NMLS
borrower can see hud1 settlement
1 day before settlement
time to bring respa 8 and 9 lawsuits
1 year
LPMI
Lender Paid Mortgage Insurance. Insurance paid by the lender instead of the borrower. This is accomplished by the lender increasing the mortgage interest rate.
What are the LTV percentages for standard/conventional ARM loans?
Owner occupied: * 1 family - 90% * 2 family - 90% * 3 to 4 family - 80% Second home: n/a Investment: n/a Non res perm alien: 75%
calculation for monthly income required for loan payment and current debt load
PITI plus monthly recurring debt, divided by the back ratio.
poc
Paid outside of closing. charges that were paid outside of closing.
PMI
Private mortgage insurance. required when LTV is greater than 80%. Annual premiums are .5%.
covered account
a credit acount with defered payment.
deed in lieu
a deed given by a morgager to stisfy a debt
warranty deed
a deed in which the grantor warrants that good title is being conveyed.
trust deed
a document where a specific financial interest in title to real property is transferred to a trustee, which holds the deed as security for a loan .
entitlement of va program
a dollar amount tha can be used to buy a house.
loan originator fees
a fee charged to lenders to cover loan processing costs, often equl to 1 percent of the value of a loan
mortgage banker
a firm that conducts mortgage lending activitie from its own funds
hud 1 closing statement
a form that shows all charges imposed on borrowers
lien
a legal claim of a creditor to a property as security for a debt
nonconforming mortgage loan
a loan in which does not conform with fnmae or freddie mac
seasoning
a loan which several payments has been collected
closing agent
a person or org that has a fiduciar responsibility to see that terms of contract are carried out.
bankruptcy
a person relieved of debts, after the surrender of all assets to a court appointed trustee. chapter 7 covers liquidation of businesses. chapter 11 covers reorg of buisinesses. chapter 12 covers farms. chapter 13 covers individuals.
straw borrower
a person who may or may not exist
defeasance clause
a promise by lender to give the borrower all interest in a proeprty once the loan is paid in full
survey
a property inspection that determines the proision of a tract of land
index
a refularly published rate, indpenednt of the lending institution, that measures the cost of funds
respa affiliated business arrangement disclosure
a required disclosure when the consumer is referred to a business which the referring party has 1% or more interest . gives an estimate of the second providers charges, and informs the borrower they are not requried to use the reffered provider.
entitlement
a right due an individual. used with VA loans
service transfer statment
a statement issued when servicers transfers the servicing of a loan
ecoa adverse action
a statement of reasons is due customer
initial escrow statement
a statment that itemizes the estimated taxes, insurance premiums and other charges anticipeted to be paid from the escrow account durning the first 12 months of the loan. lender has 45 days from settlement to deliver it.
earnest money
a sum of money given to bind a sale of real estate.
payment buydown
a third party pays part of the PITI so borrower has a smaller payment
qualified written request
a written inquiry regaring escrow account made under respa section 6
URLA
Uniform residential loan application. 1003.
VA guaranteed loan
VA guarantees the repayment of morgage loan, granted vets. Low or no down payment requried.
certificate of reasonable value
Va's version of an appraisal
what is an acceleration clause
a clause giving lender the poer to declare loan due
due on sale
a clause in a morgage stating that if the morgager sells then the morgagee can accelerate loan.
mortgagee clause
a clause that may be attached to an insurance policty stipulating that the lender will receive a portion of insurance proceeds suffient to satisfy the unpaid amount of a loan in the event of loss.
under fcra, what must mlo provide to applicant upon taking adverse action
a clear notice of their right to obtain disclsoure regarding the nature of the information used to make the decision by making written request within 60 days of notification.
right of recission
a consumer has a right of rescission in any transaction in which security interst is given in the consumers primary residence(HELOC) except new construction.
cfpb
consumer financial protection bureau. responsible for regulating the financial industry.
farmers home administration
an agency within the department of agriculture that provides financing to farmers
buy sell agreement
an agreement between an interim and permanent lender for the sale of a mortgage to the the permant lender upon the completion of a building
commitment
an agreement, between a lender and borrower to loan money
discount point
an amount payable to buy down the rate
GFE
an estimate of all costs associated with a mortgage. 10 days minimum good.
treasury bill index
an index based on rate being paid for treasury bills
silent second mortgage
an unrecorded second lien.
api
annual percentage interest.
