Free Mini Practice Exam

Conforming loans follow the underwriting guidelines of Fannie Mae and Freddie Mac. This is directly stated in the provided correct answer.

A straw borrower is someone who uses their identity to apply for a loan without intending to use or reside in the property, often for a fee or other compensation.

Acceleration in mortgage terms refers to the lender's right to demand immediate repayment of the entire loan balance under certain conditions, such as default.

The down payment is 30% of the purchase price. 30% of $595,000 is $178,500.

Under Fannie Mae/Freddie Mac guidelines, national origin cannot be considered in the mortgage underwriting process as it would violate fair lending laws.

When a lender denies a mortgage loan, they must provide an adverse action notice to the applicant, explaining the reasons for denial as required by the Equal Credit Opportunity Act and the Fair Credit Reporting Act.

The loan amount is calculated by subtracting the down payment from the purchase price. The down payment is 30% of $435,000, which is $130,500. Subtracting this from the purchase price gives a loan amount of $304,500.

Semi-monthly pay means the officer is paid twice a month. Multiplying $3,800 by 2 gives a monthly income of $7,600.

Cell phone service payments are generally not considered a debt when evaluating credit obligations for a mortgage. The other options are considered debts.

Under Regulation Z, Phil has a right of rescission that allows him three business days to change his mind after signing the loan documents for refinancing his principal residence.