Uniform Residential Loan Application Quiz
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Questions and Answers

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

  • Fannie Mae 1003 (correct)
  • FHA Application Form
  • USDA Mortgage Application
  • VA Loan Request

Which component is NOT part of the URLA?

  • Borrower Information
  • Lender Loan Information
  • Borrower Income Verification
  • Loan Repayment Terms (correct)

Why is accuracy particularly important in the URLA?

  • It dictates the number of application forms needed.
  • It affects the processing of the applicant's credit report. (correct)
  • It influences the choice of loan type.
  • It determines the loan interest rate.

What information is specifically NOT included in Section 1a of the Borrower Information component of the URLA?

<p>Employment history (A)</p> Signup and view all the answers

What key aspect should an MLO focus on when assisting borrowers with the URLA?

<p>Ensuring accuracy in application details. (D)</p> Signup and view all the answers

In what formats can the URLA be completed?

<p>Both digital and paper formats (C)</p> Signup and view all the answers

What aspect of the URLA is essential during the initial application process?

<p>Identifying potential issues early (D)</p> Signup and view all the answers

What must a borrower indicate about their application type in Section 1a of the URLA?

<p>If it is a joint or individual application (D)</p> Signup and view all the answers

What is required if a borrower's current employment is less than two years?

<p>Information about previous employment (B)</p> Signup and view all the answers

Which of the following sources can be considered as other income for borrowing purposes?

<p>Stock dividends (C)</p> Signup and view all the answers

What type of liabilities are automatically filled in the application from the credit report?

<p>Installment loans (C)</p> Signup and view all the answers

What type of occupancy refers to a property that is considered a primary residence?

<p>Principal occupancy (D)</p> Signup and view all the answers

Which of the following can be considered a source of gifts or grants in the loan process?

<p>Federal Agencies (B)</p> Signup and view all the answers

What does PITI stand for in the context of loan qualifying?

<p>Principal, Interest, Taxes, Insurance (D)</p> Signup and view all the answers

If disputed information on a credit report is proven inaccurate, what is the lender required to do?

<p>Ensure fair consideration for the borrower (B)</p> Signup and view all the answers

What does the term 'acknowledgements and agreements' refer to in the application process?

<p>Borrower's agreement on property condition terms (D)</p> Signup and view all the answers

What must be reported if the borrower has previously filed for bankruptcy?

<p>Whether the bankruptcy was dismissed or discharged (B)</p> Signup and view all the answers

Which type of assets should be included in assessing a borrower's financial capability?

<p>Retirement accounts and investments (C)</p> Signup and view all the answers

In which section would a borrower report their existing properties?

<p>Loan and Subject Property Information (C)</p> Signup and view all the answers

What is one of the consequences a borrower acknowledges when signing the application?

<p>Responsibility for accurate information (A)</p> Signup and view all the answers

Which of the following agencies are not acceptable donors for gifts related to loans?

<p>Independent Contractors (C)</p> Signup and view all the answers

Flashcards

What is the URLA?

A standardized form used for applying for a mortgage loan, commonly used by Fannie Mae, Freddie Mac, FHA, VA, and USDA.

What information is collected in the URLA's 'Borrower Information' section?

The URLA requires borrowers to provide their personal information, including name, address, SSN, date of birth, and contact information. It also specifies whether the application is individual or joint.

Why is accuracy crucial in the URLA?

Accuracy is essential in the URLA as even a small error, like an incorrect SSN, can hinder the credit report retrieval process and create delays.

What are the two main components of the URLA?

The URLA consists of two main components: the 'Borrower Information' section and the 'Lender Loan Information' section.

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What is the primary goal of the URLA?

The URLA's purpose is to provide a clear picture of the borrower's financial situation and risk profile to the lender.

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Who is the URLA designed for?

The URLA is designed to be easy to use for both borrowers and mortgage loan officers (MLOs).

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What types of loans use the URLA?

The URLA is used for conforming conventional and government loans and is often used for non-conforming loans.

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How can the URLA be completed and who fills out each section?

The URLA can be completed digitally or on paper and includes sections for both the borrower(s) and the MLO to fill out.

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Employment Information

Information on the borrower's current and previous employment. Includes details like employer's name and address, length of employment, position held, income breakdown, and self-employment status.

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Assets

Details about the borrower's assets, including deposit accounts, retirement funds, investments, and funds readily available for the down payment.

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Liabilities

Information on the borrower's liabilities, such as credit cards, installment loans, debts, and non-real estate leases.

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Real Estate Information

Information about the borrower's existing properties, like property value, associated costs, intended occupancy (primary, secondary, or investment), and any income generated from the property.

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Loan and Property Information

Details about the loan and the subject property, such as the property address, type, value, occupancy intentions, loan amount, and loan purpose.