APR
annual percentage rate. expresses the annual cost of borrowing as a percentage of teh loan amount. it factors the interst rate and fees associated with the loan.
what is a financial institution under graham leach bliley
any kind of financial compnay.
nontraditional loan
any loan other than a 30 year fixed loan
respa 's definition of things of value
any payment, andvnce, funds, loan , service, or other consideration.
investor
any person who invests
nontraditional mortgage product
anything other than a 30 year fixed
ecoa notice required at
application
documents used to determine collateral forunderwriter
appraisal, survey, title search, plat maps
fannie mae recs from du
approve and eligible approve and ineligble refer and eligible refer and inelgible refer with caution
what are trigger points for section 32 loans under TILA
apr exceeds 8 points onf first. 10 on second. 8 points fees.
section 35 hpml of reg z tila
apr exceeds average prime offer rate by 1.5 percent for a 1st lien, or a 3.5 for a second lien.
fair market value
arms length transaction between willing buyer and willing seller
where can lawsuits for violations of RESPA section 6,8,9 be filed?
at any federal district court in the districtin which the property is located.
when must mlo provide mortgage servicng transfer disclsoure to loan applicatn
at time of application
cert of occupancy
authorization of municiplaity allowing a newly built building to be occupied
FHA AUS
automated underwriting system. morgtgage score card
loans exempt from respa
business loans, vacant land, large tracts of land 25 acres or more, certain loan assumptions. construction only loans. governments
truth in lending disclosure
costs of loan
what sorts of documents are used to determine a borrowers character
credit repeorts, bankruptcy papers, letters of explanation
ecoa evidence of disparate impact
equal application of policy that results in an adverse impact on applicants from a protected group.
ECOA
equal credit opportunity act. overseen by consumer financial protection bureau (CFPB)
security doc
establishes real proeprty as collatoeal for a loan
valuation
estimate of a properties price thorugh apprisal
under writer
evaluates whether or not to makea particular loan
hpa
homeowner protection act A law passed by congress in 1999 which requires lenders to cancel private mortgage insurance once the LTV reaches 78% of the original property value. One exception is with FHA loans, which require mortgage insurance to be in place for 5 years.
national association of mortage brokers
honest, professional conduct, honesty in ads, confidentiality, compliace with law, disclosure of financial interests.
hud
housing and urban development.
tax certificates
issue by taxing authorities to closing agent to verify taxes due are paid at clsoding. taxes are included in closing costs
FBI fraud warning
it is illegal for aperson to make any false statement...
calculate rental income
monthly income x .75
mbs
mortgage backed security. investment instruments bundled and sold on wall street
conventional financing
mortgage financing which is not insured or gauranteed by a governmental agency
settlement services
mortgage industry
impounds (escrow funds)
mortgage insurance amounts required upfront for most loans above 80% ltv. they include 3-6 months property taxes, and 2 months hazard insurance and 2 months mortgage insurance. included in closing costs
fha title ii 203 b loans
most widely used. fixed rate
heloc fraud
multiple helocs on one asset.
under facta what must mlo do with credit reports not reatined in a customers file
must have policy for desctruction
what restrictions apply to higher priced mortgage loans under hpml section 35 of the reg z?
must takeinto account buyers ability to pay must verify income and assets. must verify the borrowers ability to pay using largest payment during first 7 years prepayment penaliteis are only allowed for the first two years of the loan must establish escrow account.
vesting
name of borrowers and the manner they hold title
nmls
nationwide mortgage licensing system. the record for mortgage industry licensing.
does va cahrge mi?
no
under hmda regulations, is the applicant requried to provide the hmda info
no
4 catagories of credit score
payment history. 35%. available credit. 30 % credit history. 10% credit inquiry. 10%
4 ways forclosure can end
pays of default amount a thrid party buys the property at public auction. lender takes ownership of the proeprty aka reo
short sale scheme
premeditated short sale. a straw buyer is used to buy a home with no intention of making payments. the perp offers to buy the house from the bank on short sale terms.
par
price of 100% of face value
piti
principle, interest, taxes and insurance
financial statements
profit and loss statments
affordable housing programs
programs offered by communities that offer lower rates, have higher qualifying ratios, easier underwriting requirements
collateral
property pledged as security for a debt
waive right to rescind
provide lender with writen dated statement describing the emergency signed by all parties entitled to rescind.
