NMLS Test Prep (Latest 2023-2024 Update)
A borrower receives $1,000 per month in rental income. How much of the income may
be used to qualify the
... [Show More] borrower for a loan?
A. $1,000
B $800
C $750
D $1,250 - ANS-$750
The answer is $750. Generally, 75% of rental income may be used to qualify a borrower
for a loan. This formula is based on an industry standard that taxes, insurance, and
maintenance costs will equal about 25% of the income that a property generates. In this
case, 75% × $1,000 = $750.
The S.A.F.E. Act applies to mortgage loan originators who take applications for, or offer
or negotiate terms of, residential mortgage loans, which would include:
Land to be used for agricultural purposes
An apartment building with 30 units
A dwelling not secured by a mortgage or trust deed
A mobile home to be used as a residence, even if it is not attached to the land - ANS-A
mobile home to be used as a residence, even if it is not attached to the land
The S.A.F.E. Act defines a mortgage loan originator as an individual who takes
residential mortgage loan applications, or offers or negotiates terms of residential
mortgage loans for compensation or gain. The S.A.F.E. Act's definition of "residential
mortgage loan" includes a loan secured by a consensual security interest on a dwelling
and cross-references the definition of the term "dwelling" in the Truth-in-Lending Act
(TILA). Regulation Z, which implements TILA, defines a dwelling as a residential
structure that contains one to four units, whether or not that structure is attached to real
property. The term includes an individual condominium unit, cooperative unit, mobile
home, and trailer, if it is used as a residence.
What is Freddie Mac's automated underwriting system called?
Desktop Originator
Underwriter Assistant
Loan Product Advisor
AUS - ANS-Loan Product Advisor
Freddie Mac's automated underwriting system is called Loan Product Advisor (formerly
known as Loan Prospector), while Fannie Mae's is called Desktop Underwriter.
Which of the following contains only items which should be used in calculating a
borrower's debt-to-income ratio?
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