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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
○ Escrow administration
○ Asset Management
○ Accounting
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: