Residential Mortgage Loan Origination – Questions
And Answers
Primary Mortgage Market Right Ans - The market where borrowers and
lenders come together to create and negotiate terms of a mortgage
transaction. Includes: Commercial Banks, savings and loans associations, life
insurance companies, credit unions, non-depository mortgage companies and
private lenders
Commercial Banks Right Ans - A depository institution that provides lines
of credit and loan products
Savings and Loans Right Ans - the most important purpose of these
institutions is to make mortgage loans on residential property.
Life Insurance Companies Right Ans - are funded by premiums paid by
those insured and often concentrate their real estate lending on commercial
properties and to a lesser extent on multifamily investment properties.
Credit Unions Right Ans - non-for-profit organizations that exist to serve
their members. they accept deposits and make loans. However, as member-
owned institutions, credit unions focus on providing a safe place to save and
borrow at reasonable rates.
Mortgage Companies Right Ans - rely on commercial banks that grant
"warehouse" lines of credit to them. The loans are short term, collateralized
by the mortgage notes they fund, and are generally repaid through the sale of
these notes to the secondary market.
Private Lenders Right Ans - have a relationship with one or more loan
originators and selectively invest in mortgages that might not otherwise have
a ready buyer in the secondary market
Gift Funds Right Ans - mostly used for downpayments. Any funds provided
as a gift must be accompanied by a letter from the gifting party stating the
amount of the gift and that the gift does not need to be repaid
,Secondary Market Right Ans - A market for the purchase and sale of
existing mortgages. The secondary market is where loan originators can sell
their loans and thus recover cash for originating more loans.
Mortgage Loan Originators Right Ans - Mortgage bankers, mortgage
brokers, and correspondent lenders.
Mortgage Banker Right Ans - a company, individual, or institution that
originates mortgage loans.
Mortgage Broker Right Ans - independent contractors who offer the loan
products of multiple lenders called wholesalers.
Correspondent Mortgage Lender Right Ans - a hybrid between a traditional
mortgage banker and a mortgage broker. Correspondent mortgage lenders
originate and fund loans in their own name, then sell them off to larger
mortgage lenders, who in turn service the loans or sell them on the secondary
market.
Unique Identifier Right Ans - a number that permanently identifies each
mortgage loan originator, whether he is licensed or merely registered. It is
assigned by the protocols established by the Nationwide Mortgage Licensing
System
Secure and Fair Enforcement for Mortgage Licensing Act (SAFE Act) Right
Ans - establishes the minimum standards for state licensing of residential
mortgage loan originators to increase uniformity, improve the accountability
of loan originators, combat fraud, and enhance consumer protections.
Nationwide Mortgage Licensing System and Registry (NMLSR) Right Ans -
All Loan originators must be licensed through or registered with the NMLSR
Consumer Financial Protection Bureau (CFPB) Right Ans - A U.S.
government agency that helps protect consumers by regulating financial
products and services, like
mortgages, credit cards, and student loans.
, State-licensed Loan Originators Right Ans - An individual who takes a
residential mortgage loan application and offers or negotiates terms of a
residential mortgage loan for compensation or gain is considered a RMLO
A Federally Registered RMLO Right Ans - an individual who takes a
residential mortgage loan application and offers or negotiates terms of a
residential mortgage loan for compensation or gain.
Pre-licensing Education Right Ans - Course hours, approved by the NMLS,
that must be completed prior to submitting an initial application for a
mortgage loan originator license through the NMLS.
Uniform Residential Loan Application (URLA) Right Ans - the official
application form for all residential loans and is the central document of the
residential loan application process. It gathers all the crucial information
about the prospective borrower that the lender will need to evaluate the
applicant's creditworthiness.
Net Tangible Benefit Right Ans - a consumer protection standard against
flipping and equity stripping directed toward frequent refinancings by
unscrupulous lenders for which the borrower does not receive a net tangible
benefit from the transaction.
Employment Right Ans - analyzed to ensure that qualified income will
continue
Income Right Ans - analyzed to determine whether it is sufficient to handle
the loan payment obligations
Stable Income Right Ans - the borrower's gross monthly income from all
verifiable sources that can reasonably be expected to continue for atleast the
next three years
Employed Income Right Ans - comes from a borrower's base pay - regular
wages received by an employee from an employer on a weekly, biweekly, or
monthly basis.