USDA rural development guaranteed program
provides gurantee on approved private lenders loans. offers programs for moderate income applicants with 0 down, no pmi, and 102 ltv
pih
public indian housing. like fha
section 9 RESPA violation
requiring buyers to purchase title insurance from a particular company
TILA purpose
requrieds disclosore of information
laws in place to regulate residential lenders
respa, hoepa, tial, ecoa, fair credit act
what reg requires good faith
respa, reg x.
easment
right to enjoyment of land held by another
junior liens
second mortgage, suboridinate financing
respa section 10
section ten sets limits on the amounts a lender may require a borrower to put into an escrow
what timeframes is the lender under when receiving a qualified written request?
servicing lender must notify borrower of reciept of the request within 20 biz days. the lender has 60 days to investigate the complaint and provide a response.
GFE contents
settlment charges including ysp
service release premium
similar to ysp, but only available to direct lenders. srp not shown on hud-1. paid after closing when loans are sold on secondary market.
pledged asset
something of value pledged as collateral for a loan
under respa 3 things required of lenders provide at time of application
special info booklet. gfe, morgage serviceng disclosure statement. must be mailed within 3 days of revieving app unless loan is denied, then they are not requried to be sent.
portfolio loan program
special loan program offers special features that cant be offered in traditional conforming loans.
patriot act purpose
stop money laundering,
shotgunning
taking out multiple loans for the same hoem simultaneously
lifetime cap
themax amount a rate increase that can happen over the lifetime of an arm loan
reg z is also
tila
advice to help improve credit score
time, credit balances, no additional credit, on time payments
where will the appraisal independence rule be added
to TILA (reg z)
seller provided funds
transaction costs paid by the seller except the real estate agents fees.
conveyance
transfer of legal title
undisclosed kickbacks
two parties conspire to exchange cash outside of closing.
urar f
uniform residential appraisal report form 1004
urar
uniform residential appraisal report.
urar
uniform residential appriasal report
neg am
unpaid interest added to principle amount
form used to collect hmda data
urla 1003
fha title 11 section 234c loans
used for condos, rate may be fixed or adjustable
under ecoa, once a person applies for aloan, how long until mlo provides written notification to the action that will be taken
within 30 days
notice of default
written notice to a borrower that a default has occurred and legal action may be taken
safegaurd rules of graham leach blilbey act
written policies to protect customer info
ysp
yeild spread premium. an amount paid to a broker for bringing a morgage application to them.
does borrower have a right to a copy of their appraisal
yes, ecoa gives that right. they can request a copy within 90 days of notice of adverse action
how long must a lender reatin hud1
5 years, unless loan is sold. then purchaser must retain for 5 years.
how long does a borrower have to decide whetehr to sing the loan agreement after recieving the special section 32 disclosures for hoepa
3 biz days
once a complete loan app, how long does the mlo have to provide a gfe
3 biz days
when must an mlo privide the hud settlement cost booklet to loan applicant
3 biz days
how long does an indivdiual have to bring a private law suit for a violation of respa section 6
3 eyars
how long to file suit under respa section 6
3 years
fraud vs predatory lending
fraud is cheating institutions. predatory lending cheating consumers
fhlmc
freddie mac. federal home loan mortgage corportation. mortgages offered under freddie mac are called conforming.
loan prospector
freddie macs automated underwriting system
hmda
home mortgage disclosure act. an act of law that requires lneders to upoload app data to identify discrimination
hvcc
home valuation code of conduct. rules outlining interactions between lenders and appraisers.
COE
issude from department of vererans affairs that establishes vets eligibility for va loan
fraud aler on credit file
mlo must take steps to confirm applicants identity
closing costs
money paid by borrower in connection wiht the closing of a mortgage loan
two types of title insurance
owners policy, lenders policy
servicer
party who services loan
initial borrower interest rate
the first payments rate
under ecoa, what time period must discrimination lawsuit be initiated
within 2 years
when must money a customer has given be returned if the customer recinds
within 20 days
what does fha require for downpayment and closing costs
3.5.
terms for rural development gurantee program
30 year, no down payment.
mdia corrected disclosures
3rd day after delivery, closing can occur.
hoepa disclosures
1. A written notice stating the loan does not have to be completed even though the borrower has signed the loan application and received the disclosures. 2. That the borrower could lose the home and any money put into it if they fail to make payments. 3. The APR, the regular payment amount (including any balloon payment), the loan amount, and that the rate and monthly payment may increse (only in the case of variable rate loans).
