Direct serving loans method requires a system of good internal control and requires that the functions be split between the Accounting Department and the Investment Department. The Investment Department is responsible for promptly supplying the Accounting Department with:
A. Accounting data on new loans
B. Resolving few exceptions reported to it by the Accounting Department, i.e., when a borrower defaults on a loan payment
C. Data related to changes in existing loans, which affects the accounting function
D. Alerting the Investment Department promptly whenever an exception to the normal processing routine occurs
It indicates the lender's commitment to make a loan in accordance with the terms specified either in the borrower's loan application or in the terms the company approves for the loan.
A. Verification of deposits
B. Commitment letter
C. Appraisal
D. Original note
Direct serving loans method requires a system of good internal control and requires that the functions be split between the Accounting Department and the Investment Department. In such a case the Accounting Department is responsible for all of the following EXCEPT:
A. Supplying the Investment Department with correct data and reports that summarize all loan transactions
B. Alerting the Investment Department promptly whenever an exception to the normal processing routine occurs
C. The design, maintenance, and accuracy of accounting records, for periodic management and exception reports, and for statutory statement preparation
D. Its records may or may not provide the needed data to support this reporting function
Subsequent to the funding of a loan, the most common document/s obtained is/are:
A. New or updated appraisals as evidence of the current value of the property
B. Current financial statements on the borrower or the property, if the property is income producing, as evidence of the borrower's continuing financial strength and of the property's continuing ability to produce income
C. Periodic inspection reports as evidence of the physical condition of the property
D. Borrower's financial statements
During the underwriting process, information related to a mortgage loan is collected, and this information is the basis for a final decision as to whether or not the loan should be made. The documents generated during this underwriting process are all of the following EXCEPT:
A. Loan applications
B. Credit reports
C. Borrower's financial statements
D. Periodic inspection reports
Evidences the fair market value of the property that is security for the mortgage loan. The appraisal value is used to determine that the loan to market value ratio is in compliance with regulatory requirements. It also is used to determine any non-admitted mortgage loan amount. Appraisals are obtained from:
A. Independent, qualified appraisers
B. The company's own qualified appraisers
C. Federal Housing Administration
D. Any one out of A and B
________ allow investments to be made, up to a certain percent of invested or total admitted assets, in assets that do not otherwise meet regulatory requirements. If their domiciliary jurisdiction regulations have a this, a life insurer with a business purpose for doing so can make a limited amount of mortgage loans that do not meet regulatory requirements without a reduction in surplus. However, some jurisdictions do exercise some extraterritorial jurisdiction related to it.
A. Loan application
B. Basket clause
C. Underwriting agreement
D. None of these
These are the loans in which: Arrangement is usually called commitment When the structure is completed and put in service, the loan is paid off from the proceeds of the long term financing, whatever its source Proper controls would require the lender to obtain documentation for the disbursed portion of the construction loan and be assured that the cost of the structure to date is equivalent to the disbursed portion of the construction loan. What are these?
A. Undeveloped Land Loans
B. Construction Loans
C. Development Loans
D. Residential Loans
Federal Housing Administration:
A. Agency does not make loans; it only insures them. For this protection the borrower must pay an annual insurance premium to the FHA of 0.5 percent of the outstanding principal amount of the loan
B. Agency does not make loans; upon default, the lender has the option either of assigning the mortgage to the FHA and receiving cash and/or securities equal to the loan amount at the date of the default or of foreclosing on the mortgaged property
C. Establishes standards for property that can not be insured and maximum terms, interest rates, and amounts for the insured loans
D. All of these
_________________ is a special variation on a second mortgage. In this form, the new lender assumes the original or first mortgage and has the responsibility of collecting all payments and remitting a portion of these payments to the first lender.
A. Conventional Residential Loan
B. FHA loan
C. Wrap-around loan
D. VA loan
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