A borrower's credit report shows a collection account that was paid in full 18 months ago but still appears as 'unpaid' on the report. What is the most appropriate processing action?
Correct Answer
D) Require a rapid rescore to correct the reporting error
A rapid rescore is the most efficient way to correct credit reporting errors during the loan process. This allows the corrected information to be reflected in the credit score and underwriting decision without delaying the loan for the standard dispute process, which can take 30+ days.
Why This Is the Correct Answer
A rapid rescore is the most efficient way to correct credit reporting errors during the loan process. This allows the corrected information to be reflected in the credit score and underwriting decision without delaying the loan for the standard dispute process, which can take 30+ days.
More Mortgage Knowledge Questions
A borrower is comparing two loan offers: Loan A has no points and 4.5% interest rate, Loan B has 2 points and 4.0% interest rate. The loan amount is $400,000. How much will the borrower pay upfront for the points on Loan B?
A lender charges a 1% origination fee on all loans. For a borrower obtaining a $250,000 mortgage, what is the maximum origination fee that can be charged without violating the points and fees test under the ATR/QM rule for a first-lien mortgage?
Under what circumstances can a Qualified Mortgage include a prepayment penalty?
A borrower is considering paying discount points to reduce their interest rate. Each point costs 1% of the loan amount and reduces the rate by 0.25%. On a $300,000 loan, how much would the borrower pay for 2 discount points?
A borrower asks about the difference between discount points and origination fees. What is the most accurate explanation?
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A borrower in San Francisco wants to purchase a single-family home for $1,200,000 with a 20% down payment. The 2024 conforming loan limit for high-cost areas is $1,149,825. What type of loan will this borrower need?
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A reverse mortgage borrower dies, and their non-borrowing spouse who is under 62 continues to live in the home. What is the most likely outcome?