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CRU Exam 3 Questions And 100% Correct Answers
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CRU Exam 3 Questions And 100% Correct AnswersWhich of the following is a disadvantage of VA loans? - Answer Sellers prefer other
types of financing due to costs they have to pay
Jim and Alice will sell their classic automobile for the requisite down payment of
$15,000. They list the asset on the application. All of the documentation below is
required for their Caution mortgage EXCEPT which one? - Answer Third-party valuation
Choose all that apply. Anything adverse to the property which the appraiser must
consider and comment on may include - Answer 1. Hazardous substances
2. Asbestos contamination
Which of the following is one category of property type for which LPA provides? -
Answer Manufactured Home Single-Family
According to Fannie Mae, for a self-employed borrower, income must be documented
with a ____-year earnings history. - 2 years ANSWER
Choose two. Which of the following describe S corporations? - Answer 1. Stockholders
pay taxes at individual rates based on share of income/loss.
2. They are state-chartered legal entities with a limited number of stockholders (not
more than 100) that elect to be taxed as a partnership.
In a partnership business structure the partnership pays taxes, much like a corporation.
- Answer False
Income of a sole proprietor from the U.S. Individual Income Tax Return Form 1040 is
reported on which of the following tax schedules? - Answer Schedule C (Form 1040),
Profit or Loss from Business
,What tax form is used to report income, deductions, gains, losses, etc., from the
operations of a partnership to the IRS? - Answer 1065
ACP Accounting For Dummies When analyzing tax returns, all of the following are added
back in order to income EXCEPT which one? - Answer Recurring cash expenses
The Cash Flow Analysis Form 1084 is used to analyze and adjust income from tax
returns to determine qualifying income. - Answer True
Form 1125-E, Compensation of Officers - if the total receipts on Form 1120 are $500,000
or more, can be used to determine the borrower's percentage of ownership interest.
Answer True
Choose three. Which of the following are determined by the legal structure of a
business? Answer 1. The ability of the business to accumulate capital
2. How income or loss is reported to the Internal Revenue Service
3. How taxes are paid to the Internal Revenue Service
When underwriting self-employed borrowers, Fannie Mae and Freddie Mac both require
verification of the existence of the business within how many calendar days prior to the
note date? - Response 120
Which schedule indicates whether a partner is a general partner or a limited partner? -
Response Schedule K-1
Which of the following are ALWAYS required when manually underwriting a loan for
Freddie Mac with a borrower who is a sole proprietor where the business has been in
existence less than five years EXCEPT? - Answer ?Current balance sheet and profit and
loss statement?
Loans to Borrowers Who Are Sole Proprietors of Their Own Business For loans to
borrowers who are sole proprietors of their own business, how many months'
self-employment income must be documented to use that income for qualifying
, purposes? - Answer Twelve
Select three. Which of the following can be used to identify the borrower's percentage of
ownership interest in a corporation? - Answer 1. Form 1125-E
2. Schedule G (Form 1120)
3. Letter from the corporate accountant
/Based on the review of a borrower's corporate returns, how would you handle
nonrecurring other income appearing on line 10 of the Form 1120 in the Form 1084? -
Answer It would be subtracted from income.
A company has non-deductible travel and meal expenses in the Schedule C. How would
you handle the account properly for cash flow purposes? (Non-deductible Meals and
Entertainment Expenses on Form 1084) - Answer Subtract it from income.
Select three. A lender is underwriting a loan application for a self-employed borrower.
Which of the following must occur before income can be calculated? - Answer 1.
Business structure has been determined
2. Underwriting method has been determined
3. Documentation requirements have been determined
Which IRS form, that provides permission for the IRS to release information, do Fannie
Mae and Freddie Mac require as part of the documentation requirements for a
self-employed borrower? - Answer 4506-T
Mortgages, notes, and bonds payable in less than one year should be ______________ the
business income unless there is evidence these obligations roll over regularly. - Answer
Subtracted from
Income from partnerships is taxed at: - Answer Individual tax rates
Which of the following loan programs and/or types must be submitted through one of the
agencies' automated underwriting systems? - Answer Affordable Merit Rate mortgages
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