Mortgage Loan Origination Activities
What this domain tests
Origination questions follow the loan from application through funding: disclosures, processing, underwriting coordination, rate locks, closing, and fraud awareness. The exam tests sequencing and documentation.
Core rules
- Application stage: Collect the six TRID items, then issue the Loan Estimate. Provide the servicing disclosure, ECOA notice, HMDA data request, and appraisal copy rights. Obtain the borrower's intent to proceed before charging fees other than a permissible credit report fee.
- Processing: Verify income, assets, employment, title, and insurance; order the appraisal; track underwriting conditions; keep a complete loan file.
- Rate locks: Use a written lock agreement stating the rate, period, and extension terms. If lock terms change, re-disclose as required.
- Closing: Deliver the Closing Disclosure at least three business days before consummation. Compare it with the Loan Estimate for tolerance violations and cure any increase.
- Fraud red flags: Altered pay stubs, undisclosed debts, straw buyers, false occupancy statements, inflated appraisals, and pressure to close before verification.
Worked example
A borrower locks for 45 days on May 1, and closing slips to June 20. The lock expires June 15. The lender may offer an extension for a fee. If the fee is a new cost, it must appear on a revised Closing Disclosure. If the increase violates a tolerance, the lender may need to cure it. The originator must not tell the borrower the rate remains locked after expiration.
Traps
Ordering the appraisal before disclosures; accepting oral verification without documents; promising a closing date before underwriting; ignoring a changed circumstance; failing to document borrower intent to proceed.