Uniform Residential Loan Application Overview
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Questions and Answers

What is another name for the Uniform Residential Loan Application (URLA)?

  • Form 1004
  • Freddie Mac Form 75
  • Fannie Mae 1003 (correct)
  • HUD-1 Settlement Statement

    • Which of the following is NOT a purpose of the current standardized version of the URLA?

  • To provide a standard process for all lenders.
  • To streamline the loan application process.
  • To be easily understood by consumers.
  • To present a risk profile that is not easily seen by lenders. (correct)

    • Who initially completes the Borrower Information Section of the URLA?

  • The underwriter
  • The loan officer
  • The borrower (correct)
  • The lender

    • Why is accuracy of the URLA application so important?

    <p>It is the foundation for a smooth loan process. (D)</p> Signup and view all the answers

    Which action is MOST critical when helping a borrower complete the URLA application?

    <p>Ensuring the accuracy of the information. (B)</p> Signup and view all the answers

    What is a consequence of an incorrect social security number on a URLA?

    <p>It may lead to difficulties in securing a credit report. (C)</p> Signup and view all the answers

    Which of the following is NOT a part of the of personal information requested in section 1a of the URLA?

    <p>Employer address and contact information. (C)</p> Signup and view all the answers

    When determining marital status on the URLA, what should the MLO do?

    <p>Ask the applicant if they are married, unmarried, or separated. (A)</p> Signup and view all the answers

    Which section of the Uniform Residential Loan Application (URLA) includes information about the borrower's current employer, length of employment, and income breakdown?

    <p>Section 1b (D)</p> Signup and view all the answers

    If a borrower's current employment is less than two years, what additional information is required on the URLA?

    <p>Previous employer information for the past two years. (A)</p> Signup and view all the answers

    In which section of the URLA would a borrower declare they intend to use the property as a secondary residence, not their primary home?

    <p>Section 5a (C)</p> Signup and view all the answers

    Which of the following is NOT typically considered an acceptable source for gift funds, when applying for a home loan?

    <p>A business associate of the borrower (A)</p> Signup and view all the answers

    What type of information is collected in Section 7 of the URLA form?

    <p>Military service history (D)</p> Signup and view all the answers

    If a borrower has a dispute about information on their credit report, which of the following is true?

    <p>Credit bureaus are required to investigate and resolve disputes. (A)</p> Signup and view all the answers

    When a borrower applies for a purchase transaction, where is the anticipated PITI for the subject property included?

    <p>Section 3a, Real Estate (B)</p> Signup and view all the answers

    According to the URLA, what is the meaning of 'principal occupancy'?

    <p>The property that the borrower considers their primary place of residence. (C)</p> Signup and view all the answers

    Which section of the Uniform Residential Loan Application (URLA) requires a borrower to acknowledge the potential consequences of misrepresenting information?

    <p>Section 6: Acknowledgements and Agreements (D)</p> Signup and view all the answers

    What is the purpose of Section 8 on the URLA, in compliance with HMDA?

    <p>To gather demographic information about the borrower. (A)</p> Signup and view all the answers

    When is previous employer information mandatory on the URLA form?

    <p>If the borrower's current employer position is for less than 2 years. (C)</p> Signup and view all the answers

    What type of information is found in section 2b of the URLA?

    <p>Anticipated proceeds from the sale of real estate or non-cash assets (D)</p> Signup and view all the answers

    In addition to credit cards, loans, and leases what items are included in Section 2c (Liabilities) of the URLA?

    <p>Liabilities that are reported to the credit bureau that auto-fill (C)</p> Signup and view all the answers

    Which section of the URLA collects information about any gifts or grants the borrower has received?

    <p>Section 4d: Gifts or Grants (C)</p> Signup and view all the answers

    Which of these options is NOT considered an 'other source of income' in section 1e of the URLA?

    <p>Savings Account Balance (B)</p> Signup and view all the answers

    Flashcards

    URLA

    The Uniform Residential Loan Application is a mortgage loan form used by various lenders.

    Purpose of URLA

    It standardizes the loan application process for borrowers and lenders.

    Components of URLA

    The form consists of Borrower Information and Lender Loan Information sections.

    Section 1: Borrower Information

    Gathers personal details including name, address, and SSN.

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    Importance of Accuracy

    Accuracy in the URLA is crucial to avoid loan processing issues.

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    Joint vs. Individual Application

    It's important to verify if the application is joint or individual when filling out the form.

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    Common Loan Types

    The URLA is used for conventional, VA, FHA, and USDA loans.

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    Digital vs. Paper

    The URLA can be completed in both digital and paper formats by the borrower and MLO.

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    Employment Details

    Information about current employer, position, and income breakdown.

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    Previous Employment

    Information about prior employers if current employment is less than 2 years.

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    Other Income Sources

    Additional income like alimony, child support, or capital gains that can be considered for repayment.

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    Financial Assets

    Values of deposit accounts, retirement accounts, and investment assets available for down payment.