What are the restrictions on HOEPA loans (Home Ownership and Equity Protection Act)
1. Balloon payments on loans with a term of less than 5 years. This does not apply to loans of less than 1 year if the loan is a bridge loan connected with the acquisition or construction of a dwelling intended to become the consumer's principal dwelling. 2. Negative amortization cannot be allowed. 3. Advance payments from the loan proceeds. 4. Adjustable rate mortgages (ARMs) are not allowed. 5. Rebates of intrest from loan acceleration are not allowed. 6. Prepayment penalties are not allowed. 7. Due on demand clauses are not allowed. 8. All covered loans must establish an escrow account for payment of taxes and insurance and become part of their PITI.
what form does irs have to requrest transcript of a tax return
4505-t
Under what circumstances ARE prepayment penalties allowed on a HOEPA loan (Home Ownership and Equity Protection Act)?
1. If the penalty can be exercised in the first 5 years. 2. If the source of prepayment funds is not a refinancing by the creditor or an affiliate. 3. If the consumer's total monthly debt at the loan's consummation does not exceed 50% of their total monthly income.
fair houseing act restrictions
1. It is illegal to threaten, coerce, intimidate, or interfere with anyone exercising a fair housing right or assiting others who exercise that right. 2. Advertising shall follow the same guidlines regarding discrimination (which applies to single-family and owner-occupied housing that is otherwise exempt). 3. Landlords must allow tenants to make reasonable modifications for the sake of handicap accessibility at their own expense.
subprime risk indicators
2 30 day delinquincies in the last 12 months. judgement int he past 24 months bankruspty last 5 years high default probablity by 660 or below credit dti 50% or greater
copies of right to recind?
2 to each borrower.
vor how long
2 years
years of employment
2 years
under ecoa, how long does a lender have to retain a copy of any submitted application for credit
25 months
max urar adjustment
25%
critera for loan to be covered by hoepa
1. orignial mortgage must exceed treasury rate by more than 8 points. 2. second loan lien must exceed the reasury rate by ten points. 3. total fees and points payable by the consumer closing exceed the larger of 611 or 8% of the total loan amount.
tolerance apr under TILA
1/8th of one percent
what are the tolerance limits on disclosures made on fge
10%
ecoa penalties
10,000. or 500000
penatly for respa 8 violations
10k or one year in prison
eligibility for usda rural development gurantee
115% medium income max. reasonable credit histories.
sercicing transfer statement
15 days before the effective date of the loan transfer.
max net adjustment allowed on app
15%
fha pmi must be in place
5 years
VA max gurantee
50750 or 25%
max ltv for fha loans
580 is 96.5 500 90%
penalty for willingly giving false informaition under tila
5k fine or imprisonment for 1 year
how long must a lender keep all collected data under hmda
5years
time to improve credit score
6-9 months
under ecoa how long does a person have to request explanation of reasons they were denied credit
60 days
under the mdia, once early disclosure a re mailed how soon can a loan close
7 biz days
credit report info
7 years
state requried licenisng requrienments
8 hours of ce each year
FHA 251 loans
ARM 1 year t-bill index. 1-4 units.
AARMR
American Association of residential mortgage regulators. an association of state agencies regulating the residential mortgage industry.
Which agency enforces FCRA
CFPB consumer financial protection bureau
COFI
Cost of funds index. an average of rates paid on checking and savings accounts by a regional sample of us banks. one of several indexes used to set interest rates for arms
ECOA and marital status
ECOA allows inquiry about marital status to determine the applicants rights and remedies.
SAFE ACT
Established by the State bank of supervisors and the american asociation of residential mortgage regulators
FCRA
Fair credit reporting act. Reporting agencies use procedures which are fair and quitable regarding confidentiality, accuracy and relevancy of personal info.
GNMA
Government national mortgage association. the actual guarantee agency for federally guranteed morgages by VA, FHA, RHS, and PIH. Ginne Mae's mortgage backed securities are the only MBS that are guaranteed by the federal government.
watchdog federal agency
HUD
HOEPA
Home ownership protection act. Amendment to TILA. addresses deceptive practices. rules for these loans are contained in section 32 of reg z for high rate/high fee loans.
no requirement complete statement is requried by what act?
