©THESTAR 2024/2025 ALL RIGHTS RESERVED.
Mortgage Educators course Exam Questions
And Answers. Verified And Updated.
Processor and under writer - Answer✔Processor:
Collects documentation
Verifies information
Puts the file together
Underwriter:
Analyzes information to determine if the borrower qualifies for the loan
The borrower needs to provide - Answer✔Assets to close the loan such as a down payment or
closing costs. Either cash or as close to liquidity as possible
Reserves - Answer✔Money left over after transaction closes
Reserves are measured by number of months
Loan Prospector (LP) - Answer✔Which AUS system does Freddie Mac use?
Verification of Deposit (VOD) - Answer✔A document signed by the borrower's financial
institution verifying the status and balance of his/her financial accounts.
How many months of reserves are required for an investment property - Answer✔6
Two types of income - Answer✔stable and variable
Stable income includes hourly wages, base salary, social security income, other retirement funds
Variable income includes, commission sales, bonuses, overtime, self-employment income,
fluctuating hourly wages
Verification of Employment (VOE) - Answer✔A document signed by the borrower's employer
verifying his/her position and salary.
Income with a defined expiration date must show proof it will continue for at least - Answer✔3
years
Monthly income calculations - Answer✔1. Annually/12 months
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, ©THESTAR 2024/2025 ALL RIGHTS RESERVED.
2. Monthly
3. Semi monthly. X 2 = GMI
4. bi weekly. X 26/12 = GMI
5. Weekly X 52 /12 = GMI
6. Hourly
If borrower is using income from a rental property to qualify for a loan it cannot be more then -
Answer✔4 unit
Addendum for appraisal - Answer✔Single family comparable rent schedule
How many years are required of self-employment history - Answer✔2
Liabilities include - Answer✔Housing, Credit report, anything that is court order
Lease payments will always be included in liabilities, regardless of how many months are left on
the lease. - Answer✔True
Three Credit Bureaus - Answer✔Equifax, Experian, TransUnion
You look at the Tri-Merge of all three and always use the middle score
Credit scores are based on - Answer✔1. Payment history
2. Amounts owned/Credit Utilization
3. Credit mix
4. New credit
5. Credit inquires
What is the most influential factor on a credit report - Answer✔payment history
A borrower won't qualify if they have had a foreclosure within - Answer✔the last 7 years
Credit Utilization - Answer✔The ratio of your credit card balances to credit limits. This impacts
your credit score.
credit inquiry - Answer✔An item on a person's credit report that indicates that someone has
asked for a copy of the individual's report.
Fair Credit Reporting Act (FCRA) - Answer✔U.S act that protects privacy of background
information and ensures that information supplied is accurate.
Reg V, created in 1970
Federal law that regulates how credit reporting agencies use consumers information
FCRA does allow a CRA to furnish credit reports to an LO for certain acceptable circumstances
with permission from the consumer
2|Page
Mortgage Educators course Exam Questions
And Answers. Verified And Updated.
Processor and under writer - Answer✔Processor:
Collects documentation
Verifies information
Puts the file together
Underwriter:
Analyzes information to determine if the borrower qualifies for the loan
The borrower needs to provide - Answer✔Assets to close the loan such as a down payment or
closing costs. Either cash or as close to liquidity as possible
Reserves - Answer✔Money left over after transaction closes
Reserves are measured by number of months
Loan Prospector (LP) - Answer✔Which AUS system does Freddie Mac use?
Verification of Deposit (VOD) - Answer✔A document signed by the borrower's financial
institution verifying the status and balance of his/her financial accounts.
How many months of reserves are required for an investment property - Answer✔6
Two types of income - Answer✔stable and variable
Stable income includes hourly wages, base salary, social security income, other retirement funds
Variable income includes, commission sales, bonuses, overtime, self-employment income,
fluctuating hourly wages
Verification of Employment (VOE) - Answer✔A document signed by the borrower's employer
verifying his/her position and salary.
Income with a defined expiration date must show proof it will continue for at least - Answer✔3
years
Monthly income calculations - Answer✔1. Annually/12 months
1|Page
, ©THESTAR 2024/2025 ALL RIGHTS RESERVED.
2. Monthly
3. Semi monthly. X 2 = GMI
4. bi weekly. X 26/12 = GMI
5. Weekly X 52 /12 = GMI
6. Hourly
If borrower is using income from a rental property to qualify for a loan it cannot be more then -
Answer✔4 unit
Addendum for appraisal - Answer✔Single family comparable rent schedule
How many years are required of self-employment history - Answer✔2
Liabilities include - Answer✔Housing, Credit report, anything that is court order
Lease payments will always be included in liabilities, regardless of how many months are left on
the lease. - Answer✔True
Three Credit Bureaus - Answer✔Equifax, Experian, TransUnion
You look at the Tri-Merge of all three and always use the middle score
Credit scores are based on - Answer✔1. Payment history
2. Amounts owned/Credit Utilization
3. Credit mix
4. New credit
5. Credit inquires
What is the most influential factor on a credit report - Answer✔payment history
A borrower won't qualify if they have had a foreclosure within - Answer✔the last 7 years
Credit Utilization - Answer✔The ratio of your credit card balances to credit limits. This impacts
your credit score.
credit inquiry - Answer✔An item on a person's credit report that indicates that someone has
asked for a copy of the individual's report.
Fair Credit Reporting Act (FCRA) - Answer✔U.S act that protects privacy of background
information and ensures that information supplied is accurate.
Reg V, created in 1970
Federal law that regulates how credit reporting agencies use consumers information
FCRA does allow a CRA to furnish credit reports to an LO for certain acceptable circumstances
with permission from the consumer
2|Page