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Other Mortgages

Information on any additional mortgages on the subject property, including second mortgages or subordinate loans.

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Gifts or Grants

Information about any gifts or grants received or to be received by the borrower in connection with the transaction.

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Declarations

Statements from the borrower confirming their intentions and acknowledging specific facts related to the loan.

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Borrower Finances

Information on any past foreclosures, bankruptcies, judgments, delinquencies on federal debts, pending lawsuits, or undisclosed co-signer or guarantor obligations.

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Acknowledgements and Agreements

The borrower acknowledges the application is complete and understands the consequences of misrepresentation. They also agree to the terms of the loan and the use of their personal information.

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Military Service

Information about the applicant's U.S. military service, past or present.

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Demographic Information

Information about the borrower's ethnicity, sex, and race. This is required by the Home Mortgage Disclosure Act (HMDA) to track lending patterns.

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Loan Originator Information

Details about the loan originator, who is the mortgage loan officer facilitating the loan process.

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Piggyback Second Mortgage

A secondary mortgage, often used in conjunction with a primary mortgage to finance a larger loan amount.

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Intended Occupancy

The applicant's intent for using the property, whether it is their primary residence, a vacation home, or an investment property.

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Study Notes

Uniform Residential Loan Application (URLA)

  • URLA (Fannie Mae 1003 or Freddie Mac Form 65) is a standard mortgage loan application form used for conforming, government, and non-conforming loans.
  • The 2021 version is standardized, user-friendly, and streamlines the process, providing a clear risk profile for the lender.
  • Digital and paper formats are accepted; borrower and Loan Originator (MLO) complete respective sections
  • Accuracy is crucial; MLOs must work with borrowers to ensure correct data. Errors (e.g., SSN) can cause problems (e.g., credit report).
  • Accurate initial application is essential for smooth processing and early identification of potential issues.

URLA Components and Sections

  • Borrower Information (Section 1):

    • 1a: Personal Information: Name, address, SSN, DOB, contact details, joint/individual application. Marital status should be verified.
    • 1b: Employment and Income: Current employer name, address, employment length, position, income details (breakdown), self-employment status.
    • 1c & 1d: Previous Employment (if applicable): Required if current employment is less than two years.
    • 1e: Other Income Sources (if applicable): Alimony, child support, capital gains, trust, VA compensation, etc.

  • Financial Information (Assets & Liabilities - Section 2):

    • 2a: Assets: Deposit accounts, retirement funds, investments, readily available down payment funds.
    • 2b: Other Assets: Proceeds from selling other real estate, proceeds from selling non-cash assets, earnest money deposits, employer assistance.
    • 2c: Liabilities: Credit cards, installment loans, debts, non-real estate leases (reported through credit bureau autofill); compare reported liabilities with credit report. Resolve credit report disputes as needed.
    • 2d: Other Liabilities (if applicable): Alimony, child support, job-related expenses.

  • Financial Information (Real Estate - Section 3):

    • 3a: Property Owned: List any owned properties (first listed if refinance). Value, costs, occupancy purpose, rental income (if investment). PITI (Principal, Interest, Taxes, Insurance) is included in debt-to-income ratio.
    • 3b & 3c: Additional Properties: Additional properties as necessary.

  • Loan & Property (Section 4):

    • 4a: Loan & Property Info: Address, type, value, intended occupancy, loan amount, and purpose.
    • 4b: Additional Mortgages: Subordinate loans (piggyback second mortgage).
    • 4c: Rental Income: Rental income associated with the property.
    • 4d: Gifts & Grants: Gifts and grants connected to the transaction; verify donor information and funds.

  • Declarations (Section 5):

    • 5a: Property Info: Occupancy intent, relationship with seller, undisclosed loans, other transactions, pending liens.
    • 5b: Borrower Finances: Foreclosures, bankruptcies, judgments, delinquencies, pending lawsuits, co-signers/guarantors.

  • Acknowledgements & Agreements (Section 6):

    • Consequences of misrepresentation, property as security for loan, appraisal use details, record-keeping agreements, reporting credit info, possible counseling.

  • Military Service (Section 7): Information about applicant's U.S. military service.

  • Demographic Information (Section 8): Ethnicity, sex, race, per HMDA (Home Mortgage Disclosure Act).

  • Loan Originator Information (Section 9): Completes MLO details along with signature and date.

  • Additional Forms: Additional Borrowers form, Unmarried Addendum, Continuation Sheet, Supplemental Consumer Information Form (for language preference, and homebuyer education details).

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Description

Test your knowledge of the Uniform Residential Loan Application (URLA), focusing on its components, importance, and accuracy during the mortgage loan process. This quiz covers key sections and best practices for both borrowers and Loan Originators in completing the application.

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