MDIA. morgage disclosre improvement act
act requiing this statmentL you are not required to compled this agreement merely because you have recied these disclosures or signed a loan application"
MDIA. mortgage disclosure improvement act
TILA non trigger terms
No down payment APR
What act requires GFE
RESPA
Equal Credit Opportunities Act
Requires notice of adverse action to be given to an applicant.
2/1 buydown
This is a process used by lenders to help borrowers qualify for a loan. It can be used on almost any fixed rate loan. The borrower's loan payments for the first 24 months are subsidized. The 2-1 reeferes to the equivalent payment for an interest rate below the actual note rate. The note rate may be 7%, which would mean the first year they rate would be 5%, and the second it would be 6%, staying at 7% from the third year onward. The borrower may qualify at the lower first-year rate for higher LTV loans. A subsidy account is set up by the lender and can be funded by borrower, seller, or lender.
TILA
Truth in lending act. requiring APR, term, totcal costs to be disclosed on docs
hmda
home mortgage disclosure act. requires aplication data to be provided to federal reserve to identify discrimination.
section 8 violation under respa
accepting an item of value outside of closing
va eligibility
active duty for 90 days or 181 days during peacetime
net adjestments are calculated on URAR
adjustment divieded by original price
how can rate caps be written
adjustment period cap precedes the lifetime cap. 2/6 means 2% increase per adjustment period, 6% over the life of the loan
Standard components of a title commitment
agreement to issue policy. schedule a: commitment date, policies to be issued, interest in the land, legal description. schedule b: requirements for issuance, exceptions.
purchase contract
agreement to purchase
requirements for mortage insurance under fha
all loans are required to have morgage insurance. upfront premiums are a perenctage of the loan amount and added into the loan. mip must remain for atleas 5 years and ltv must be 78% or less in order to drop mip
conversion option of an arm
allows borrower to convert arm into fixed.
what is section 6 of respa
allows for qualified written requests regarding escrow accounts.
alta
american land title association. the national trade association of the abstract and title insurance industry. created standards and forms used by title companies. every title policy is an alta policy
how is hazard insurance calsculated
amount x insurance factor divided by 12
prime rate
best rate available to a lenders best customer.
warehousing
borowing funds on a short term basis to fund loans until they are sold
complete application: BLAMES
borrower name loan amount address monthly income estimated value of property social security
to assure a given rate at settlement
borrowers must lock in rates by paying a fee when they apply for financing
BPO
broker price opinion. written opinion of value offered by a licensed real estate agent
cash back scheme
buyer and seller collude to to decieve the lender to the true sale price of the property. the seller gives the buyer cash back outside of closing
dodd frank added 3 prohitions for mlo compensation
cannot be based on loan terms or conditions. cannot come from both consumer and lender. cannot be based on particular types of loans.
documents used to determine capital
cash, bank statements, stock account statements
what agency oversees tila
cfpb
redislcosing gfe
changes greater than tolerance.
occupancy fraud
claims to be owner occupied
4 c's of underwriting
collateral, capacity, character, capital
cRA
community reinvestment act. Encourages depository institutions to meet credit needs of communitites in which they operate.
different appraisal method
comparison, cost , income
comparables
comps. other properties used to determine value
how long after bankruptsy before new homeloan
conforming 4 years from discharge. fha and va 2 years from discharge
hoepa
home ownership equity protection act. the law addresses certain deveptive and unfair lending.
appraisals are good for
days
how might a depository insittuion be penalized for a poor cra community reinvestment act
denied requests to open new branches
what authority oversees and enforces the patrio act
deparment of homeland security
VA
department of vererans affairs. guarantees loans for vets.
community reinvestment act
depository insitutions meet credit needs of communitites
what is a fannie maes autamated underwriting system
desktop underwriter
fha title ii section 203 h loans
destoryed by naureal dissaster, red taged and have certificate from fema, delcared area a disaster area, 100% fiancning fixed or adjustable
Graham leach bililey
disclosure on an annual basis of their policies for collectin and sharing nonpublic information. possibility for consumers to opt out of disclosures of their nonpublic information to nonaffiliated third parties. cannot disclose account access info of consumers to 3rd party marketers.
fha gifts
docmunet relationship, source and transfer
TILA trigger terms
down payment amount any payment number of payments period of repayments amount of finance charge Required Disclosures If any triggering term is used in a closed-end credit advertisement, then the following three disclosures must also be included in that advertisement: 1. The amount or percentage of the down payment; 2. The terms of repayment; and 3. The "annual percentage rate,"using that term spelled out in full. If the annual percentage rate may be increased after consummation of credit transaction, that fact must be disclosed.
