A borrower is purchasing a condominium in a building that is not on the approved condo list for conventional financing. What PMI consideration applies to this scenario?
Correct Answer
B) PMI companies may decline coverage for non-warrantable condos
PMI companies have their own approval requirements for condominium projects. Non-warrantable condos (those not meeting GSE guidelines) may be declined for PMI coverage or face significantly higher rates, as they're considered higher risk. This can affect the borrower's ability to obtain conventional financing.
Why This Is the Correct Answer
PMI companies have their own approval requirements for condominium projects. Non-warrantable condos (those not meeting GSE guidelines) may be declined for PMI coverage or face significantly higher rates, as they're considered higher risk. This can affect the borrower's ability to obtain conventional financing.
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?
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
Previous Question
Which of the following scenarios would exempt a loan originator from the three-category presentation requirement under anti-steering provisions?
Next Question
An MLO works for a lender that doesn't offer government loans in-house but can broker them through wholesale partners. When presenting loan options to a borrower who qualifies for both conventional and FHA loans, the MLO must: