On our certification quiz, we ask a few questions about loan documents. For more detailed information, query our courses, but these are going to be quick pointers that we often quiz about.
The Deed of Trust / Mortgage
This document is the security instrument. It also goes over prepayment penalties and late fees. It goes over the address of the Lender and the Borrower as well as a lot of other information which we do not quiz on.
This document contains the general terms or general business terms of the loan. It is the best place to look for information about prepayment penalties, when the first payment is due, loan amount, and other general terms of the loan.
The Right to Cancel
As a Signing Agent, you must know how to date a Right to Rescind or Right to Cancel. For a home owner borrower, they are given three days not including Sundays and Federal holidays. Please do not say three business days as the days are calendar days not business days, but not including Sunday, Federal Holidays, or the date of the signing. The borrower can cancel up to midnight on the third day to rescind and can cancel in writing.
This document has a lot of quick information on certain information about the loan, fees and payoffs. Although it mentions that you will or will not have a prepayment penalty, it does not go over the terms of the prepayment penalty.
First Payment Letter
This document goes over information regarding the first payment due.
This document goes over maintenance issues regarding the subject property as well as occupancy status and other information about the property.
This document states that the borrower will move into the subject property within sixty days and will stay there as a primary residence for a year, or possibly two years or six months in some cases depending on how the document was drafted. I have only seen this document state a one year occupancy requirement in my experience.
This document makes the borrower agree to furnish additional information to the lender if requested after the signing. It also makes the borrower agree to cooperate if the Lender needs changes to clerical errors signed off on by the borrower.
Correction Agreement LPOA
This document has the borrower give consent to let the Lender / Title make changes to clerical and typographical errors to the documents on their own after the signing
1003 Residential Loan Application
This document typically has lots of information about the borrower including how many years of school they had, and other personal information. It is typical for this document to have clerical errors, however, those errors do not affect the final status of the loan.
The APR is typically higher than the rate as it includes some of the fees and closing costs and is compounded.
The information in this section have to do with frequently asked questions. This information in this section is brief, and does not constitute a thorough knowledge of loan documents, but this is typically what we ask about in our over the phone quiz, so please learn this material well.>