Mortgage Loan Origination Activities Flashcards

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1

CRA stands for

Credit Reporting Agency

2

Name the 3 CRAs

1. Equifax
2. TransUnion
3. Experian

3

Length of time a chapter 7 bankruptcy shows on credit report

10 years

4

Length of time chapter 13 bankruptcy shows on credit report

7 years

5

Length of time most financial information will show on credit report

7 years

6

Front-End/Housing Expense DTI Ratio Formula

PITIA ÷ Gross Monthly Income

7

PITIA stands for

Principal, Interest, Taxes, Insurance (Hazard, Mortgage, and Flood), Association Dues (HOAs)

8

Back-End/Total DTI Ratio Formula

PITIA + Non-Cancelable Debt ÷ Gross Monthly Income

9

What % of non-taxable income can be used to qualify?

125%

10

What % of rental property income can be used to qualify?

75%

11

Form used to retrieve past tax returns, W-2s and 1099 transcripts?

4506-T

12

Income frequency types (4)

1. Annual
2. Semi-monthly
3. Bi-weekly
4. Hourly

13

# of pay periods annually for a semi-monthly paid employee

24

14

# of pay periods annually for a bi-weekly paid employee

26

15

LTV Formula

1st mortgage loan amount ÷ Value of property (appraised value or purchase price, whichever is less)

16

CLTV Formula

1st Loan Amount + 2nd Loan Amount ÷ Value of property (appraised value or purchase price, whichever is less)

17

TLTV/HLTV Formula

1st Loan Amount + 2nd Loan Limit ÷ Value of property (appraised value or purchase price, whichever is less)

18

AMC stands for

Appraisal Management Company

19

Appraisal Approaches (3)

1. Cost Approach
2. Sales Comparison Approach (market approach)
3. Income Approach

20

# of years sales must be considered for comparable properties with market approach

1

21

Minimum # of comparables needed for residential mortgage appraisal

3

22

# of years sales must be considered for subject property with market approach

3

23

Cost approach is used for appraisals of _____

New construction

24

Sales comparison/market approach is used for appraisals of _____

Residential property (most common approach)

25

Income approach is used for appraisals of _____

Commercial real estate or income producing properties

26

Summary of forced placed insurance

[more expensive] Insurance placed by lender when borrower lapses

27

Notices required by lender before they can initiate forced placed insurance

• Borrower must be notified 45 days prior to initiating insurance
• Lender must send 2 notices with no response

28

Types of flood zones (2) that require flood insurance

A & V

29

Maximum flood insurance coverage $

$250,000

30

Two types of encumbrances

1. Financial
2. Physical

31

2 types of financial encumbrances

1. Voluntary (HEL, HELOC, Piggy Backs)
2. Involuntary (tax, mechanics lien)

32

3 types of physical encumbrances

1. Easement(legal)
2. Encroachment(illegal)
3. Public or private restriction

33

# of days per month when calculating per diem interest

30

34

# of days in a year when calculating per diem interest

360

35

The most common appraisal form

1004/URAR