Mortgage Loan Origination Activities

Before the team acts on a servicing handoff check, a closing coordinator must address Asset Verification and Reserves. Which response is most defensible?

An MLO is reviewing procedures for a case where a cost changes after the Closing Disclosure has already been provided. What is the proper handling?

During a post-application update, a quality-control reviewer encounters a Credit Analysis and Evaluation issue. Which response should avoid a shortcut that would misapply the rule?

Between the Loan Estimate and closing, prepaid interest increases $180, homeowner insurance increases $95, transfer taxes increase $40, and a credit report fee for which the consumer could not shop increases $12. There is no valid revised estimate or other exception. Which increases violate TRID's zero-tolerance rule?

A construction-to-permanent loan will disburse in 5 draws over 11 months before the permanent phase begins. Which Regulation Z appendix provides a disclosure method for multiple-advance construction transactions?

Before closing, the team discovers that a borrower asks which upfront charge can be collected before intent to proceed. What is the safest compliant answer?

A construction loan agreement allows advances only after documented completion of specified work. A builder requests the next draw, but no completion evidence has been provided. What should occur?

Before releasing the final construction draw, which combination most directly supports project completion and clear collateral?

A construction-to-permanent loan will convert to a substantially higher fully amortizing payment. Which payment is especially important when assessing the borrower's long-term repayment capacity?

A construction-to-permanent note states that conversion requires completion, a certificate of occupancy, and no unresolved liens. Construction is finished, but a mechanic's lien remains. What should happen?

A borrower with $61,000 of documented salary also expects the home to appreciate about $20,000 in the first year and offers that as support for a larger loan. May the lender count the home's projected appreciation as income or assets when evaluating ability to repay?

A branch manager asks about a loan file because a processor wants to omit known monthly obligations from underwriting. What should happen?

Before closing, the team discovers that a processor wants to omit known monthly obligations from underwriting. What is the safest compliant answer?

A tolerance violation of $400 comes to light 3 days before consummation. The branch manager proposes to cover it by cutting the originator's commission on that file by $400. If the $400 is a bona fide unforeseen increase in an actual settlement cost rather than a pricing concession or planned commission adjustment, may the commission be reduced to absorb that increase?

An organization gave its 8 unlicensed originators a 2-hour orientation when they were hired in 2023 and has run nothing since. Two states have changed their disclosure rules in that time. Does the one-time orientation satisfy the organization's periodic training obligation under Regulation Z?

An MLO is reviewing procedures for a case where a late closing change occurs and the team must decide whether a new waiting period is required. What is the proper handling?

In a pricing desk question, the loan team sees facts tied to TRID Closing Disclosure Changes. What should the file reflect?

Annual escrow disbursements on a file come to $7,200 for taxes and insurance together. The servicer wants to hold the largest cushion RESPA allows. Assuming neither state law nor the mortgage documents impose a lower limit, what is the maximum permitted escrow cushion?

A processor asks how to handle a file where the file has borrower statements but no verified ability-to-repay analysis. Which response is most accurate?

A mortgage has a 6.00% note rate but a 6.24% APR. Why can the APR be higher than the note rate?

During intake, the borrower pays the broker directly and the creditor also offers compensation. What is the best compliant response?

A revised loan estimate is issued on Tuesday 12 May for a consummation set for Thursday 14 May, reflecting a changed circumstance the lender learned of that morning. Does providing the revised Loan Estimate only two business days before consummation satisfy its four-business-day receipt requirement?

In a training scenario, a closing is approaching and the borrower has not yet received the Closing Disclosure. What action best follows the rule?

A creditor delivers the Loan Estimate four business days before a planned consummation. Even though it met the three-day application-delivery rule, what separate timing problem exists?

After a Loan Estimate is issued, the consumer requests a change from a 30-year fixed-rate loan to a 15-year fixed-rate loan. May the creditor issue a revised Loan Estimate reflecting the requested change?

A caller supplies her name, income of $96,000, Social Security number to obtain a credit report, property address, estimated value of $410,000, and requested loan amount of $328,000. Has the lender received all six TRID application items that start the initial Loan Estimate clock?

A quality-control reviewer flags a case because the consumer locks the interest rate after the initial disclosure package. What correction is appropriate?

A borrower asks which figure on the closing disclosure tells him the total dollars he will have paid by the end of a 30-year loan, including principal, interest, mortgage insurance and loan costs. Which Loan Calculations field reports this total dollar amount?