prohibited by ecoa
dsicrimination b/c race, color, religion, national origin, sex, marital status or age, source of income, or made a complaint under ecoa.
respa section ten escrow accounts
each month the lender may require the borrower to pay 1/12th of the total of all disbursements payable during the year plus an amount necessary to pay for any shortage inthe account.
what act requires a request for credit to be given within 30 dyas
ecoa
what reg requires right to a copy of appraisal?
ecoa
how did the financial insitutions reform recovery and enforcement act adjust the requirements of the home morgage disclosure act?
expanded coverage of hmda to include more insititutions. required reporting data regarding applications for mortgages and home improvement loans. required lenders to identify the race
legislation requires the credit score information disclosure
facta. fair and accurate credit transactions act
facta
fair and acurate credit transaction act. additions to the fair credit reporting act. help fight identity theft
frca
fair credit reporting act. a law requiring lenders rejecting loan requests because of credit information to inform the borrower of the source of such information.
fcra
fair credit reporting act. requries credit reporting agencies to be fair in reporting
fnma
fannie mae.GSE to increase access to mortgages.
what tells consumer they have a right to fair representation of their credit history?
fcra. fair credit reporting act.
ffiec
federal financial insittions examination council collects demographic data submitted by lenders under hmda
freddie mac
federal home loan mortgage corporation
fha
federal housing administration. a divisuion of hud. insures morgages.
va loan funding fee
fee paid by borrower to help cover the costs of foreclosure. may be included into the loan.
MIP
fha mortgage premium. upfront mip and monthly .
FICO
fiar isaac corporation. credit score.
settlement
finalizing all dealings.
firrea
financial insitutions reform, recovery, and enformcent act. created regulatory entities to oversee thrifts and created guidlines for qualified thrift lenders
concessions
financing concessions: help borrower offset some closing costs associtated with loan. My come from sellers or real estate agents. Sale concessions: property or contract related concessions. carpet allowance, repair allowance. The value of concessions are considered when calculating the max loan amount and can result in a lower loan amount because the amount of concessions will be deducted from the property value before calculating the max mortg amount.
MLO Licensing Requirements
fingerprinting, credit report, criminal record, preslicense education, passing test by 75%
Fees telemarketers pay in order to recieve copties of do not call list
first 5 area codes are free. $58 after. 15, 962 for entire list annualy.
verification employment form
fnam 1005
application
fnma 1003, fhlmc 65 hud 92900, va 26/1802a
Fannie mae stands for
fnma. federal national mortgage association
fannie mae
fnma. largest mortgage investor
required monthly payment income
front ratio divided by monthly payment
alienation clause
gives lender rights when property is sold or transfered.
what are fha title ii section 245a loans
gpm. graduated payment mortgages. loan has scheduled negative amortization.qualify at intitial monthly payment.
gpm
graduated payment mortgage. payments start loaw and increase before leveling out. involves neg am
financial modernization act aka
graham leach bliley act
what legislation requires financial pricay act notice to be given
graham leach bliley act
glbA
graham leach bliley act. established privacy rules and how creditors handle nonpublic information.
Front end ratio. front end DTI
gross monthly income X .28. Compare the answer to the project house payment.
max payment
gross monthly income x front ratio.
when are active military personeel eligible for a va loan
have having served on a continuous active status for at least 90 days
section 32 loan
high cost loans which require additional disclosures
section 32 mortgages
high rate or high fee loans addressed and governend in section 32 of TILA
hpml
higher prices mortgage loans section 35 reg z aka tila. average prime offer rate. a survey based estimate of aprs currently offered on prime morgage loans of comparagle type.
the regulation which requires lenders to indentify race sex color
hmda home mortgage disclosure act...as adjusted by the financial insitutions reform recovery and enfrocement act.
who do predatory lenders target
hoemowners with equity, credit problems, who need cash. people in financail need e
tenancy
holding of realestate under any kind of title.
