30 Questions
What is a critical step in the transaction process for the borrower?
Completing the borrower's application
What is the purpose of completing a Know Your Client form in the initial consultation with a potential private investor?
To determine the viability of the investor as a private lender.
Why is it important to gather documents like income confirmation and documentary evidence during the initial consultation with a potential private investor?
To confirm the availability of funds for lending.
Which step is essential from a compliance standpoint in the transaction process?
Lender submission
What is one of the main steps in the initial consultation process?
Discussing options
What is the purpose of having a confidentiality agreement in place with a potential private investor?
To prevent any investment disclosure to the public.
Why is confirming identity important in the initial consultation?
To comply with regulations
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.
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.
When should obtaining consent to pull a credit report ideally take place?
During underwriting process
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.
What is a primary purpose of completing a borrower needs' analysis during the initial consultation?
Providing a starting point for the agent/broker
When should the licensee determine the investor's decision to renew the mortgage?
Three to four months prior to the end of the term
What type of information should be shared with the investor if obtained post funding?
Information about borrower's falsified documents
How should the licensee handle information received from the borrower that impacts the investor?
Share it with the investor promptly
What should the licensee do if the borrower indicates inability to make a payment?
Offer a solution to prevent default
Why is early communication with the investor important?
To provide sufficient time for appropriate decisions
What should be included in ongoing communication with the investor?
New information and any information post funding
What is a key document helpful to determine the suitability of a potential investor?
Know Your Client form
In what circumstances must both the borrower and private investor have their own lawyer?
Mortgage over $75,000
What should be done if the investor has a preferred lawyer?
Obtain the lawyer's information
What type of ongoing communication should a licensee have with the investor about their investment?
Monthly progress reports on the investment
Who typically pays for the lawyer's fee in a private mortgage transaction?
Borrower
What is the purpose of analyzing the borrower’s credit?
To identify which lenders may approve the application
Why is it recommended for an investor to have a lawyer experienced in private mortgages?
To be familiar with private lending practices
Besides an appraisal, what tool can a licensee use to estimate an applicant’s property value?
Purview Report
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
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
Which of the following is NOT a condition that may need to be met before funding a mortgage?
Advising the borrower on financial planning
What is one of the risks associated with using a private lender based on the text?
Higher interest rates
This quiz covers the essential components of ongoing communication with investors in mortgage administration, including new information disclosure and notice of term expiry. Test your knowledge on best practices in maintaining investor relationships.
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