A Mortgage Servicer Performs All of the Servicing Functions

question 70

Multiple Choice

A mortgage servicer performs all of the servicing functions. The servicer remits all funds received on the serviced loans to the company on a monthly or other periodic basis and usually reports all transactions, including foreclosures and transactions related to foreclosed property. The contract between the company and servicer should provide that the:

• A) Company can periodically audit the servicer's records and files pertaining to the loans owned by the company. In lieu of making the audit, the company can agree to receive an annual audit report pertaining to its loans from the servicer's independent certified public accountants. This is the single audit concept
• B) Servicer should not have a fidelity bond and an errors and omission policy of stipulated minimum amounts
• C) Servicer must have a fidelity bond and an errors and omission policy of stipulated minimum amounts
• D) Servicer must have an annual independent audit, with a copy of the audited financial statements sent to the company within a certain period of time after the end of the servicer's fiscal year

Identify the roles and responsibilities of insiders and the implications of insider information under the Securities Exchange Act of 1934.

Comprehend the role of the SEC in regulating and enforcing securities laws, and the consequences of non-compliance.

Understand the role and types of mutations in genetic variation and evolution.

Recognize the mechanisms of natural and sexual selection in shaping phenotypes and population genetics.

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Definitions:

Non-Interest-Bearing Note

A financial instrument or promissory note that does not accrue interest over time, meaning the borrower repays only the principal amount.

Discount Rate

The interest rate charged to commercial banks and other financial institutions for loans received from a country's central bank.

Actual Interest Rate

The actual rate of interest earned or paid on an investment or loan, considering compounding and other factors, as opposed to the nominal rate.

Non-Interest-Bearing Note

A type of debt instrument that does not pay interest to the holder, instead being issued at a discount to its redemption value.