During the final walk-through, the borrower discovers significant water damage that wasn't present during the initial inspection. What should the MLO advise?
Correct Answer
B) Delay closing until the issue is resolved or properly addressed
Material changes to the property condition discovered before closing should be addressed before proceeding. The borrower has the right to ensure the property is in the expected condition, and closing should be delayed until the issue is properly resolved.
Why This Is the Correct Answer
Material changes to the property condition discovered before closing should be addressed before proceeding. The borrower has the right to ensure the property is in the expected condition, and closing should be delayed until the issue is properly resolved.
More Mortgage Knowledge Questions
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?
A borrower refinances their home with a cash-out refinance loan of $750,000. The original loan balance was $400,000, and they're taking $300,000 in cash. If conforming limits allow $766,550, how is this loan classified?
Under TRID regulations, discount points must be disclosed on the Loan Estimate in which section?
During the draw period of a HELOC, what type of payments are borrowers typically required to make?
A lender packages a $500,000 conventional loan that meets all current GSE standards but was originated using outdated underwriting software that didn't verify employment in the required manner. This loan would be:
An MLO receives a loan application where the borrower lists their income as 'self-employed - varies monthly.' No specific dollar amount is provided. The borrower states they will provide tax returns later. What is the status of this application under TRID?
A borrower is applying for a USDA Rural Development loan. Which of the following best describes the primary eligibility requirement for the property location?
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Previous Question
A mortgage loan originator receives partial application information on Monday at 2:00 PM, including the borrower's name, income, and SSN. The property address and estimated value are provided Tuesday at 10:00 AM, and the loan amount is submitted Wednesday at 11:00 AM. When must the Loan Estimate be delivered?
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A borrower requests to waive escrow on a conventional loan with 15% down payment. The property is located in a flood zone requiring flood insurance. Which statement is most accurate?