During a refinance closing, the borrower notices that the settlement agent has not collected funds for the previous month's property taxes that were paid by the current servicer. The borrower asks if this will affect the payoff amount. How should this be handled?
Correct Answer
C) The payoff statement should already include any servicer advances for taxes
The payoff statement from the current servicer should include all advances made by the servicer, including property taxes, insurance, and other escrow items. The settlement agent should not collect additional funds for items already included in the payoff.
Why This Is the Correct Answer
The payoff statement from the current servicer should include all advances made by the servicer, including property taxes, insurance, and other escrow items. The settlement agent should not collect additional funds for items already included in the payoff.
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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