In a document-cure review, the file reviewer sees facts tied to Employment Verification Requirements. What should the file reflect?
Correct Answer
C) Resolve the underwriting condition before closing
Why this is correct: The question involves an Employment Verification Requirements issue found during a document-cure review. A "cure" review aims to fix deficiencies before closing. Underwriting conditions, such as unresolved employment verification, are fundamental to assessing the borrower's ability to repay. The correct action, "Resolve the underwriting condition before closing," is an absolute requirement. Funding a loan with an unresolved condition like this would be a serious compliance and safety-and-soundness failure. Why the other choices are wrong: "Apply a different loan-program rule without checking the file facts" is wrong because it suggests an arbitrary approach instead of verifying the specific employment documentation. "Ignore product, occupancy, LTV, or eligibility limits because the borrower prefers the loan" is wrong because employment and income verification are core underwriting pillars that cannot be ignored. "Use the same treatment for all mortgage products without comparing program requirements" is wrong because employment verification standards may vary (e.g., for a self-employed borrower vs. a salaried employee). Exam tip: If a condition is discovered during a pre-closing review, it must be resolved before closing. There is no exception to this rule.
Why This Is the Correct Answer
The correct response is "Resolve the underwriting condition before closing" because Processing and underwriting verify title, collateral, income, assets, credit, and conditions before approval.
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: 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
processing and underwriting review: 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 processing and underwriting review; 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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