A9

Step 1: The decision to lend can be viewed as evaluating the "three c's". What are they? (hint: search the three c's of credit"). Keep it simple, just focus on the three c's (not lists with 5+) Step 2: Just arrange the following list (i.e. "Data Verification") under one of the three "c's". 1. Property valuation (appraisal) 2. Financial statements 3. Assets 4. Liabilities 5. Deposits 6. Employment 7. Salary/Income 8. Credit reports Step 3: Write not more than one complete paragraph for each "c" summarizing why that particular "c" is important to the underwriting process. There should only be three paragraphs for this step three. Exercises: #1: Using the loan qualifying ratios presented on page 194 for a conventional loan, what is the required gross monthly income (income before taxes and other withholdings) given required for a 300,000 loan, 6%, 360 months AND the other expenses listed below. I have created and attached a worksheet you can use by inputting the key information. The inputs are in highlighted yellow" and the calculations are highlighted "light grey". I suggest that you save the a copy of the worksheet just in case you input by error. It will calculate for you. Property Taxes $300/m Homeowners Ins. $ 40/m HOA $20/m Car Payment $400/m A) Will a gross monthly income of $7,500/m qualify? If not, which ratio(s) does not meet the requirements? B) What if the loan amount is $250,000 instead of $300,000 and the gross month income is $6,750? #2: Search "12 CFR 1026.42" and then also go to the FNMA website ("www.Fanniemae.com") and search "Appraiser Independence Requirements" reposted 4/17". Can the selection of an appraiser used be assigned by anyone in the loan origination group/department? Explain the reasoning. Instructions: You must complete the assignment using either Microsoft Word or a nich text file and should always save a file of your work to your local drive. Post your typewritten assignment using the Assignments Tab of Canvas when you are ready to submit. Click Submit to attach and finish