Underwriting Assessment January 2012

32 Questions | Total Attempts: 5778

SettingsSettingsSettings
Please wait...
Underwriting Assessment January 2012

.


Questions and Answers
  • 1. 
    Mortgage Insurance The GSE required standard MI Coverage on a 30-year, fixed rate loan with a 95% LTV is _______% coverage.  
    • A. 

      35%

    • B. 

      30%

    • C. 

      25%

    • D. 

      18%

  • 2. 
    LTV/CLTV     If a lender approves a borrower for a mortgage loan of $135,000 for the purchase of a house costing $145,000, what is the loan’s LTV ratio? (Round up to the nearest 1%)
    • A. 

      107%

    • B. 

      100%

    • C. 

      86%

    • D. 

      94%

  • 3. 
    General   Which organizations(s) can pool loans for securitization?    
    • A. 

      Fannie Mae

    • B. 

      Freddie Mac

    • C. 

      Lenders

    • D. 

      All of the above.

  • 4. 
    Initial Documents     On the application, the yes/no questions that must be answered by both the borrower and co-borrower are called:  
    • A. 

      Statements of Intent

    • B. 

      Verifications

    • C. 

      Affidavits.

    • D. 

      Declarations

  • 5. 
    On the application, a borrower’s child support payments are listed as a/an:  
    • A. 

      Secured Asset, only if court-ordered

    • B. 

      Liability

    • C. 

      Income

    • D. 

      Credit

  • 6. 
    On the application, the borrower’s present mortgage that will be paid off is listed as a:
    • A. 

      Liability

    • B. 

      Credit to the Seller

    • C. 

      Liquid Asset

    • D. 

      Debit to the buyer

  • 7. 
    The RESPA form that approximates the charges for closing costs is called:  
    • A. 

      Regulation Z

    • B. 

      Real Estate Settlement Procedure

    • C. 

      Good Faith Estimate

    • D. 

      HUD 1001

  • 8. 
    Employment/Income     One method of calculating Net Rental Income is to multiply the gross rental income by _____%, and then subtract the total mortgage payment from the result.
    • A. 

      65%

    • B. 

      75%

    • C. 

      85%

    • D. 

      95%

  • 9. 
    If the calculation of Net Rental income results in a negative amount, it should be listed as:  
    • A. 

      Real Estate Owned

    • B. 

      Compensating Factor

    • C. 

      Monthly Credit

    • D. 

      Monthly Debt

  • 10. 
    If child support is considered stable income, how long must it continue beyond the closing date of the mortgage to be used as qualifying income?  
    1. 4 years.
    2. 2 years.
    3. 3 years.
    4. No time limit.
    • A. 

      4 years

    • B. 

      2 years

    • C. 

      3 years

    • D. 

      No time limit

  • 11. 
    If a borrower is paid on a bi-monthly schedule, how many paychecks does the borrower receive during a calendar year?  
    • A. 

      22 paychecks

    • B. 

      24 paychecks

    • C. 

      26 paychecks

    • D. 

      28 paychecks

  • 12. 
    If a borrower is employed by a relative or closely held family business, what other documentation, in addition to a VOE, is required?  
    1. Both a and c.
    2. None of the above.
     
    • A. 

      A.Borrower’s personal federal income tax returns for the past two years.

    • B. 

      A.Two pay stubs (gross pay for the most recent 30-day period and YTD earnings).

    • C. 

      A.Confirmation letter from an accountant (non-family member) to verify the borrower does not own 25% or more of his/her family business.

    • D. 

      Both a and c.

    • E. 

      None of the above.

  • 13. 
    Before it is considered qualifying income, how many years must overtime pay, bonus or commissions be reflected in the borrower’s current employment history, under standard non-AUS underwriting guidelines?  
    • A. 

      2 years.

    • B. 

      3 years.

    • C. 

      4 years.

    • D. 

      No time limit.

  • 14. 
    Select the items that may be used to calculate gross monthly income for a borrower (not self-employed) under standard non-AUS underwriting guidelines:   a.   b.   c.   d.   Both b and c. e.   None of the above.
    • A. 

      Documented overtime paid for the past 6 months.

