Mortgage Administration and Investor Communication

Play an AI-generated podcast conversation about this lesson

What is a critical step in the transaction process for the borrower?

Lender submission

Meeting conditions

Completing the borrower's application (correct)

Disclosure

What is the purpose of completing a Know Your Client form in the initial consultation with a potential private investor?

To provide the investor with investment options.

To determine the viability of the investor as a private lender. (correct)

To discuss potential returns on investments.

To obtain confirmation of income from the investor.

Why is it important to gather documents like income confirmation and documentary evidence during the initial consultation with a potential private investor?

To assess the investor's credit score.

To confirm the availability of funds for lending. (correct)

To analyze the profitability of the broker's investments.

To verify if the investor has no other investments.

Which step is essential from a compliance standpoint in the transaction process?

Lender submission (D) Signup and view all the answers

What is one of the main steps in the initial consultation process?

Discussing options (C) Signup and view all the answers

What is the purpose of having a confidentiality agreement in place with a potential private investor?

To prevent any investment disclosure to the public. (A) Signup and view all the answers

Why is confirming identity important in the initial consultation?

To comply with regulations (A) Signup and view all the answers

Why should a potential private investor be provided with a summary of an investment before receiving full borrower information?

To allow the investor to make an informed decision about proceeding further. (C) Signup and view all the answers

What type of documents should be requested if the funds being invested are on deposit at a financial institution?

A recent account statement from that institution confirming the information provided. (C) Signup and view all the answers

When should obtaining consent to pull a credit report ideally take place?

During underwriting process (C) Signup and view all the answers

Why is it important to discuss the risk profiles of different investments with a potential private investor during the initial consultation?

To assess the compatibility of investments with the investor's risk tolerance. (D) Signup and view all the answers

What is a primary purpose of completing a borrower needs' analysis during the initial consultation?

Providing a starting point for the agent/broker (D) Signup and view all the answers

When should the licensee determine the investor's decision to renew the mortgage?

Three to four months prior to the end of the term (A) Signup and view all the answers

What type of information should be shared with the investor if obtained post funding?

Information about borrower's falsified documents (D) Signup and view all the answers

How should the licensee handle information received from the borrower that impacts the investor?

Share it with the investor promptly (C) Signup and view all the answers

What should the licensee do if the borrower indicates inability to make a payment?

Offer a solution to prevent default (C) Signup and view all the answers

Why is early communication with the investor important?

To provide sufficient time for appropriate decisions (B) Signup and view all the answers

What should be included in ongoing communication with the investor?

New information and any information post funding (B) Signup and view all the answers

What is a key document helpful to determine the suitability of a potential investor?

Know Your Client form (C) Signup and view all the answers

In what circumstances must both the borrower and private investor have their own lawyer?

Mortgage over $75,000 (C) Signup and view all the answers

What should be done if the investor has a preferred lawyer?

Obtain the lawyer's information (B) Signup and view all the answers

What type of ongoing communication should a licensee have with the investor about their investment?

Monthly progress reports on the investment (C) Signup and view all the answers

Who typically pays for the lawyer's fee in a private mortgage transaction?

Borrower (B) Signup and view all the answers

What is the purpose of analyzing the borrower’s credit?

To identify which lenders may approve the application (C) Signup and view all the answers

Why is it recommended for an investor to have a lawyer experienced in private mortgages?

To be familiar with private lending practices (B) Signup and view all the answers

Besides an appraisal, what tool can a licensee use to estimate an applicant’s property value?

Purview Report (B) Signup and view all the answers

Is a borrower liable for broker fees if they back out of a transaction after signing the borrower disclosure?

No, disclosure documents are not legally binding (B) Signup and view all the answers

What does it mean to 'meet conditions' in a lender's commitment letter?

To fulfill all requirements listed by the lender before funding the mortgage (D) Signup and view all the answers

Which of the following is NOT a condition that may need to be met before funding a mortgage?

Advising the borrower on financial planning (D) Signup and view all the answers

What is one of the risks associated with using a private lender based on the text?

Higher interest rates (A) Signup and view all the answers