Examice

Exam CRCM All QuestionsBrowse all questions from this exam

Question 299

First National Bank sold several of its mortgage loans to individual investors and now services the loans for the individuals. First National Bank collects more than

$600 on most of these mortgages and deposits the money into the account of the investors. At the end of each year, First National Bank sends the investors a summary of transactions on the mortgages and a detailed breakdown of the principal and interest payments made. Who is responsible for filing the mortgage interest information returns?

The investors, because they own the loans and the money is collected for them

The investors, because they have the necessary information from the servicer

First National Bank, because it was the first owner of the loans

First National Bank, because it collects the interest and has the information necessary to file the information return

Correct Answer: D

First National Bank is responsible for filing the mortgage interest information returns because it services the loans, collects the interest payments, and has the necessary information regarding the transactions. The servicer of the loans is typically responsible for filing such returns, not the investors who own the loans.

Discussion

Cam22Option: D

As the servicer of the mortgage loans, First National Bank is responsible for filing the mortgage interest information returns. This is because it collects the interest payments and maintains the necessary information regarding the loans and payments. Option C is incorrect because the responsibility for filing the information returns typically lies with the entity that collects the interest payments, regardless of whether they were the original owner of the loans. Options A and B are incorrect because, although the investors own the loans, First National Bank, as the servicer, is the entity responsible for managing the loans and handling the interest payments, making it responsible for filing the information returns.