Mortgage Loan Originator Loan Underwriting and Processing 2

Question 1

Which of the following income types is typically considered 'stable' for mortgage qualification?

Accepted Answer

Two-year history of self-employment income

Answer

Unemployment benefits

Answer

Lottery winnings

Answer

One-time bonus received last month

Question 2

What is the purpose of a Verification of Employment (VOE) in the loan process?

Accepted Answer

To confirm the borrower's current employment status, position, and income

Answer

To verify the borrower's tax returns

Answer

To check the borrower's credit history

Answer

To appraise the subject property

Question 3

In underwriting, a 'layered risk' scenario means:

Accepted Answer

Multiple risk factors are present simultaneously, increasing overall loan risk

Answer

The borrower has multiple properties

Answer

The loan has more than one lien

Answer

The collateral has multiple appraisals

Question 4

What document is used to verify a borrower's income from wages and is issued by employers annually?

Accepted Answer

W-2

Answer

1099-INT

Answer

Schedule C

Answer

1040 transcript

Question 5

When qualifying a borrower using rental income, lenders typically use what percentage of gross rental income?

Accepted Answer

75%

Answer

100%

Answer

85%

Answer

50%

Question 6

What is the purpose of 'gift funds' documentation requirements in mortgage underwriting?

Accepted Answer

To confirm the funds are a true gift and not a loan that would affect DTI

Answer

To prove the gift is taxable

Answer

To verify the donor's employment

Answer

To ensure the gift is from an immediate family member only