Qualified Mortgage Flashcards
What is the maximum prepayment penalty which may be charged in the first year of the loan if the loan is considered a qualified mortgage?
A.Zero
B.2% of the outstanding balance
C.3% of the outstanding balance
D.1% of the outstanding balance
B. 2% of the outstanding balance
Which of the following is NOT a required characteristic of a qualified mortgage (QM)?
A.Debt-to-income may not exceed 43%
B.Qualifying points and fees charged may not exceed 3% of the loan amount
C.The borrower must make a down payment
D.Loan must be fully amortizing
C.The borrower must make a down payment
A homeowner has an FHA mortgage that is assumable. The homeowner would like to sell his home and carry the contract - in other words, offer seller financing. The homeowner’s current FHA loan would not be paid off. Which of the following is most true?
A.The homeowner can legally allow the buyer to assume the existing loan, provided that the buyer is qualified
B.The homeowner is violating the assumability clause in their loan and risks having the loan called due and payable
C.The homeowner is violating the due-on-sale clause and risks having the loan called due and payable
D.Because the loan is FHA-insured and is assumable, the homeowner can offer seller financing without paying off their current loan and without violating the terms of their note and trust deed
A.The homeowner can legally allow the buyer to assume the existing loan, provided that the buyer is qualified
Which of the following is true regarding a borrower’s ability to qualify for FHA financing if their credit score is 560?
A.they are not eligible for FHA financing
B.they are eligible for FHA financing up to 85% LTV
C.they are eligible for FHA financing up to 96.5% LTV
D.they are eligible for FHA financing up to 90% LTV
D.they are eligible for FHA financing up to 90% LTV
A borrower requesting maximum FHA financing must have a credit score of at least:
A.640
B.500
C.620
D.580
D.580
According to the Statement on Subprime Mortgage Lending, which of the following would not be a characteristic of a subprime borrower?
A.A foreclosure in the past 24 months
B.A credit score of 645
C.Bankruptcy within the last three years
D.Two 60-day delinquencies in the last year
B.A credit score of 645
A veteran with full eligibility and who is seeking a loan greater than $144,000 would be able to obtain a maximum guaranty of:
A.$548,250
B.$100% of the loan amount
C.$144,000
D.25% of the loan amount
D.25% of the loan amount
The Interagency Guidance on Nontraditional Mortgage Products applies to:
A.Any adjustable-rate mortgage
B.Any mortgage with a prepayment penalty
C.Any mortgage that requires a determination of ability to repay
D.Any mortgage which allows the deferment of principal or interest
D.Any mortgage which allows the deferment of principal or interest
Which of the following contains only terms which apply to VA loans?
A.Guarantee fee, veterans, eligibility
B.Residual income, funding fee, insuring
C.Upfront mortgage insurance premium, 100% financing, base loan amount
D.Residual income, guarantee, certificate of reasonable value
D.Residual income, guarantee, certificate of reasonable value
According to the Interagency Guidance on Nontraditional Mortgage Product Risks, a borrower’s repayment ability:
A.Should be based on the initial payment terms of the loan
B.Should be based on a fully-amortizing repayment schedule
C.Is irrelevant if there is sufficient equity
D.Is irrelevant if the borrower has sufficient assets
B.Should be based on a fully-amortizing repayment schedule
