CMP CMP - Certified Mortgage Processor Credit Analysis and Credit Reports Questions and Answers 2 — Questions and Answers
Question 1: A borrower has two scores from the tri-merge report because one bureau returned no score. Which score is used to qualify?
- The higher of the two scores
- The lower of the two scores (Correct answer)
- The average of the two scores
- A new credit report must be ordered
Correct answer: The lower of the two scores
When only two scores are available, the lower of the two is used as the qualifying score per Fannie Mae and Freddie Mac guidelines.
Question 2: What is a 'rapid rescore' and when would a mortgage processor request one?
- A process to dispute fraudulent accounts across all three bureaus simultaneously
- An expedited update to credit bureau records that reflects recent payoffs or corrections, improving the score quickly (Correct answer)
- A request to the lender to waive minimum credit score requirements
- An automatic score recalculation done every 30 days by FICO
Correct answer: An expedited update to credit bureau records that reflects recent payoffs or corrections, improving the score quickly
A rapid rescore allows a mortgage processor to submit documented account changes to the bureaus for quick score updates, often used when a borrower needs to reach a score threshold.
Question 3: Which type of inquiry on a credit report does NOT affect a borrower's FICO score?
- A mortgage application inquiry
- A hard inquiry from an auto loan application
- A soft inquiry from a pre-qualification check (Correct answer)
- A hard inquiry from a credit card application
Correct answer: A soft inquiry from a pre-qualification check
Soft inquiries, such as those from pre-qualification checks or employer background reviews, do not impact FICO scores unlike hard inquiries.
Question 4: What is the standard validity period for a residential mortgage credit report before it must be refreshed?
- 30 days
- 60 days
- 90 days
- 120 days (Correct answer)
Correct answer: 120 days
Most conventional, FHA, and VA guidelines require a new credit report if the existing one is more than 120 days old at the time of closing.
Question 5: A borrower disputes a derogatory account on their credit report during loan processing. How should the processor handle this?
- Proceed with the disputed account included in the qualifying decision
- Cancel the application until the dispute is resolved
- Follow AUS and lender guidelines — disputed accounts may need to be removed from dispute status for accurate underwriting (Correct answer)
- Ignore the dispute and close the loan
Correct answer: Follow AUS and lender guidelines — disputed accounts may need to be removed from dispute status for accurate underwriting
Accounts in active dispute status can skew AUS results because they may be excluded from scoring; underwriters typically require dispute status removed or proof the account is not the borrower's.
Question 6: What is the purpose of a Mortgage Only credit report versus a tri-merge report?
- It reports only on the current mortgage balance
- It is a single-bureau report used only for refinances
- It shows all tradelines but is issued only after loan approval
- It is a limited report pulled mid-transaction to verify no new credit has been opened (Correct answer)
Correct answer: It is a limited report pulled mid-transaction to verify no new credit has been opened
A Mortgage Only or update report is often pulled close to closing to confirm the borrower hasn't opened new credit or incurred new debt since the original tri-merge report.
CMP CMP - Certified Mortgage Processor Credit Analysis and Credit Reports Questions and Answers 2
A borrower has two scores from the tri-merge report because one bureau returned no score.
Which score is used to qualify?