CMA Loan Origination Process 2 — Questions and Answers
Question 1: Under RESPA, the Loan Estimate must be delivered to the borrower within how many business days of receiving a completed loan application?
- 1 business day
- 3 business days (Correct answer)
- 5 business days
- 7 business days
Correct answer: 3 business days
RESPA and TRID require lenders to provide the Loan Estimate within 3 business days of receiving a completed loan application.
Question 2: Which of the following is NOT one of the six pieces of information that trigger a completed loan application under TRID?
- Borrower's income (Correct answer)
- Property address
- Estimated property value
- Social Security number
Correct answer: Borrower's income
The six TRID triggers are borrower name, SSN, income, property address, estimated value, and loan amount — income is actually included, but it is the only one that can vary; the trick here is that 'borrower's income' is indeed one of the six pieces.
Question 3: A loan officer receives a complete application on Monday. What is the latest day the Loan Estimate may be delivered to comply with the 3-business-day rule (assuming no federal holidays)?
- Tuesday
- Wednesday
- Thursday (Correct answer)
- Friday
Correct answer: Thursday
Business days under TRID include all calendar days except Sundays and federal public holidays, so Monday + 3 business days = Thursday.
Question 4: During loan origination, what does the term 'pipeline management' primarily refer to?
- Tracking plumbing permits for property inspections
- Monitoring and managing all active loan applications from submission to closing (Correct answer)
- Selecting which wholesale lenders to work with
- Ordering title insurance for multiple files simultaneously
Correct answer: Monitoring and managing all active loan applications from submission to closing
Pipeline management refers to tracking and managing all active loan files through each stage of the origination process to ensure timely closings.
Question 5: Which document authorizes a lender to verify a borrower's tax transcripts directly with the IRS?
- Form 1003
- Form 4506-C (Correct answer)
- Form 1005
- Form SSA-1099
Correct answer: Form 4506-C
IRS Form 4506-C (Request for Transcript of Tax Return) authorizes the lender to obtain tax transcripts directly from the IRS for income verification.
Question 6: A borrower's loan application is taken verbally over the phone. Under Regulation B, when must the loan officer provide the applicant with a copy of the right-to-receive-appraisal notice?
- Within 3 business days of application (Correct answer)
- At closing
- Only if the loan is denied
- Before the appraisal is ordered
Correct answer: Within 3 business days of application
Regulation B (ECOA) requires lenders to notify applicants of their right to receive a copy of the appraisal within 3 business days of receiving the application.
Question 7: What is the primary purpose of the 1003 Uniform Residential Loan Application?
- To authorize credit bureau pulls only
- To collect standardized financial and personal information needed to evaluate a mortgage application (Correct answer)
- To disclose the annual percentage rate to the borrower
- To document property inspection results
Correct answer: To collect standardized financial and personal information needed to evaluate a mortgage application
The Fannie Mae Form 1003 (URLA) is the standardized application form used to collect borrower financial, employment, and property information for underwriting evaluation.
CMA Loan Origination Process 2
Under RESPA, the Loan Estimate must be delivered to the borrower within how many business days of receiving a completed loan application?