A borrower calls to inquire about current mortgage rates. The MLO quotes a rate but does not provide a rate lock agreement. How long is this rate quote typically valid?
Correct Answer
C) The quote has no binding commitment period
A rate quote without a formal rate lock agreement is not a binding commitment and has no guaranteed validity period. The lender can change rates at any time until a formal rate lock is executed.
Why This Is the Correct Answer
A rate quote without a formal rate lock agreement is not a binding commitment and has no guaranteed validity period. The lender can change rates at any time until a formal rate lock is executed.
More Origination Questions
A borrower has a construction-to-permanent loan with a 12-month construction phase. At month 10, construction is only 60% complete due to delays. What is the most likely outcome?
For a construction-to-permanent loan, when must the initial Closing Disclosure be provided for the construction phase?
During a refinance transaction, the appraiser determines that significant unpermitted additions were made to the property. The appraiser wants to discuss this with the MLO before finalizing the report. What should the MLO do?
An appraiser discovers that a property has significant foundation issues that were not disclosed. The appraiser reduces the property value by $25,000 and includes detailed comments about the structural problems. The loan officer is upset because this will kill the deal. Under AIR, the loan officer:
An MLO's compensation structure includes higher payments for certain loan products. When is it acceptable to recommend these higher-compensated products?