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Free Financial AFE Exam Questions (page: 4)

Page 4 of 59
PDF with 286 Questions

Evidences the fair market value of the property that is security for the mortgage loan. The appraisal value is used to determine that the loan to market value ratio is in compliance with regulatory requirements. It also is used to determine any non-admitted mortgage loan amount. Appraisals are obtained from:

  1. Independent, qualified appraisers
  2. The company's own qualified appraisers
  3. Federal Housing Administration
  4. Any one out of A and B

Answer(s): D



During the underwriting process, information related to a mortgage loan is collected, and this information is the basis for a final decision as to whether or not the loan should be made. The documents generated during this underwriting process are all of the following EXCEPT:

  1. Loan applications
  2. Credit reports
  3. Borrower's financial statements
  4. Periodic inspection reports

Answer(s): D



Subsequent to the funding of a loan, the most common document/s obtained is/are:

  1. New or updated appraisals as evidence of the current value of the property
  2. Current financial statements on the borrower or the property, if the property is income producing, as evidence of the borrower's continuing financial strength and of the property's continuing ability to produce income
  3. Periodic inspection reports as evidence of the physical condition of the property
  4. Borrower's financial statements

Answer(s): A,B,C



It indicates the lender's commitment to make a loan in accordance with the terms specified either in the borrower's loan application or in the terms the company approves for the loan.

  1. Verification of deposits
  2. Commitment letter
  3. Appraisal
  4. Original note

Answer(s): B



Direct serving loans method requires a system of good internal control and requires that the functions be split between the Accounting Department and the Investment Department. In such a case the Accounting Department is responsible for all of the following EXCEPT:

  1. Supplying the Investment Department with correct data and reports that summarize all loan transactions
  2. Alerting the Investment Department promptly whenever an exception to the normal processing routine occurs
  3. The design, maintenance, and accuracy of accounting records, for periodic management and exception reports, and for statutory statement preparation
  4. Its records may or may not provide the needed data to support this reporting function

Answer(s): D



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