During an advertising approval, a loan file reviewer identifies an issue involving sponsorship and employment status. Which response is most compliant?
Correct Answer
C) Include known debts in repayment analysis
Credit evaluation uses verified credit, debts, history, and repayment ability. The best answer is "Include known debts in repayment analysis".
Why This Is the Correct Answer
The correct response is "Include known debts in repayment analysis" because Credit evaluation uses verified credit, debts, history, and repayment ability.
Why the Other Options Are Wrong
Option A: Use an outdated credit report after new debt is disclosed.
This choice is not the best answer because it applies the wrong file step for credit evaluation; the governing rule is tested by the correct option.
Option B: Treat disputed accounts as irrelevant without following program or investor requirements.
This choice is a tempting shortcut, but it conflicts with credit evaluation because the file still needs the required documentation, timing, or rule-based review before the action is taken.
Option D: Ignore a recent inquiry because the borrower says no new account was opened.
This choice is a tempting shortcut, but it conflicts with credit evaluation because the file still needs the required documentation, timing, or rule-based review before the action is taken.
Memory Technique
credit evaluation: identify the rule being tested, then choose the action that documents or applies that rule before the file moves forward.
Exam Tip
For credit evaluation questions, separate the required file step from plausible sales, timing, or documentation shortcuts.
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 Origination Questions
A disclosure specialist is resolving Income Calculation Methods during an internal audit sample. Which action best fits the rule?
In a closing-readiness check, a quality-control reviewer sees facts tied to Self Employed Income Calculation. What should the file reflect?
During a disclosure desk review, a policy analyst encounters an Income Calculation Self Employed issue. Which response should decide how the file should be documented?
During a training quiz scenario, the loan team encounters an Income Calculation issue. Which response should resolve the issue before the file moves forward?
A team member asks about Dodd Frank MLO Compensation in an investor-delivery review while trying to apply the requirement without relying on borrower preference. Which response should the loan team use?
A team member asks about Construction Loan Terms in a compliance desk review while trying to select the answer that fits the governing requirement. Which response should a disclosure specialist use?
A team member asks about Construction Loan Requirements in an investor-delivery review while trying to resolve the issue before the file moves forward. Which response should a licensing coordinator use?
During a disclosure desk review, a training manager encounters a Pre qualification vs Pre approval issue. Which response should decide how the file should be documented?
In a pricing desk question, the loan team sees facts tied to TRID Closing Disclosure Changes. What should the file reflect?
In a closing-readiness check, a closing coordinator sees facts tied to Fair Dealing Principles. What should the file reflect?
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