Loan Estimate (LE) - ANS A document delivered or mailed to customers by a lender within 3 business days of mortgage application. The _______ ______ provides an estimate of closing costs and fees as well as the loan terms.
Appraisal Independence Requirements (AIR) - ANS Prohibit a mortgag...
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CHAMPIONS SCHOOL OF
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,Loan Estimate (LE) - ANS A document delivered or mailed to customers by a lender within 3
business days of mortgage application. The _______ ______ provides an estimate of closing
costs and fees as well as the loan terms.
Appraisal Independence Requirements (AIR) - ANS Prohibit a mortgage lender, broker, or a
real estate agent or broker pressuring an appraiser to reach certain value in conjunction with an
appraisal of real property.
K
Periodic Rate Cap - ANS Is a limitation on how much an interest rate can be adjusted from
one period to the next.
C
Interest Rate - ANS Is payment from a borrower to a lender of an amount above repayment of
the principle sum (that is, the amount borrowed), at a particular rate, The amount of interest
charged expressed as a percent.
LO
Closing Disclosure Form (CD) - ANS A mortgage document that sums up the terms of the
loan and what the borrower will pay at closing. The creditor is generally required to ensure that
the consumer receives the ______ _________ no later than three business days before
consummation of the loan.
YC
Recission - ANS A legal procedure that cancels, terminates or annuls a contract and returns
the parties to their original position.
Non-Conforming Loan - ANS A loan unable to be sold to Fannie Mae or Freddie Mac - it does
not meet loan limit or borrower guidelines
D
FHA 203 B - ANS FHA insured program for the purchase or refinance a new or existing
one-to-four family home
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FHA 203B - ANS A government insured loan program for the purchase or refinance of a 1-4
family residential property
ST
Upfront Mortgage Insurance Premium (UFMIP) - ANS An insurance payment required for all
FHA loans that is typically financed into the mortgage loan amount or paid by the customer in
cash at closing
Prime Rate - ANS The rate that banks charge to their preferred customers - often used as a
basis for ARM's
Deed - ANS A conveyance or document used to transfer ownership of real property from one
person to another
,Cost of Funds Index (COFI) - ANS An index that is used to determine interest rate changes
for certain adjustable-rate mortgages (ARMs). It represents the weighted-average cost of
savings, borrowings and advances of the 11th District members of the Federal Home Loan Bank
of San Francisco.
Power of Attorney - ANS A legal document authorizing one person to act on behalf of another
- it can grant complete authority or be limited to specific acts or to a specific time period.
Authorized User - ANS Someone authorized by the original credit card holder to use the
holder's card.
K
Dodd-Frank Wall Street Reform and Consumer Protection Act - ANS The landmark
legislature representing a sweeping restructuring of United States financial regulation in
C
response to the worst financial crisis in the United States since the Great Depression.
Liabilities - ANS A party's financial obligations including long-term and short-term debts and
LO
other financial commitments
Lock-In - ANS A lender's promise that a quoted interest rate will remain in effect for a set
number of days from the date of loan application
YC
Servicing Released - ANS A stipulation in the agreement for the sale of mortgages in which
the seller is not responsible for loan administration.
Survey - ANS A diagram of a property detailing boundaries, easements, encroachments,
rights of way, improvement locations, etc., prepared by a licensed surveyor
D
Gift Letter - ANS A written explanation, signed by the individual giving the gift, stating that
money was given to a homebuyer as a gift without any obligation to repay it.
U
Metes and Bounds - ANS A legal description of a parcel of land based on a surveyor's
findings of measurements and angles.
ST
Due on Sale Clause - ANS A clause in a loan requiring the loan to be repaid when the
property is sold
Credit Repair Companies - ANS Private enterprises whose services claim to help consumers
with credit, debt repayment problems, and credit reports/scores
Co-borrower - ANS An additional party responsible for loan repayment - a co-borrower is
listed on the title
, Cash Reserves - ANS Cash that a borrower will have after the loan closing. ______
__________ may be required as part of the loan process, so the borrower has financial flexibility
after the closing.
Total Debt to Income Ratio - ANS The percentage of an individual's income that must be used
to make debt payments and mortgage payments, including insurance and taxes. This ratio is
commonly evaluated when an individual applies for a mortgage loan.
IRS Form 1099 - ANS An Internal Revenue Service Form that reports income from self
employment earning, interest and dividends, and government payments
K
Condotel - ANS A residential complex of individually owned units that are rented out as
vacation properties or hotel rooms.
C
Borrower - ANS A person who receives funds in the form of a loan with an obligation to repay
the principal balance with interest.
LO
Loan Officer - ANS A representative of a lending or mortgage company responsible for
soliciting homebuyers, qualifying and processing loans - also called Residential Mortgage Loan
Originators (RMLO's)
YC
Stated Income/Stated Asset Mortgage (SISA) - ANS A type of reduced documentation
mortgage program that allows the borrower to state on the loan application what their income
and assets are without verification by the lender - used by borrowers whose income is
commission based, rather than based on a salary
First-Time Homebuyer - ANS An individual who hasn't owned a home previously.
D
Inquiry - ANS A request by a mortgage lender for a consumer's credit report information from
a credit reporting agency
U
Owner's Policy - ANS A policy of title insurance that protects the buyer from title defects
ST
Patriot Act Disclosure - ANS This disclosure informs the consumer that federal law requires
all financial institutions to obtain, verify and record information that identities each person who
opens an account to help the government fight the funding of terrorism and money laundering
activities.
Residual Income - ANS The money left over from earnings after debts are paid. Typically,
residual income is analyzed in terms of one month's income and debt requirements; the level of
one's residual income is a factor that lenders consider when evaluating a borrower;s
creditworthiness. VA loans are residual income to qualify.
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