The MLO is resolving Secondary Market GSEs during a quality-control sample. Which action best fits the rule?
Correct Answer
C) Apply the Fannie Mae or Freddie Mac selling-guide requirement
Why this is correct: When a loan is intended for sale to a Government-Sponsored Enterprise (GSE) like Fannie Mae or Freddie Mac, it must meet that specific GSE's eligibility and underwriting requirements as detailed in its selling guide. During quality control, the reviewer must apply the correct selling-guide rules to the specific loan file to ensure it conforms and is eligible for purchase. This is the core rule for GSE loans. Why the other choices are wrong: Apply a different loan-program rule without checking the file facts is incorrect because different programs (e.g., FHA vs. GSE) have different rules; applying the wrong one invalidates the review. Use prior licensing approval as a substitute is wrong because an MLO's license has no bearing on whether a specific loan meets secondary market guidelines. Use the same treatment for all mortgage products without comparing program requirements is incorrect because product requirements differ; a one-size-fits-all approach fails quality control. Exam tip: In secondary market questions, "selling guide" is a key phrase. The correct GSE guide is the rulebook for that loan.
Why This Is the Correct Answer
The correct response is "Apply the Fannie Mae or Freddie Mac selling-guide requirement" because GSE purchases depend on conforming eligibility, selling-guide standards, and loan-limit rules.
Why the Other Options Are Wrong
Option A: 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 B: Use prior licensing approval as a substitute for the current Secondary Market GSEs requirement.
This distractor shifts the issue to a different trigger, product, or timing rule instead of applying the rule tested in the stem.
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
More Mortgage Knowledge Questions
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 for a current borrower shows a $780 shortage. One month's escrow payment is $600. The servicer elects to require repayment over the shortest installment period permitted by Regulation X for this shortage. What schedule is permitted?
What does an amortization schedule show for each scheduled payment?
A monthly principal-and-interest payment is $1,800, of which $1,250 is interest. How much principal is paid that month?
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