During the pre-qualification process, what type of credit inquiry is typically performed?
Correct Answer
C) No credit inquiry is performed
Traditional pre-qualification often involves no credit check at all, relying instead on the borrower's self-reported credit information. Some lenders may perform a soft inquiry, but many pre-qualification processes are based entirely on unverified borrower statements.
Why This Is the Correct Answer
Traditional pre-qualification often involves no credit check at all, relying instead on the borrower's self-reported credit information. Some lenders may perform a soft inquiry, but many pre-qualification processes are based entirely on unverified borrower statements.
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?
People Also Study
Federal Mortgage-Related Laws
23% of exam
General Mortgage Knowledge
23% of exam
Ethics, Fraud & Consumer Protection
17% of exam
Uniform State Test Content
12% of exam
Previous Question
An MLO learns that a competing lender has offered their borrower significantly better terms two days before closing. The MLO's obligation under fair dealing principles is to:
Next Question
What is the minimum credit score typically required for a borrower to qualify for an FHA loan with the standard 3.5% down payment?