And Answers
Primary Mortgage Market Right Ans - The market where borrowers and
lenders come together to create and negotiate terms of a mortgage
transaction. Includes: Commercial Banks, savings and loans associations, life
insurance companies, credit unions, non-depository mortgage companies and
private lenders
Commercial Banks Right Ans - A depository institution that provides lines
of credit and loan products
Savings and Loans Right Ans - the most important purpose of these
institutions is to make mortgage loans on residential property.
Life Insurance Companies Right Ans - are funded by premiums paid by
those insured and often concentrate their real estate lending on commercial
properties and to a lesser extent on multifamily investment properties.
Credit Unions Right Ans - non-for-profit organizations that exist to serve
their members. they accept deposits and make loans. However, as member-
owned institutions, credit unions focus on providing a safe place to save and
borrow at reasonable rates.
Mortgage Companies Right Ans - rely on commercial banks that grant
"warehouse" lines of credit to them. The loans are short term, collateralized
by the mortgage notes they fund, and are generally repaid through the sale of
these notes to the secondary market.
Private Lenders Right Ans - have a relationship with one or more loan
originators and selectively invest in mortgages that might not otherwise have
a ready buyer in the secondary market
Gift Funds Right Ans - mostly used for downpayments. Any funds provided
as a gift must be accompanied by a letter from the gifting party stating the
amount of the gift and that the gift does not need to be repaid
,Secondary Market Right Ans - A market for the purchase and sale of
existing mortgages. The secondary market is where loan originators can sell
their loans and thus recover cash for originating more loans.
Mortgage Loan Originators Right Ans - Mortgage bankers, mortgage
brokers, and correspondent lenders.
Mortgage Banker Right Ans - a company, individual, or institution that
originates mortgage loans.
Mortgage Broker Right Ans - independent contractors who offer the loan
products of multiple lenders called wholesalers.
Correspondent Mortgage Lender Right Ans - a hybrid between a traditional
mortgage banker and a mortgage broker. Correspondent mortgage lenders
originate and fund loans in their own name, then sell them off to larger
mortgage lenders, who in turn service the loans or sell them on the secondary
market.
Unique Identifier Right Ans - a number that permanently identifies each
mortgage loan originator, whether he is licensed or merely registered. It is
assigned by the protocols established by the Nationwide Mortgage Licensing
System
Secure and Fair Enforcement for Mortgage Licensing Act (SAFE Act) Right
Ans - establishes the minimum standards for state licensing of residential
mortgage loan originators to increase uniformity, improve the accountability
of loan originators, combat fraud, and enhance consumer protections.
Nationwide Mortgage Licensing System and Registry (NMLSR) Right Ans -
All Loan originators must be licensed through or registered with the NMLSR
Consumer Financial Protection Bureau (CFPB) Right Ans - A U.S.
government agency that helps protect consumers by regulating financial
products and services, like
mortgages, credit cards, and student loans.
, State-licensed Loan Originators Right Ans - An individual who takes a
residential mortgage loan application and offers or negotiates terms of a
residential mortgage loan for compensation or gain is considered a RMLO
A Federally Registered RMLO Right Ans - an individual who takes a
residential mortgage loan application and offers or negotiates terms of a
residential mortgage loan for compensation or gain.
Pre-licensing Education Right Ans - Course hours, approved by the NMLS,
that must be completed prior to submitting an initial application for a
mortgage loan originator license through the NMLS.
Uniform Residential Loan Application (URLA) Right Ans - the official
application form for all residential loans and is the central document of the
residential loan application process. It gathers all the crucial information
about the prospective borrower that the lender will need to evaluate the
applicant's creditworthiness.
Net Tangible Benefit Right Ans - a consumer protection standard against
flipping and equity stripping directed toward frequent refinancings by
unscrupulous lenders for which the borrower does not receive a net tangible
benefit from the transaction.
Employment Right Ans - analyzed to ensure that qualified income will
continue
Income Right Ans - analyzed to determine whether it is sufficient to handle
the loan payment obligations
Stable Income Right Ans - the borrower's gross monthly income from all
verifiable sources that can reasonably be expected to continue for atleast the
next three years
Employed Income Right Ans - comes from a borrower's base pay - regular
wages received by an employee from an employer on a weekly, biweekly, or
monthly basis.
