VirtualLending

Mortgage Industry Overview

We introduce you to general concepts of and participants in the mortgage industry. You will become familiar with mortgage jargon and terminology.

The Interview

A mortgage loan request starts with three components: the purchase and sale agreement, the mortgage loan application, and the good faith estimate. The purchase and sale agreement is a legally binding document between buyer and seller, typically negotiated by a real estate agent. You will learn what to look for and how the agreement between the buyer and seller affects the mortgage loan.

When meeting with a prospective home buyer, the loan originator is required to take a complete application and disclose the closing costs of the requested loan by means of a good faith estimate (GFE). You will learn how to complete the Uniform Residential Loan Application (URLA), following step-by-step instructions.

You can learn the practical application of federal lending regulations. You will learn what can and cannot be said to your customers about certain sensitive subjects, such as marital status, credit disclosure and the denial of a mortgage request.

The Good Faith Estimate, Truth-in-Lending Disclosure, Conventional Loan Qualification

Demonstrate the completion of a Good Faith Estimate and explains the relationship between the GFE and the Truth-in-Lending Disclosure (TIL). Although most lenders produce the TIL disclosure using a computer, this chapter provides a worksheet used to calculate the APR manually. This exercise helps the loan originator understand the components of the APR and Finance Charges, making it much easier to explain these concepts to the mortgage borrower.

Learn basic tools of the trade: P&I factor charts, and sample charts to calculate title insurance premiums, settlement fees, hazard insurance premiums, and PMI premiums.

Conforming and non-conforming conventional qualification methods are demonstrated.

FHA Loan Calculations, Qualification and Good Faith Estimate

You learn to calculate the maximum FHA loan amount and Upfront Mortgage Insurance Premium (UFMIP) for purchase transactions. The GFE exercises in this chapter demonstrate the difference between FHA and conventional loan features. You also learn to qualify the FHA borrower.

VA Qualification and Good Faith Estimate

Eligibility requirements for the VA home loan program are provided in this chapter. In addition, you learn how to calculate the VA funding fee, and the VA GFE for purchase transactions. You also learn to qualify the VA borrower.

Refinancing

Learn about the various types of refinance program for conventional, FHA and VA loans. These include the "no-cash" out, "cash-out" and "streamline" refinances. You will learn how to calculate maximum loan amounts and to complete a GFE for each program.

Credit Review and Pre-Underwriting

Learn income calculation formulas and how to extract qualifying income from a payroll stub and a Verification of Employment (VOE). In addition, you will learn the basic documentation requirements for many income sources and sources of closing funds. Credit reports, credit scoring standards, and automated underwriting systems are discussed, and an overview of appraisal requirements is provided.

Secondary Marketing

You will learn the components of the secondary mortgage market as it exists today. We demonstrate interest rate ranges, discount points and rebate pricing, and you will learn the proper way to disclose rebate pricing on the GFE.

Marketing Skills

The second step to a successful career as a mortgage loan originator is to learn how to market yourself and utilize your skills to their fullest potential. You need a sale plan, and in this chapter, we help you develop one. You learn to focus on your target market and are introduced to some of the tools that successful salespeople use.