Mortgage Loan Origination Activities
Mortgage loan origination activities
This domain covers the workflow: application, processing, underwriting, closing, and servicing. Questions test sequencing, disclosure triggers, verification standards, and servicing transfer rules.
Application and processing
An application is complete for TRID when it contains six items: borrower name, income, Social Security number, property address, estimated value, and loan amount. Processing verifies income, assets, employment, and title, and orders the appraisal. Changed circumstances require timely re-disclosure.
Underwriting and closing
Underwriting applies ATR/QM standards: consider and verify income, assets, employment, credit, debt-to-income ratio, and reserves, and document the file. Closing requires the CD 3 business days before consummation and a correct settlement statement. Rescission applies to refinances.
Servicing
RESPA/Reg X requires a transfer-of-servicing notice at least 15 days before transfer; the payment cannot be treated as late for 60 days after transfer. Servicers must follow error-resolution and information-request procedures, perform escrow analyses, and follow loss-mitigation rules.
Worked example
A borrower applies Monday with all six pieces. The processor orders verifications Tuesday; the underwriter approves Friday; closing is set for next Thursday. The CD must be delivered by Monday, three business days before Thursday, not on Thursday. If the APR changes beyond tolerance after the CD, a revised CD with a new 3-day waiting period is required. On transfer, the new servicer must honor the 60-day late-fee protection.
Traps
- Starting the LE clock before the six pieces are present.
- Treating pre-approval as a complete application.
- Missing the separate CD and rescission clocks.
- Ignoring servicing-transfer notice timing.