Mortgage Loan Origination Activities
This domain covers the origination workflow itself - what a licensed originator may do, what must be disclosed and when, and where the originator's role stops. It is the largest domain on the exam and the most scenario-driven.
The application and the Loan Estimate
Six pieces of information create a TRID application: borrower name, income, Social Security number (to pull credit), property address, estimated value, and loan amount. Once all six exist, the LE is due within three business days. Before the LE is delivered, the only fee you may collect is a bona fide, reasonable credit report fee.
Appraisal and closing
Appraisal independence means no pressure on the appraiser and no selection based on a target value. The borrower receives a copy of the appraisal no later than three days before closing. The CD must be received three business days before consummation; if it changes the APR beyond tolerance, a corrected CD restarts the clock.
Qualified mortgage math
General QM caps points and fees at 3% of the loan amount for loans of $100,000 or more, with tiered limits below that.
Worked example. On a $200,000 refinance the originator charges $2,000 origination, $1,000 discount points, and $1,500 broker compensation; an affiliated title agency earns $900. Total: $5,400, or 2.70%. Add a $600 credit life premium - credit insurance counts - and points and fees reach $6,000, exactly 3.00%, which still satisfies the limit. Prepaid per-diem interest and escrow deposits would not have counted.
Traps. Quoting a payment before the LE and calling it an estimate to dodge the fee rule; invoking a "changed circumstance" to reset tolerances after the borrower shops; letting a realtor or seller pressure the appraiser; delivering the CD at the closing table.