When a borrower receives a monetary gift from a relative for closing costs, which statement is most accurate regarding the gift letter requirements?
Correct Answer
D) The gift letter must specify that no repayment is expected
The gift letter must clearly state that no repayment is expected or required. While some loan programs have relationship requirements for donors, the key universal requirement is that the gift is truly a gift with no expectation of repayment.
Why This Is the Correct Answer
The gift letter must clearly state that no repayment is expected or required. While some loan programs have relationship requirements for donors, the key universal requirement is that the gift is truly a gift with no expectation of repayment.
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Previous Question
When comparing ARM products, an MLO shows a borrower a 5/1 ARM with a 2% annual cap and 5% lifetime cap versus a 7/1 ARM with a 1% annual cap and 6% lifetime cap. Both start at 3.5%. What is the maximum rate the 5/1 ARM could reach in year 7?
Next Question
An MLO's compensation plan includes a base salary plus a bonus based on the loan volume originated in a quarter. The bonus structure pays 0.25% of loan volume for the first $5 million, 0.30% for the next $5 million, and 0.35% for volume above $10 million. This compensation structure is: