A lender intends to sell a $920,000 first mortgage on a single-family home in a county the pricing desk believes is high-cost. Before the file moves on, what should be confirmed?
Correct Answer
D) Whether the loan meets GSE conforming eligibility in that county
A loan is saleable to Fannie Mae or Freddie Mac only if it conforms, and the loan limit is one of the conditions that has to hold. Limits are set per county and the high-cost figure is higher than the baseline, so what the desk believes about the county is the thing to verify rather than assume. Other choices: HMDA governs what gets reported about the application and settles nothing about whether the loan can be sold; a borrower's preference does not make a loan eligible; and pricing every product under one standard is the opposite of checking the programme this one has to meet.
Why This Is the Correct Answer
The correct response is "Check whether the loan meets GSE conforming eligibility" because GSE purchases depend on conforming eligibility, selling-guide standards, and loan-limit rules.
Why the Other Options Are Wrong
Option A: Whether the loan is reportable under HMDA
This distractor shifts the issue to a different trigger, product, or timing rule instead of applying the rule tested in the stem.
Option B: Whether the borrower prefers this product, since the choice is theirs
Ignore product, occupancy, LTV, or eligibility limits because the borrower prefers the loan. is not correct because it does not apply the rule tested by this file scenario.
Option C: Whether the lender prices every product under one pricing standard
Use the same treatment for all mortgage products without comparing program requirements. is not correct because it does not apply the rule tested by this file scenario.
Memory Technique
GSE secondary-market requirements: identify the rule being tested, then choose the action that documents or applies that rule before the file moves forward.
Exam Tip
Match the file facts to GSE secondary-market requirements; do not choose an exception or shortcut that skips the required rule.
Common Mistakes to Avoid
- -Choosing an internal exception instead of the governing rule
- -Treating preliminary or informal facts as a substitute for required documentation
- -Answering from a familiar but unrelated mortgage topic
More Mortgage Knowledge Questions
A subordinate-lien home equity loan closes at an APR of 9.4% when the average prime offer rate for a comparable transaction is 6.1%.
In a closing-readiness check, a risk reviewer sees facts tied to TILA Truth in Advertising. What should the file reflect?
In a training scenario, a trainee asks which official source controls FHA single-family origination policy. What action best follows the rule?
A compliance analyst compares the file facts with LTV Ratio Calculation during a licensing team review. Which conclusion is accurate?
A branch manager asks about a loan file because a trainee asks which official source controls FHA single-family origination policy. What should happen?
The loan team compares the file facts with ARM Cap Structures during a borrower follow-up call. Which conclusion is accurate?
A borrower has a 30-year fixed-rate mortgage with monthly principal and interest of $1,450. Property taxes increase, and taxes are paid through escrow. What can happen to the total monthly payment?
A loan has an outstanding principal balance of $240,000 and a 6% annual interest rate. Using simple monthly accrual, how much interest accrues for one month?
An annual escrow analysis projects a $780 shortage. The borrower asks how it will be collected.
What does an amortization schedule show for each scheduled payment?
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