Podcast
Questions and Answers
What is the primary role of a Mortgage Loan Originator (MLO)?
What is the primary role of a Mortgage Loan Originator (MLO)?
Which of the following is NOT a step in the mortgage loan origination process?
Which of the following is NOT a step in the mortgage loan origination process?
What must an individual do to legally offer mortgage loan origination services?
What must an individual do to legally offer mortgage loan origination services?
In a large mortgage banking operation, how is the loan origination process typically organized?
In a large mortgage banking operation, how is the loan origination process typically organized?
Signup and view all the answers
Which activity is NOT typically performed by loan originators?
Which activity is NOT typically performed by loan originators?
Signup and view all the answers
What role might a small mortgage lender have in the loan origination process?
What role might a small mortgage lender have in the loan origination process?
Signup and view all the answers
Which statement accurately describes a mortgage broker's operation?
Which statement accurately describes a mortgage broker's operation?
Signup and view all the answers
What is the final step in the mortgage loan origination process?
What is the final step in the mortgage loan origination process?
Signup and view all the answers
What is the main purpose of conducting a pre-qualification discussion with a borrower?
What is the main purpose of conducting a pre-qualification discussion with a borrower?
Signup and view all the answers
Which statement best describes the role of an MLO in the loan origination process?
Which statement best describes the role of an MLO in the loan origination process?
Signup and view all the answers
What constitutes a tangible net benefit for a borrower in a refinance loan?
What constitutes a tangible net benefit for a borrower in a refinance loan?
Signup and view all the answers
What is a legal requirement for lenders when assessing a borrower's ability to repay a loan?
What is a legal requirement for lenders when assessing a borrower's ability to repay a loan?
Signup and view all the answers
Which document must be provided by the lender during the pre-approval process?
Which document must be provided by the lender during the pre-approval process?
Signup and view all the answers
How does a borrower's financial situation affect the suitability of a loan?
How does a borrower's financial situation affect the suitability of a loan?
Signup and view all the answers
What does pre-qualification NOT guarantee for a borrower?
What does pre-qualification NOT guarantee for a borrower?
Signup and view all the answers
What must be considered to determine if a refinance loan has a tangible net benefit?
What must be considered to determine if a refinance loan has a tangible net benefit?
Signup and view all the answers
What does the term 'In Contract' refer to in real estate transactions?
What does the term 'In Contract' refer to in real estate transactions?
Signup and view all the answers
Which activity is typically performed by an MLO during the mortgage loan process?
Which activity is typically performed by an MLO during the mortgage loan process?
Signup and view all the answers
Study Notes
Loan Inquiry and Application Process
- Mortgage loan origination is the creation of a mortgage loan.
- A Mortgage Loan Originator (MLO) takes applications and negotiates loan terms for compensation. Licensing is required for state-regulated lenders/brokers.
- Loan origination methods vary based on company size: one person, small lender with multiple roles, or large banking operation with specialized teams.
- The process can be divided into application, processing, underwriting, closing, and servicing stages.
Application
-
MLOs are the initial point of contact, handling loan inquiries and applications. They may be called loan officers, brokers, or MLOs.
-
Responsibilities:
- Provide loan options information.
- Process applications. This includes reviewing contracts, entering applicant data into Loan Origination Systems (LOS) and Automated Underwriting Systems (AUS).
- Explain loan programs and processes.
- Help determine loan suitability by comparing borrower finances to loan terms.
- Verify borrower's ability to repay legally, not based on initial payments or collateral value.
- Ensure suitability in refinances by evaluating tangible net benefit to the borrower (e.g., lower payments, interest rates, term, loan type).
- Provide accurate and timely disclosures.
- Gather information, contact consumers, evaluate applications, and assist with closing.
- Negotiate credit terms with consumers (and sometimes lenders).
- Promote applications.
-
Loan requests occur before application; consumers seek loan program information and approval prospects.
-
Pre-qualification:
- Discussion between borrower and MLO for a basic loan approval estimate.
- Uses income, assets, and credit data.
- No commitment to lend.
- Requires disclosures if a credit decision is expected.
-
Pre-approval:
- Requires a complete mortgage application.
- Lender requests credit reports and verifies income/assets.
- Lender issues pre-approval in writing, subject to property conditions.
- Full credit decision, and a commitment to lend (with restrictions).
- Similar steps to a full application process, including disclosures and HMDA reporting.
-
Real estate sale transactions start when terms are in writing ("In Contract").
-
Lenders are not obligated under sale contracts, but have a fiduciary responsibility to support financing for the borrower.
Studying That Suits You
Use AI to generate personalized quizzes and flashcards to suit your learning preferences.
Description
This quiz covers the stages of mortgage loan origination, including application, processing, underwriting, and closing. Learn about the roles of Mortgage Loan Originators and their responsibilities in guiding borrowers through the loan application process. Test your understanding of how loan inquiries are handled and the methods used by different lending institutions.
