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.
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?
An MLO provides pre-qualification based on a borrower's current employment but learns the borrower is starting a new job next month with a $10,000 salary increase. How should this information be handled?
An MLO issues a pre-approval letter that states 'subject to satisfactory appraisal and final underwriting approval.' The borrower uses this letter to make an offer, but the appraisal comes in $15,000 below the purchase price. What is the lender's obligation?
A borrower submits a mortgage application on Monday at 2:00 PM. The lender determines the application is complete on Wednesday at 10:00 AM. What is the latest day the Loan Estimate must be delivered to comply with TRID requirements?
How long is a typical pre-approval letter valid?
A borrower requests a rate lock on a construction-to-permanent loan where the construction phase is 8 months and the permanent phase begins immediately after. The lender's rate lock policy allows maximum 120-day locks. How should the MLO handle this situation?
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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: