When a construction loan requires a 'two-party check' system for draw payments, this means:
Correct Answer
A) Both the borrower and contractor must endorse the check before it can be deposited
A two-party check system requires both the borrower and contractor to endorse draw payments, ensuring that funds are properly distributed and that both parties acknowledge the work completion. This helps prevent disputes and ensures contractors are paid for completed work while maintaining borrower oversight.
Why This Is the Correct Answer
A two-party check system requires both the borrower and contractor to endorse draw payments, ensuring that funds are properly distributed and that both parties acknowledge the work completion. This helps prevent disputes and ensures contractors are paid for completed work while maintaining borrower oversight.
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A borrower receives a DU recommendation of 'Approve/Eligible' for a conventional loan, but the MLO notices the borrower's employment gap of 8 months ending 3 months ago. Should the MLO be concerned about this gap affecting the loan approval?
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An MLO discovers that a borrower's existing mortgage has a prepayment penalty of $12,000. The proposed refinance would save $150 per month in payments. What is the minimum payback period that would generally support tangible net benefit?