A borrower has $50,000 in a joint account with their spouse who is not on the mortgage application. What documentation is typically required to use these funds?
Correct Answer
A) A letter from the non-applicant spouse authorizing use of the funds
When funds are in a joint account with a non-applicant, the lender typically requires written authorization from the non-applicant spouse confirming their consent to use the funds for the mortgage transaction. This protects the lender from potential disputes over ownership of the funds.
Why This Is the Correct Answer
When funds are in a joint account with a non-applicant, the lender typically requires written authorization from the non-applicant spouse confirming their consent to use the funds for the mortgage transaction. This protects the lender from potential disputes over ownership of the funds.
More Origination Questions
For a construction-to-permanent loan, when must the initial Closing Disclosure be provided for the construction phase?
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:
A borrower requests that all loan communications be sent only to their workplace address because they are in the process of divorce and don't want their spouse to see mortgage-related documents. How should the MLO handle this request?
A borrower wants to compare an adjustable-rate mortgage (ARM) to a fixed-rate mortgage. What is the MOST important disclosure the MLO must provide about the ARM?
An MLO provides pre-qualification based on a borrower's current employment but learns the borrower is starting a new job next month with a $10,000 salary increase. How should this information be handled?
An MLO issues a pre-approval letter that states 'subject to satisfactory appraisal and final underwriting approval.' The borrower uses this letter to make an offer, but the appraisal comes in $15,000 below the purchase price. What is the lender's obligation?
A borrower's bank statement shows monthly service fees of $25 and overdraft fees totaling $150 over two months. How should the MLO address this in the loan evaluation?
How long is a typical pre-approval letter valid?
During the application process, an MLO realizes that a borrower would qualify for a government program with better terms, but the MLO's company doesn't offer that program type. What does good faith require?
An MLO issues a pre-approval letter valid for 90 days. On day 85, the borrower's credit score drops 40 points due to a new credit inquiry and increased credit utilization. What should the MLO do?
People Also Study
Federal Mortgage-Related Laws
23% of exam
General Mortgage Knowledge
23% of exam
Ethics, Fraud & Consumer Protection
17% of exam
Uniform State Test Content
12% of exam
Related Study Resources
Previous Question
What is the minimum credit score typically required for a borrower to qualify for an FHA loan with the standard 3.5% down payment?
Next Question
An MLO is processing a refinance for a borrower who currently has an interest-only loan. The new loan will be a fully amortizing loan with a higher monthly payment but lower interest rate. Which factor is MOST important for establishing tangible net benefit?