An MLO is refinancing a borrower who has a second mortgage. The new first mortgage will have a higher balance to pay off both existing loans. Which analysis is required for tangible net benefit?
Correct Answer
B) Compare the combined payments and terms of both existing loans to the new single loan
When a refinance consolidates multiple mortgages, the tangible net benefit analysis must compare the combined cost and terms of all existing mortgages being paid off to the new single mortgage.
Why This Is the Correct Answer
When a refinance consolidates multiple mortgages, the tangible net benefit analysis must compare the combined cost and terms of all existing mortgages being paid off to the new single mortgage.
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?
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