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MLO EXAM > Underwriting, closing and the secondary market > Flashcards

Underwriting, closing and the secondary market Flashcards

1
Q

Fannie Mae’s automated underwriting system is known as

A

Desktop underwriter (DU)

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2
Q

Freddie Mac’s automated underwriting system is known as:

A

Loan prospector (LP)

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3
Q

Who makes the final decision as to whether a loan will be funded ?

A

the lender

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4
Q

the automated underwriting systems can NOT be used for what types of loans?

A

jumbo

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5
Q

who does Fannie Mae hold responsible for the quality of the appraisal ?

A

the lender

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6
Q

an appraisal must be re-certified if its older than

A

4 months

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7
Q

The most probable price which a property should bring in an open market is

A

market value

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8
Q

The highest and best use of property is NOT

A

based on possible future zoning changes

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9
Q

the appraisal approach that best applies to residential property is

A

sales comparison approach

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10
Q

the appraisal approach that best applies to vacant land is

A

sales comparison approach

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11
Q

the appraisal approach that best applies to a school is

A

cost approach

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12
Q

what is the minimum number of closed sales comparable that can be used in the sales comparison approach?

A

3

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13
Q

What is the most important type of comparable used in the sales comparison approach?

A

closed

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14
Q

An office building has an annual net operating income of $50,000 and a capitalization rate of 9%. what is its value ?

A

$555,555

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15
Q

The method used to value income producing properties based on the rental incomes and sales prices of similar properties is called the

A

GRM (gross rent multiplier)

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16
Q

in a completion escrow account, what is the minimum estimated repair cost held in trust by the lender?

A

120%

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17
Q

A legally binding letter from the lender to the mortgagor stating the terms of the loan is

A

a commitment letter

18
Q

who handles complaints regarding mortgage loan rejections

A

CFPB

19
Q

All of the following apply to a mortgagors title insurance policy EXCEPT

A

based on loan amount

20
Q

surveys are NOT certified to

A

real estate brokers

21
Q

what gives someone other than the owner the right to be on the property for a specific purpose ?

A

Easement

22
Q

what is a clause in the deed that limits the future use of a property?

A

deed restriction

23
Q

the most common type of legal description for residential subdivisions is

A

lot and block

24
Q

the most accurate type of legal description for residential subdivision is

A

metes and bounds

25
Q

a fee charged to the borrower for determining whether or not a property was in a flood zone is a

A

flood certification fee

26
Q

which form is used as the standard settlement form?

A

HUD-1/closing disclosure

27
Q

the day of closing is May 15. when is the first loan payment due?

A

July 1

28
Q

which is an acceptable source of funds at closing?

A

wire transfer

29
Q

what type of funding occurs when a lender obtains funds from a line of credit at a commercial bank?

A

warehouse funding

30
Q

the late fee for FHA and VA loans is

A

4% of principle and interest

31
Q

when a lender sells a mortgage loan to another lender, this is called

A

assignment of mortgage

32
Q

when an assignor keeps the servicing rights this is known as

A

selling a loan with servicing retained

33
Q

Ginnie Mae does

A

guarantee loans

34
Q

Fannie Mae was established in

A

1938

35
Q

Fannie Mae will not purchase a mortgage secured by a

A

Orchard

36
Q

which title insurance policy is transferable ?

A

mortgagee

37
Q

the title company considers unpaid property taxes to be an

A

encumbrance

38
Q

the principle of value that focuses on the most profitable, legal use to which a property can be put is

A

principle of highest and best use

39
Q

a point of beginning is used in what type of survey

A

metes and bounds

40
Q

a neighbors fence that crosses over on to another property is an example of

A

encroachment

41
Q

an outstanding claim on a property that limits the ability to sell the property is a

A

title defect

42
Q

the national trade association and voice of the abstract and title insurance industry is

A

ALTA

MLO EXAM (13 decks)

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