The cash to close table shows the closing costs financed rising from $0 on the loan estimate to $3,100 on the closing disclosure, with the "Did this change?" column left blank. Does leaving the change column blank satisfy the Closing Disclosure's cash-to-close comparison requirements?

The seller agrees to pay $4,200 of the buyer's closing costs. The processor asks how that appears on the buyer's closing disclosure. How should the seller's payments toward individual buyer closing charges appear on the Closing Disclosure?

Before closing, the team discovers that the consumer locks the interest rate after the initial disclosure package. What is the safest compliant answer?

A quality-control reviewer flags a case because a HELOC will provide funds for the down payment on the same dwelling. What correction is appropriate?

A manager suggests telling appraisers the contract price up front on every order, so they "know what they are working towards". A compliance analyst objects. On what grounds?

In a mortgage origination file, a late closing change occurs and the team must decide whether a new waiting period is required. Which action should be taken?

A borrower-facing employee is unsure what to do when a processor wants to omit known monthly obligations from underwriting. What is the correct response?

On a $320,000 loan a borrower can pay 1.5 discount points to cut the rate, lowering the monthly payment by $84. She expects to keep the loan about 4 years. Using only upfront points and monthly payment savings, does the four-year holding period reach the break-even point?

A borrower locks at 6.5% for 60 days. Rates fall to 6.0% three weeks later and she asks to be given the lower rate. Her lock has no float-down provision. Absent a voluntary renegotiation, does the borrower have a contractual right to the lower market rate under this lock?

A married borrower applies alone for a $275,000 loan on a home she will own in her sole name, and qualifies on her own income in a state that is not a community property state. May the lender require her spouse to sign the promissory note solely because she is married?

Four products cross the desk: a 25-year interest-only loan, a 30-year fixed with a 2% origination fee, a 20-year loan with a balloon in year 7, and a loan whose payment option lets the balance rise. Assuming all other General QM requirements are met and no balloon-payment exception applies, which product has permissible loan features?

A borrower receives $22,000 toward her down payment from her mother, who writes that the money need not be repaid. Under a documentation policy requiring both gift status and receipt to be verified, which records support use of the funds?

A borrower changed jobs 7 weeks ago within the same field, at a higher salary, after 6 years with her previous employer and no gap between the 2 roles. What do these employment-history facts indicate about stability, subject to verification and the applicable underwriting guidelines?

A refinance on the borrower's principal dwelling is consummated on Monday 8 June. The notice of the right to rescind and all material disclosures went out the same day. If the consumer receives all required notices and disclosures that day, no waiver or holiday applies, and the lender is reasonably satisfied no rescission occurred, when may it first disburse?

Annual taxes are $6,000 and insurance $1,800, so monthly escrow is $650. Closing is 15 September and the first tax installment of $3,000 falls due 1 November. Using aggregate escrow accounting and assuming a two-month cushion is permitted, how should the required initial deposit be determined?

Post-closing review of a loan funded 3 weeks ago finds the borrower's employment was verified 71 days before consummation, against an internal standard of 10 days. If the loan purchaser also requires verification within ten days, what principal risk does this stale verification create?

The estimate showed $27,400 cash to close. Three days before closing the seller agrees to a $5,000 credit, bringing it to $22,400. Assuming no APR inaccuracy, product change, or new prepayment penalty results, what correction and waiting-period treatment applies?

A contract is $415,000 and the appraisal comes in at $392,000. The buyer has 10% down and the program lends to 90% of value. What is the maximum loan amount at 90% of the lower appraised value?

For a Fannie Mae purchase, a borrower with $5,200 monthly qualifying income has an unexplained $14,500 deposit needed for closing. It is not identifiable as payroll or another verified source. What is the appropriate treatment?

A borrower will be overseas on the 14 July closing and wants her brother to sign under a power of attorney she executed in May. What should be verified before permitting the brother to sign under this power of attorney?

Recording fees and services the consumer shopped for from the lender's list totalled $1,480 on the estimate and $1,610 at closing. Assuming all these unaffiliated-provider services qualify for the ten-percent bucket, does the aggregate increase require a refund?

A week after the estimate, the appraisal comes in showing the property is on a private road, and the title company raises its fee by $340. If the newly discovered property fact could not reasonably have been known and causes the fee increase, can it support a revised Loan Estimate and what is the ordinary issuance deadline?