What is the primary purpose of automated underwriting systems (AUS) like Desktop Underwriter (DU) and Loan Prospector (LP)?
Correct Answer
B) To provide consistent, objective loan approval recommendations based on risk assessment
Automated underwriting systems are designed to provide consistent, objective risk assessment and loan approval recommendations based on standardized criteria, while human underwriters may still be involved in final decisions.
Why This Is the Correct Answer
Automated underwriting systems are designed to provide consistent, objective risk assessment and loan approval recommendations based on standardized criteria, while human underwriters may still be involved in final decisions.
More Origination Questions
A borrower has a construction-to-permanent loan with a 12-month construction phase. At month 10, construction is only 60% complete due to delays. What is the most likely outcome?
For a construction-to-permanent loan, when must the initial Closing Disclosure be provided for the construction phase?
During a refinance transaction, the appraiser determines that significant unpermitted additions were made to the property. The appraiser wants to discuss this with the MLO before finalizing the report. What should the MLO do?
An appraiser discovers that a property has significant foundation issues that were not disclosed. The appraiser reduces the property value by $25,000 and includes detailed comments about the structural problems. The loan officer is upset because this will kill the deal. Under AIR, the loan officer:
An MLO's compensation structure includes higher payments for certain loan products. When is it acceptable to recommend these higher-compensated products?
People Also Study
Federal Mortgage-Related Laws
23% of exam
General Mortgage Knowledge
23% of exam
Ethics, Fraud & Consumer Protection
17% of exam
Uniform State Test Content
12% of exam
Previous Question
A credit report shows a tradeline with the notation 'Account closed by credit grantor.' What is the most likely implication for mortgage underwriting?
Next Question
A borrower wants to refinance their 4.5% fixed-rate mortgage to access $75,000 in home equity for their child's college tuition. The new loan would be at 5.0%. Which statement is most accurate regarding tangible net benefit?