35 Questions
What could be a consequence of not gathering the required information for the lender/investor?
The lender may end up bearing more risk than intended
How might not gathering the required information impact the equitable treatment of the borrower?
The borrower may end up with a longer mortgage term
What is a potential risk of not gathering the required information for the lender/investor?
A higher loan-to-value ratio than comfortable for the lender
What might happen if an agent/broker puts the borrower into a traditional or alternative mortgage without having all the information?
The file may be cancelled just days before funding/closing
How could not gathering the required information impact the equitable treatment of both the borrower and lender/investor?
The file may be cancelled just days before funding/closing
What is a potential consequence of not gathering all the required information for the borrower?
The file may be cancelled just days before funding/closing
How might not gathering all the required information impact the equitable treatment of both the borrower and lender/investor?
The file may be cancelled just days before funding/closing
What could happen if an agent/broker puts the borrower into a traditional or alternative mortgage without having all the information?
The file may be cancelled just days before funding/closing
What is a potential risk of not gathering all the required information for the lender/investor?
A higher loan-to-value ratio than comfortable for the lender
How could not gathering all the required information impact the equitable treatment of both the borrower and lender/investor?
The file may be cancelled just days before funding/closing
What is the purpose of creating a 'material risks statement' for the borrower?
To inform the borrower of potential risks associated with the deal
Why is it important to disclose up front to the lender/investor that the agent/broker is acting on behalf of the borrower as well?
To manage and set expectations for the lender/investor
In what situation can an agent/broker find themselves in a precarious position?
When representing both the borrower and the lender in a deal
What could be the consequence if an agent/broker fails to represent each party fairly when negotiating any terms of the deal?
The agent/broker may be held responsible if something goes wrong
What is a potential challenge if the agent/broker knows that the lender wants a lower LTV, whereas the borrower wants a higher LTV?
The agent/broker may find themselves in a precarious situation
What should be included in the 'game plan' with the borrower?
Steps outlining how to get back to a traditional or alternative lender
What is one way to create strategies to manage each party's expectations?
Create strategies that outline steps each party is prepared to take
What impact could not gathering the borrower's income, credit, and property details have on the equitable treatment of the lender?
The lender may end up funding a client who does not qualify, costing them time and money
How could incorrectly/inaccurately filing the mortgage application form impact the equitable treatment of the borrower?
It could result in days of delays and the need to resubmit to a different lender
How could not disclosing the service relationship impact the equitable treatment of the lender?
The lender could sue the brokerage for failing to disclose this information
What could be the consequence of selecting the wrong lender for both the borrower and the lender?
The borrower may end up paying higher fees and rates than necessary
How could incorrectly/inaccurately filing the mortgage application form impact the equitable treatment of the lender?
It could put the lender into a position of bearing more risk than they had intended
What is a potential outcome of not gathering all required information about the borrower's income, credit, and property details?
The borrower may end up being placed with a private lender charging additional fees
How could selecting the wrong lender impact the equitable treatment of both the borrower and the lender?
The borrower may end up paying higher fees and rates than necessary
What is a potential consequence of not disclosing the service relationship between the broker and private lenders?
The borrower could sue the brokerage for failing to disclose this information
How could not gathering all required information about the borrower's income, credit, and property details impact the equitable treatment of both the borrower and the lender?
It could lead to putting the client with a private lender charging additional fees and cost the lender time and money
What impact could incorrectly/inaccurately filing the application form have on both the borrower and the lender?
The agent/broker may end up putting the client with a private or alternative lender who charge additional fees.
What happens if the lender signs the two-day waiver (Form 1.2)?
The waiting period is reduced to one day for issuing the commitment letter
What is the consequence of not submitting the application with the required disclosures on the equitable treatment of the lender?
The lender may be agreeing to a mortgage without having all the information
How could not explaining the commitment letter to the borrower impact the equitable treatment of the borrower?
The borrower may not expect to pay lender fees, legal fees, or discharge fees at the end of the term, thereby requiring more money than they initially thought they'd need
What is a typical condition for a private lender?
Copies of credit card statements, an exit plan, appraisals (if not done in the past 12 months), drive-by inspection, MICs and some private lenders may require paystubs and employment letters
How could not fulfilling the conditions impact the equitable treatment of the lender?
The lender will have made plans with their financial institution to withdraw the money from their savings or other bank accounts to be able to fund on time
How could not supporting the closing of the transaction/file impact the equitable treatment of the borrower?
The file may not close on time; however, the lender may not change the closing date or the interest adjustment date, thereby costing the borrower additional interest
What action should be taken after receiving the commitment letter?
Take time to validate various aspects mentioned in the commitment letter
What strategy could an agent/broker use when working for both the borrower and lender to be fair in their treatment?
Propose strategies for managing/setting expectations for both the borrower and lender/investor
Test your knowledge on mortgage application requirements, forms, and the impact of not submitting the application with the required disclosures on equitable treatment of the lender.
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