An MLO discovers that a borrower's credit score dropped significantly after loan approval but before closing. The borrower had qualified for standard PMI rates. What is the most appropriate action regarding PMI?
Correct Answer
C) Re-verify PMI eligibility and rates based on current credit score
PMI eligibility and pricing are based on current borrower qualifications at the time of closing. If credit scores change significantly, the MLO should re-verify PMI terms with the insurer, as the borrower may face higher PMI rates or potentially be denied coverage, which would affect loan approval.
Why This Is the Correct Answer
PMI eligibility and pricing are based on current borrower qualifications at the time of closing. If credit scores change significantly, the MLO should re-verify PMI terms with the insurer, as the borrower may face higher PMI rates or potentially be denied coverage, which would affect loan approval.
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A borrower has identical credit scores across all three bureaus, but different mortgage lenders are quoting different rates based on credit. What is the most likely explanation?