Mortgage and Borrower Essay

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Essent Guaranty Underwriting Test
Multiple Choice Questions – Please select the correct answer.
If a borrower’s paystub shows they are paid semi-monthly, how often does the borrower receive a paycheck?

Once every two weeks.
Once a week.
Twice a month.
Monthly.

If the credit report does not have a stated payment listed for a revolving account, how should the payment be calculated?

Multiply the account balance by 2%.
Multiply the account balance by 5%.
Divide the account balance by 4%.
Multiply the account balance by 3%.

When calculating the borrower’s total assets which asset type can be considered liquid?

Stock account.
401K retirement account.
Roth IRA.
Personal Savings account.

Which statement best describes a mixed use property?

A property that is utilized for commercial and residential use.
A property with a community swimming pool.
A property with a deck and a patio.
A property that has a room being used as a home theatre.

When can automobile lease payments be excluded from the borrower’s liabilities?

If there are 10 or less payments remaining.
If the lease was acquired in the last 12 months.
If the lease payment is under $200.00/mo.
In none of the above situations.

Once an IRS form 4506-T is signed by the borrower what can it be used for?

To obtain a history of the subject properties ownership.
To obtain a transcript of the borrower’s previous tax returns.
To obtain the borrower’s employment history.
None of the above.

Which person is an acceptable gift donor?

The borrower’s fit coach.
The borrower’s boss.
The borrower’s father.
The borrower’s old college friend.

What is the maximum conforming loan limit for a single unit property?

$535,000
$150,000
$417,000
$450,000

Which of the following is not one of the three national credit repositories? Kroll Data
Equifax
TransUnion
Experian

Loan Prospector (LP) is an automated underwriting system (AUS) used by which government sponsored enterprise (GSE)?

Department of Housing and Urban Development
Fannie Mae
Gennie Mae
Freddie Mac

When a borrower’s personal tax returns show “Unreimbursed Employee Expenses” what should the reviewing underwriter do?

Ignore the expenses.
Add them to the total borrower obligations.
Subtract the expenses from the borrower’s income.
None of the above.

What are the maximum financing concessions allowed on a loan with a 90% LTV?

2% of the purchase price.
10% of the purchase price.
3% of the purchase price.
6% of the purchase price.

When analyzing tax returns for a partnership which of the following items should not be subtracted from the business cash flow?

Depreciation.
Nonrecurring income.
Meals and entertainment exclusions.
All of the above.

At what LTV is a lender required to obtain private mortgage insurance?

60%
70%
80%
90%

Which of the following property types is not eligible for a mortgage?

Condominium
Single Family Detached
Timeshare
Co-operative

Appraisal form 1004/70 is also known as the______________________.

Uniform Residential Appraisal Report
Manufactured Home Appraisal Report
Individual Condominium Appraisal Report
Exterior Only Inspection Residential Appraisal Report

By how much can non-taxable income be grossed?

10%
15%
20%
25%

The Uniform Underwriting Transmittal Summary is referred to as form_____________.

1008
1003
442
1120S

Desktop Underwriter (DU) is an automated underwriting system (AUS) used by which government sponsored enterprise (GSE)?

Department of Housing and Urban Development
Fannie Mae
Gennie Mae
Freddie Mac

In what circumstance can an installment debt be excluded from a borrower’s obligations?

Less than 10 payments remaining on the account.
12 months cancelled checks are provided showing a 3rd party is responsible for the obligation.
Divorce decree says the borrower is no longer responsible for the obligation.
All of the above.
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