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The U.S. Mortgage Industry Trivia Quiz

I searched and searched for any quiz relating to the mortgage industry and found not a single one, so here we go. Most questions are easy and relate to basic practices/principles of American mortgage lending.

A multiple-choice quiz by weimaraner. Estimated time: 4 mins.

Author
weimaraner

Time
4 mins

Type
Multiple Choice

Quiz #
240,442

Updated
Mar 27 22

# Qns
10

Difficulty
Average

Avg Score
7 / 10

Plays
838

Last 3 plays: Guest 35 (9/10), camdug (7/10), Guest 64 (6/10).

One at a Time - Single Page - Timed Game

Question 1 of 10

1. What is the actual abbreviation for 'Fannie Mae'? Hint

FHA

FNMA

HUD

NEXT>

Question 2 of 10

2. If a borrower's home is worth $100,000 and they wish to borrow $80,000 then the loan-to-value is 20%.

Yes

NEXT>

Question 3 of 10

3. What is the abbreviation that we derive the term 'Ginnie Mae' from? Hint

GNMA

GNA

GNME

NEXT>

Question 4 of 10

4. When dealing with U.S. government loans, what does VA stand for? Hint

Veterans Administration

Veterans Accommodations

Variable Account

Virginia

NEXT>

Question 5 of 10

5. This one isn't pronounced as it sounds. What is the abbreviation for the more common term 'Freddie Mac'? Hint

FMC

FHA

FHC

FHLMC

NEXT>

Question 6 of 10

6. What is the term for the person assisting the homebuyer/borrower in the loan process, from origination through to closing? Hint

Loan Officer

All of these

Loan Consultant

Loan Agent

NEXT>

Question 7 of 10

7. What is the more common numerical term for the FNMA main application filled out by the borrower(s)? Hint

1003

442

1004

NEXT>

Question 8 of 10

8. The form 1003, is also known as the 'URLA'. What does that stand for? Hint

Unconventional Realty Loan Application

Underwriter Residential Loan Approval

Uniform Residential Loan Application

Universal Residential Loan Application

9. After consulting the borrower(s) on their needs and pre-qualification, the Loan Officer will then pull a credit report for his/her borrower(s) which produces three individual FICO scores. Which FICO score is most commonly used to qualify the borrower(s)? Hint

The high score

The average of the three scores

The Trans Union score

The middle score

NEXT>

Question 10 of 10

10. As the loan officer, if your borrower wanted his/her payment to remain the exact same amount every month for the life of his/her loan, what kind of loan would you set that person up on? Hint

2/28 Interest Only ARM

5/1 Libor ARM

30/15 Balloon

30-year fixed

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Most Recent Scores

Nov 22 2024 : Guest 35: 9/10
Nov 18 2024 : camdug: 7/10
Nov 13 2024 : Guest 64: 6/10
Sep 25 2024 : Guest 49: 7/10

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Quiz Answer Key and Fun Facts

1. What is the actual abbreviation for 'Fannie Mae'?

Answer: FNMA

If you try and pronounce FNMA as a word it comes out sounding like Fannie Mae. FNMA is the term for conventional non-government loans and is short for Federal National Mortgage Association. FHA stands for Federal Housing Administration and HUD stands for the Department Of Housing And Urban Development.

2. If a borrower's home is worth $100,000 and they wish to borrow $80,000 then the loan-to-value is 20%.

Answer: No

It would be 80% loan to value (LTV). You find out the loan to value ratio by dividing the loan amount by the appraised value of the home.

3. What is the abbreviation that we derive the term 'Ginnie Mae' from?

Answer: GNMA

If you try and pronounce GNMA as a word it comes out sounding like Ginnie Mae. GNMA handles FHA and VA loans. It stands for Government National Mortgage Association.

4. When dealing with U.S. government loans, what does VA stand for?

Answer: Veterans Administration

VA in the mortgage world specifically stands for Veterans Administration. The abbreviation for Virginia is indeed VA in the general sense, and Veterans Accommodations doesn't exist.

5. This one isn't pronounced as it sounds. What is the abbreviation for the more common term 'Freddie Mac'?

Answer: FHLMC

FHLMC stands for Federal Home Loan Mortgage Corporation and it was created in 1970 to develop a secondary market for conventional mortgages.

6. What is the term for the person assisting the homebuyer/borrower in the loan process, from origination through to closing?

Answer: All of these

And there are many other titles that could be applied. Loan Officer is the most typical one of the four, however some mortgage bankers/brokers believe 'officer' to be too strong of a word and subconsciously scaring away potential clients.

7. What is the more common numerical term for the FNMA main application filled out by the borrower(s)?

Answer: 1003

65 is actually the lesser-used Freddie Mac version of the same form, and 442 and 1004 are standard form numbers for appraisals.

8. The form 1003, is also known as the 'URLA'. What does that stand for?

Answer: Uniform Residential Loan Application

It took a long time for the mortgage industry to come up with one standardized form. Once they did, it became 'uniform' hence the Uniform Residential Loan Application was born.

Answer: The middle score

While there are a few lenders that will take the high score or some combination/alternate method of evaluating the borrower's credit, the most common way is by taking the middle of the three scores to qualify a borrower for any particular loan.

10. As the loan officer, if your borrower wanted his/her payment to remain the exact same amount every month for the life of his/her loan, what kind of loan would you set that person up on?

Answer: 30-year fixed

The 30-year fixed loan is the most stable loan program a borrower can be on. There are also 15 year-fixed, 40 year-fixed and few other less-common ones out there, but the term 'fixed' is the operative word. A 30/15 balloon is stable for the first 15 years, but at the 15-year mark the borrower now owes the entire mortgage balance in one shot.

A 5/1 Libor ARM, 2/28 ARM or any other program that has ARM in it will be an 'adjustable rate mortgage' which starts out with a much more attractive rate/payment, but will fluctuate (adjust) after a certain (usually short) period of time.

Source: Author weimaraner

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