    • B. 

      Documented bonus income received annually for past 3 years.

    • C. 

      Court ordered child support with consistent receipt for the past 2 years.

    • D. 

      Both b and c.

    • E. 

      None of the above.

  • 15. 
    Handwritten pay stubs and/or W-2s are considered acceptable income documentation.
    • A. 

      True

    • B. 

      False

  • 16. 
    According to Fannie Mae, a borrower must have a history of receiving stable income from employment or other sources and a reasonable expectation that the income will continue in the foreseeable future.  Fannie defines “foreseeable future as:  
    • A. 

      18 months

    • B. 

      48 months

    • C. 

      12 months

    • D. 

      36 months

  • 17. 
    According to standard non-AUS guidelines, to substantiate employment and income for a self-employed borrower, the lender must obtain confirmation of the borrower’s personal and business earnings for the past _________ years?  
    • A. 

      5 years.

    • B. 

      7 years.

    • C. 

      3 years.

    • D. 

      2 years.

  • 18. 
    Shannon, a single mother of two children, works a full-time job earning $5,000 a month.  In addition, she receives $400 per month for each child.  Shannon’s son, Tyler, is 10; her daughter, Madison, is 17.  How much of Shannon’s total monthly income is considered qualifying income?  
    • A. 

      $5,000

    • B. 

      $5,400

    • C. 

      $5,800

    • D. 

      $6,000

  • 19. 
    While discussing loan programs and payments, Ingrid hands you her pay stubs dated October 16 and October 30. Each shows a gross pay of $3,045.  During your conversation, Ingrid tells you she is paid bi-weekly, because her paycheck is automatically deposited every other Friday. What is Ingrid’s gross monthly salary?  
    • A. 

      A.$6,090

    • B. 

      A.$6,254

    • C. 

      A.$6,455

    • D. 

      A.$6,597

  • 20. 
    Curtis is a pharmaceutical salesman earning a base pay of $4,000 per month, plus commission income.  From April 1 of one year to March 31 of the next year, Curtis earned $20,500 in commissions.  Prior to April 1, Curtis held a position in the accounting department of the sales office for three years.  According to non-AUS guidelines, what amount of total monthly income you can use to qualify Curtis for a home mortgage?  
    • A. 

      A.$5,428.57

    • B. 

      A.$4,000

    • C. 

      A.$1,428.57

    • D. 

      A.$5,000

  • 21. 
    You receive a file on Carrie Cadbury and her husband, Conner.  Carrie’s most recent two-years’ tax returns show receipt of $15,000 in alimony for each of the two years.  Conner has provided documentation to support  wages of $7,500 per month.  Without asking for additional documentation, what amount of total monthly income can you use to qualify Carrie and Conner?  
    • A. 

      $8,750

    • B. 

      $7,500

    • C. 

      $8,125

    • D. 

      $7,812.50

  • 22. 
    In addition to his base salary of $5,000 per month, James also receives a bonus check each month.  The bonus amount varies based on James’ job performance.  The Verification of Employment shows James earned the following in bonus income:   2006 bonus income     =  $12,000 2007 bonus income     =  $ 9,000 YTD (10/15/2008)      =  $  8,000 How much bonus income can you use to qualify James for a mortgage loan?  
    • A. 

      $865.67

    • B. 

      $708.33

    • C. 

      Bonus income cannot be used because it was lower in 2007 and 2008.

    • D. 

      Tax returns are required to use bonus income to qualify a borrower.

  • 23. 
    Tax Returns     You determine a borrower is self-employed if he/she owns ___________% or more of a business.  
    • A. 

      50%

    • B. 

      25%

    • C. 

      75%

    • D. 

      30%

  • 24. 
    From the list below, choose all of the business structures that can issue a Schedule K-1.  
    • A. 

      Corporation

    • B. 

      S Corporation

    • C. 

      Limited Liability Company

    • D. 

      Both a and c.

    • E. 

      Both b and c.

  • 25. 
    When all other risk factors are constant, the default rate for a self-employed borrower is significantly higher than that for a salaried borrower.
    • A. 

      True

    • B. 

      False

Back to Top Back to top