Mortgage Loan Originator (MLO) Licensing Practice Test

Fannie Mae Form 1005 is specifically designed to authorize lenders to verify employment and payroll information provided by a borrower. This form works as a key tool in the loan underwriting process, allowing lenders to confirm details such as income, employment status, and other related payroll data necessary to determine the borrower's ability to repay the mortgage loan.

This verification is crucial for assessing the borrower's financial stability and capacity to meet monthly mortgage obligations. The detailed payroll information validates the salary, bonuses, and other forms of compensation, contributing to a comprehensive understanding of the borrower's financial situation.

While bank account balances, property ownership details, and loan application history are important factors in the mortgage loan process, they are not the specific focus of Form 1005. Thus, the emphasis of the form on payroll information makes it the correct choice in this context.