An automated finding flags a $4,200 collection the borrower has marked as disputed with the bureau. What should the underwriter do about the disputed collection before relying on the automated finding?
Correct Answer
A) Resolve the dispute or document why the tradeline may stand
A disputed tradeline has to be addressed before the findings can be relied on, either by resolving the dispute or by documenting why the account should be treated as it appears. Other choices: a dispute may suppress the tradeline from scoring, which is the reason underwriting cannot simply ignore it; paying the $4,200 is one resolution among several rather than the only one; and a dispute does not bar approval, it bars proceeding without addressing it. Source: Disputed tradelines in automated underwriting
Why This Is the Correct Answer
A disputed tradeline has to be addressed before the findings can be relied on, either by resolving the dispute or by documenting why the account should be treated as it appears. Other choices: a dispute may suppress the tradeline from scoring, which is the reason underwriting cannot simply ignore it; paying the $4,200 is one resolution among several rather than the only one; and a dispute does not bar approval, it bars proceeding without addressing it. Source: Disputed tradelines in automated underwriting
More Origination Questions
Before the team acts on a servicing handoff check, a closing coordinator must address Asset Verification and Reserves. Which response is most defensible?
An MLO is reviewing procedures for a case where a cost changes after the Closing Disclosure has already been provided. What is the proper handling?
During a post-application update, a quality-control reviewer encounters a Credit Analysis and Evaluation issue. Which response should avoid a shortcut that would misapply the rule?
Between the Loan Estimate and closing, prepaid interest increases $180, homeowner insurance increases $95, transfer taxes increase $40, and a credit report fee for which the consumer could not shop increases $12. There is no valid revised estimate or other exception. Which increases violate TRID's zero-tolerance rule?
A construction-to-permanent loan will disburse in 5 draws over 11 months before the permanent phase begins. Which Regulation Z appendix provides a disclosure method for multiple-advance construction transactions?
Before closing, the team discovers that a borrower asks which upfront charge can be collected before intent to proceed. What is the safest compliant answer?
A construction loan agreement allows advances only after documented completion of specified work. A builder requests the next draw, but no completion evidence has been provided. What should occur?
Before releasing the final construction draw, which combination most directly supports project completion and clear collateral?
A construction-to-permanent loan will convert to a substantially higher fully amortizing payment. Which payment is especially important when assessing the borrower's long-term repayment capacity?
A construction-to-permanent note states that conversion requires completion, a certificate of occupancy, and no unresolved liens. Construction is finished, but a mechanic's lien remains. What should happen?
People Also Study
Federal Mortgage-Related Laws
24% of exam
General Mortgage Knowledge
20% of exam
Ethics, Fraud & Consumer Protection
18% of exam
Uniform State Test Content
11% of exam
Related Study Resources
Previous Question
A mortgage team asks a training manager about PMI options and mortgage-insurance costs during a disciplinary-risk review. Which answer should guide the file?
Next Question
In a mortgage origination file, a late closing change occurs and the team must decide whether a new waiting period is required. Which action should be taken?