which of the following?

 i. Evaluate and assess which competing markets offer the most favorable terms of execution for a transaction

 ii. Take advantage of the market using hedge fluctuations or instruments that are flexible

Select two. Which of the following are considered appropriate approaches for a secondary marketing team to employ in order to manage risk?

Mandatory

Which represents the best coverage for a pipeline worth $40 to $50 million that avoids constant negotiation and allows continuous loan delivery at the best price/execution?

Private-issue MBS

Which securities have a security rating?

i.      Product and pricing engines

ii.      Shipping and delivery systems

iii.      Hedging systems

Select three. Secondary marketing business applications include which of the following?

 i.      MISMO members are leading the real estate finance industry into the digital future with standards and supporting products

 ii.      MISMO defines reporting and data exchange requirements

 iii.      MISMO developed a common language for exchange information for the mortgage finance industry

Select three. Which of the following statements are true of MISMO?

The outstanding mortgage pool principal divided by the original pool principal balance

In secondary marketing, pool factor refers to which of the following?

Regulation AB

Which regulation addresses the registration, disclosure, and reporting requirements for asset-backed securities?

REMICs

These are mortgage-derivative securities that redirect the payment of principal and interest stemming from the collateral pool to different sub securities with varying prepaying risk protection, maturities, yields

Secondary market

What is the financial market in which loans are bought and sold referred to as?

Preparing and delivering documents to mortgage investors as quickly as possible to avoid interest rate risk, to meet commitments, and to release the warehouse line for new lending

Which of the following describes the shipping and delivery function

The difference between the amount advanced and the face amount of a note

What is a haircut in the mortgage world?

i.      Participation loan sales

ii.      Mortgage-backed security (MBS) sales

iii.     Whole loan sales

Select three. Which of the following are methods of secondary market sales

Private conduit

Which entity is considered a type of middleman that will buy mortgages from other lenders to form mortgage pools and issue MBSs?

to communicate pricing and loan programs to the loan origination and production team

Why does a secondary marketing department coordinate with a loan production department

FHA

Which agency did the National Housing Act establish?

 i.      Private mortgage insurance companies

 ii.      Government and federally chartered agencies

 iii.      Private investors

Select three. Which of the following are the major institutions that currently participate in the secondary mortgage market?

The True cost of the loan for which they are applying

The Truth-in-Lending Act requires lenders to inform applicants of:

Float revenue

What is the interest earned on funds held for a period of time prior to having to disburse the funds known as?

Verifying all closing conditions are met and documents comply with federal and state laws

The loan closer is primarily responsible for:

Real Estate Settlement Procedures Act

The law that requires servicers to provide written notice if the borrower’s loan is being transferred to another servicer is:

Loan to the investor

Delivery is the process of packaging and delivering the:

i.      Sending a verification of employment to the applicant’s employer

ii.      Collecting bank statements to verify assets

Select two. Common ways in which processors verify information on a loan application include:

i.      Force-place coverage if the borrower fails to obtain adequate coverage

ii.      Obtain a copy of the policy showing that the lender is named as an added insured

iii.      Ensure that the hazard policy company meets required financial ratings

Select three. Which of the following are responsibilities of the servicer regarding hazard insurance?

Loan applicants want to renegotiate rates or apply with another lender

Fallout risk occurs when interest rates drop and:

Mortgage notes

A warehouse line of credit is usually secured by:

Shipper

Which role delivers the closed loan to the investor?

Regulate large lenders

What is the main role of the CFPB?

Maintain their mortgage payments

Choose the best answer. The underwriter uses the housing-to-income ratio to evaluate the applicant’s ability to:

Responding to borrower questions about an ARM payment adjustment

Which of the following activities would most likely be administered by the loan servicing customer service department?

Purchaser of the loan funds the loan

If a loan is table funded, the:

Loan Production

Origination, processing, underwriting, and closing are stages in which main functional area?

Privacy laws

Which category of mortgage lending laws include the Gramm-Leach Bliley Act, the Telephone Consumer Protection Act, and Regulation N?

i.      Maintaining consistency in internal policies and procedures

 ii.      Adhering to investor guidelines

Select two. Which strategies listed below best help the loan production team achieve the goal of producing investor quality loans?

 i.      Deed-in-lieu

 ii.      Short Sale

Select two. Which of the following are liquidation loss mitigation options that require the borrower to forfeit ownership of the property in return for a full or partial forgiveness of the remaining unpaid debt?

GSE

Which secondary mortgage market participant purchases mortgages, and then typically packages and sells pools of mortgages as mortgage-backed securities to investors?

i.      Detect and minimize production and closing errors

ii.      Detect and minimize mortgage fraud

Select two. Which of the following are the main objectives of quality control program?

Below par discount pricing

A scenario where the investor will pay $98,000 for a $100,000 note describes what kind of pricing:

i.      Leveraging social media

ii.      Developing personal relationships

iii.      Advertising in newspapers and church bulletins

Select three. Loan originators may generate business using the following strategies:

Fallout

Hedging is best suited to mitigate which of the following risks:

30 business days of the request

Servicers are required to respond to a borrower’s qualified written request for information within:

i.      Asking the right questions

ii.      Providing adequate information

iii.      Treating all consumers fairly

Select three. Which strategies listed below best help the loan production team achieve the goal of protecting the consumer

i.      Escrow administration

ii.      Default administration

Select two. Which of the following departments are generally located within the loan servicing department?

i.      Know documentation requirements

ii.      Communicate with all parties with consistency, transparency, and honesty

iii.      Analyze documents to ensure they meet product guidelines

Select three. A successful processor should do which of the following: