A team member asks about Secondary Market GSEs in an investor-delivery review while trying to confirm the rule-based response. Which response should the file reviewer use?
Correct Answer
A) Check whether the loan meets GSE conforming eligibility
Why this is correct: Loans sold to Government-Sponsored Enterprises (GSEs) like Fannie Mae and Freddie Mac must meet specific conforming eligibility standards, including loan limits, credit score requirements, debt-to-income ratios, and property guidelines. The file reviewer must check these GSE criteria to ensure the loan is eligible for delivery. Why the other choices are wrong: "Apply a different loan-program rule without checking the file facts" is wrong because GSE eligibility depends on verifying the loan's specific facts against published guides. "Ignore product, occupancy, LTV, or eligibility limits because the borrower prefers the loan" is wrong because GSE purchase requirements are strict and not subject to borrower preference. "Use the same treatment for all mortgage products without comparing program requirements" is wrong because non-conforming loans (e.g., jumbo) have different rules; GSE eligibility requires a specific check. Exam tip: For secondary market questions, always think 'conforming'—check loan limits and GSE selling-guide standards first.
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 B: Apply a different loan-program rule without checking the file facts.
Apply a different loan-program rule without checking the file facts. is not correct because it does not apply the rule tested by this file scenario.
Option C: Ignore product, occupancy, LTV, or eligibility limits because the borrower prefers the loan.
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 D: Use the same treatment for all mortgage products without comparing program requirements.
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
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