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    Liabilities

    Debts including credit cards, loans, and leases that must be reported.

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    Credit Report Disputes

    Process to resolve inaccuracies in the credit report affecting credit scores.

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    Other Liabilities

    Additional financial obligations like alimony or job-related expenses not included elsewhere.

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    Property Ownership

    Information about the properties owned by the borrower, including their value and intended use.

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    Loan Information

    Details about the loan and subject property including address, type, and loan amount.

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    Rental Income

    Income derived from properties the borrower owns and rents out.

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    Gifts or Grants

    Monetary help received for the transaction from acceptable donors.

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    Occupancy Intent

    Borrower's stated intention regarding living in the property (primary, secondary, investment).

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    Declaring Finances

    Attestation of the borrower's financial history including foreclosures and delinquencies.

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    Military Service Info

    Section collecting details on the applicant's military background.

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    Demographic Information

    Data on ethnicity, sex, and race collected under HMDA regulations.

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    Study Notes

    Uniform Residential Loan Application (URLA)

    • The URLA (Fannie Mae 1003/Freddie Mac Form 65) is a standardized mortgage loan application form used for conforming and non-conforming loans.
    • It's required for FHA, VA, USDA, and conventional loans.
    • The 2021 version aims for streamlined, user-friendly application, clear risk profile presentation, and digital/paper completion options.
    • Accuracy is crucial. Errors can hinder credit report access, income calculations, and loan amount determinations.

    URLA Sections

    • Section 1: Borrower Information

      • 1a: Personal Information: Name, address, Social Security Number (SSN), date of birth, contact info, joint/individual application. (Ask, don't assume about joint/separate applications and marital status)
      • 1b: Employment & Income: Current employer details, employment length, position, income breakdown, self-employment status.
      • 1c & 1d: Additional Employment: Previous employer information if current employment is less than 2 years.
      • 1e: Other Income Sources: Alimony, child support, capital gains, trusts, VA compensation, etc; borrower chooses if these are considered repayment sources.

    • Section 2: Financial Information – Assets & Liabilities

      • 2a: Assets: Deposit accounts, retirement, investments, accessible funds for down payment.
      • 2b: Other Assets: Proceeds from other real estate sales.
      • 2c: Liabilities: Credit cards, installment loans, debts from credit bureaus, leases. Liability and credit report comparison is a crucial element. Note that the application and credit report comparison are crucial and borrowers may dispute credit report inaccuracies. Credit bureaus must investigate disputes. If an error is found, fair treatment for the borrower is essential.
      • 2d: Other Liabilities: Alimony, child support, job-related expenses, etc.

    • Section 3: Financial Information – Real Estate

      • 3a: Owned Properties: Owned property details (value, costs, intended occupancy, and associated income). Loan type (FHA, VA, conventional) is recorded here. Purchase transaction's PITI is included in the debt-to-income (DTI) calculation.
      • 3b & 3c: Additional Properties: If applicable.

    • Section 4: Loan & Subject Property Information

      • 4a: Loan & Property Details: Property address, type, value, intended occupancy; loan amount, purpose.
      • 4b: Additional Mortgages: Include subordinate loans (e.g., piggyback).
      • 4c: Rental Income: If applicable.
      • 4d: Gifts/Grants: Funds from specific acceptable donors (not limited to relatives, but includes nonprofits, employers, federal/state/local agencies, and others). Documentation of gift source and transfer verification is essential, particularly if the gift is from an individual.

    • Section 5: Declarations

      • 5a: Property Details: Occupancy intent, relationship with seller, undisclosed loans/transactions, and potential liens . Intended occupancy is critical to program eligibility and pricing (primary, secondary, investment).
      • 5b: Borrower Finances: Previous foreclosures, bankruptcies, judgments, delinquencies on federal debt, pending lawsuits, and undisclosed co-signers/guarantors.

    • Section 6: Acknowledgements & Agreements

      • Borrower acknowledges application accuracy, property as loan security, appraisal use limitations, record-keeping agreements, reporting and debt counseling in case of delinquency, and authorization for application info use for processing and servicing.

    • Section 7: Military Service: Information pertaining to the borrower's military service history.

    • Section 8: Demographic Information: Ethnicity, sex, race (per HMDA Regulation C); applicants can withhold, but MLOs are required by Federal law to collect the info based on observation in those cases.

    • Section 9: Loan Originator Information: Completed by the loan originator. Includes detailed information and signature/date.

    • Additional Forms:

      • Additional Borrowers
      • Unmarried Addendum (for use with unmarried applicants)
      • Continuation Sheet
      • Supplemental Consumer Information Form (required for applications submitted on or after March 1, 2023) – Includes language preference and previous homebuyer education/counseling.

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    Description

    This quiz focuses on the Uniform Residential Loan Application (URLA), specifically its importance, sections, and details required for mortgage loans. Understand borrower information, income details, and the significance of accuracy in the application process. Ideal for those looking to navigate the URLA effectively.

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