Mortgage Mortgage Loan Origination Process Questions and Answers 2

Question 1

What is the primary purpose of a Loan Estimate (LE) provided to the borrower within three business days of application?

Accepted Answer

To disclose estimated loan costs, terms, and monthly payments

Answer

To lock in the interest rate for the borrower

Answer

To confirm the borrower's employment status

Answer

To finalize the appraisal value of the property

Question 2

During the origination process, which document does the loan officer use to verify a borrower's monthly debts and payment history?

Accepted Answer

Credit report

Answer

W-2 tax forms

Answer

Title commitment

Answer

Homeowners insurance binder

Question 3

What triggers a Changed Circumstance that allows a lender to revise the Loan Estimate after initial disclosure?

Accepted Answer

An unexpected title defect is discovered during the title search

Answer

The borrower requests a different paint color for the home

Answer

The loan officer decides to increase origination fees

Answer

The borrower's employer sends a standard verification of employment

Question 4

At which stage of the origination process does the underwriter typically issue a conditional approval?

Accepted Answer

After the loan processor has assembled a complete file with all verifications

Answer

Immediately after the borrower submits the initial application

Answer

Before the credit report has been pulled

Answer

During the final closing meeting with the borrower

Question 5

Which federal law requires lenders to provide a Closing Disclosure at least three business days before consummation?

Accepted Answer

TILA-RESPA Integrated Disclosure (TRID) rule

Answer

Real Estate Settlement Procedures Act (RESPA) only

Answer

Truth in Lending Act (TILA) only

Answer

Home Mortgage Disclosure Act (HMDA)

Question 6

What is the role of the loan processor in the mortgage origination workflow?

Accepted Answer

To collect, organize, and verify all borrower documentation before underwriting

Answer

To negotiate the purchase price between buyer and seller

Answer

To determine the final appraised value of the property

Answer

To record the mortgage lien with the county recorder's office