General Mortgage Loan Origination
General mortgage loan origination
This domain tests the origination workflow from inquiry to funding: application, disclosures, documentation, underwriting, appraisal, title, insurance, escrow, closing, and servicing transfer. It also tests how an originator documents ability to repay and avoids misrepresentation.
Core workflow
- Application: collect the six pieces (borrower name, income, Social Security number, property address, estimated value, loan amount). A complete application starts TRID timing.
- Disclosures: Loan Estimate, servicing disclosure, special information booklet, and closing disclosures at required times.
- Underwriting: verify income, assets, employment, credit, debts, and property value. Ability-to-repay requires consideration of income and assets, employment, monthly payment, loan term, simultaneous loans, mortgage-related obligations, debt-to-income ratio, and credit history.
- Property: the appraisal must be independent; title and insurance must meet investor and legal requirements; escrow and impound rules depend on loan type and exemptions.
- Closing: Closing Disclosure review, right of rescission for refinances, funding, and recording.
Worked example
A borrower says she makes $9,000 per month but provides one pay stub showing $4,500 biweekly and no verification of bonus income. The MLO may not use the stated $9,000 to qualify. The file must document a stable income source; unverified bonus or overtime is generally excluded unless the lender has a documented analysis showing likely continuation.
Traps
Treating a prequalification as an application; charging application fees before the Loan Estimate; ordering an appraisal before the borrower has received the Loan Estimate and indicated intent to proceed; ignoring rescission on a refinance; and using stated income on a covered loan.