Section 876 IAC 2-14-6 - Residential loan underwritingAuthority: IC 25-34.1-2-5
Affected: IC 25-34.1-5
Sec. 6.
(a) The competency and instructional level for initial interview and loan application is Level 3. (Note: the applicability of the underwriting procedures listed below to all three (3) major types of residential loans (conventional, FHA, and VA) should be discussed in some depth.)(b) The competency and instructional level for subdivisions (1) through (4) is Level 3. The following are concepts of borrower analysis: (1) Credit characteristics (history).(2) Adequacy of assets (to close the transaction).(3) Stability of income (employment).(4) Adequacy of income. (Students should be afforded extensive practice in applying these ratios. Acceptable income/expense ratios.)(c) The competency and instructional level for subdivisions (1) through (2) is Level 3. The following are concepts of property analysis: (1) Appraisal (determination of market value). (Note: The subject of property valuation (appraisal) is covered separately in section 10 of this rule.)(2) Status of title (title examination).(d) The competency and instructional level for subdivisions (1) through (4) is Level 3. The following are concepts of loan analysis: (1) Loan-to-value ratio. (Students should be able to perform basic calculations.)(2) Interest rate/discount points. (Students should be able to compute "yield" and dollar amount of points.)(4) Availability of mortgage insurance (or guaranty).(e) The competency and instructional level for underwriting decision and loan commitment is Level 3 (including firm, conditional, and takeout commitments).Indiana Real Estate Commission; 876 IAC 2-14-6; filed Dec 1, 1989, 5:00 p.m.: 13 IR 669; errata filed Jun 2, 1998, 11:33 a.m.: 21 IR 3940; readopted filed Jun 29, 2001, 9:56 a.m.: 24 IR 3824; readopted filed Jul 19, 2007, 12:57 p.m.: 20070808-IR-876070067RFA