HECM
home equity conversion mortgage. a section 255 FHA loan. Reverse mortgage.
hecm loan mature
home equity conversion mortgage. borrower sells. last person passes away. last person oves away
HECM loan
home equity conversionmortgage. 62, principle, meet fha standards, no other leins, attend hud approved hecm counseling program.
heloc
home equity line of credit
under respa when does mol not have to mail disclosures
if credit app is denied proir to the 3 business day deadline
under fcra is written authorition to obtain a credit report required
if the infomration is being gathered for the purpeose of extending credit, a written authorization is not requried
5 key elements of arm
indiex, margin, adjustment period, rate caps, start rate
disclosure
information relevant to specific transactions as required by law
hazard insurance
insurance to provide compensation incase of property loss or damage.
fha again
insures residential mortgages
joint tenancy
interest goes to surving tennatn
teaser rate
introductory rate to entice the borrower into the loand
hecm responsibilities
keep property insured. pay property taxes. keep property in good repair.
what is covered by section 8 of respa
kickbacks and other fees that drive up the cost of products to consumers
respa
law governs lending practice and disclosure. GFE and HUD within 3 days of loan app
federal privacy law title V of the graham leach bliley act
law imposing restrictions on the useof customers nonpublic personal information
mortgagee
lender
sub prime lending
lending to weakened credit borrowers
payment adjustment period
length of time between changes to arm
delinquency
loan in which payment is overdue but not yet in default
llpa
loan level pricing adjustments. up front fee charged for mortgage loans with higher risk profiles to offset potential losses.
prohibited acts covered by hoepa
loan proceeds cannot be paid directly to the home improvement contractor. selling a loan without disclosre to the purchaser could be liable for all claims and defenses. refinancing one hoepa loan with antoher to the same borrower within the first 12 months. extending credit to the borrower based on the colateral without regard to their ability to repay. hoepa loans cannot be reloving credit type oans.
conforming loan
loan that conforms with fannie and freddie
dodd frank mlo presentation requiriements
loan with lowest interest rate. lowest total costs. loan with lowest rate without negative features. must show loans where apr cannot increase, can increase, and reverse mortgages, a reasonable number of loan options.
conventional loans
loans not insured by fha, va, or sub prime
libor
london interbank offered rate. used as arm index
depreciation
loss of value due to all causes. physical deterioration, functional obsolescence and economic obsolescence.
how can hecm payouts happen
lump sum, line of credit, term payments, tenure payments a combo of any of the above.
purpos of ecoa
make credit available with fairness
mortgage fraud
material misrepresentation to deceive a lender
NIV
no income verification loan.
can a borrower be penalized for making apayment to the old servicer
no, as long as they made a timely payment within 60 days of the loan transfer
what is the loan called when it exceeds conforming limits
non conforming, and jumbo
what does fair houseing act require of proeprty owners
non discrimination for sale or rental based on race, color, national origin, sex famly status or handicap
noo
non owner occupied
under facta, what must an mlo provide an applicant when obtaining a credit report on them
notice to home loan applicant, credit score disclosure.
what is pmi underwritin
once loan is underwritten, pmi is underwritten
basis point
one hundreth of one percent.
points
one time one percent.
what fees can be charged the consumer prior to recieving the TIL disclosure
only a fee for the actual cost of the credit report.
what extent can a mlo inquire about age, marital status, source of income etc...
only to determine applicants legal capacity.
under the fcra, can mlo give a copy of the credit report obtained
only when the credit info used for the credit decision differs fromt he info obtained in the credit report
hecm fees
origination fee. closing costs, upfront mortgage insurance. monthly orgage insurance
employmentincome fraud
overstating income
o/o
owner occupied
ltv for conforming
owner occupied: 90, 95, 80. second home:95. investment property: 90 90
property flipping fraud
purchasing, falsely appraising property for a higher value, then selling. requires collusion with an appraiser or falsified documentation that inflates the value of the home.
yield
ratio of investment income to total mount invested over a period of time
RESPA
real estate settlement procedures act. prohibits kickbacks. requires lenders to provide gfe, and hud-1, or hud-1a,
elements of a adverse action statemetn
reason for denial of credit. identity of persons or office from which statement may be obtained.
redlining violates what statutes
refusing to make loans in particular neighborhoods. violates ecoa and fha
ecoa is also known as
reg b ALSO KNOWN AS REG B: to promote the availability of credit to all creditworthy applicants without regard to * race, * color, * religion, * national origin, * sex, * marital status, * age * public assistance * exercised any right * prohibits creditor practices that discriminate on the basis of any of these factors. * requires creditors to notify applicants of action taken on their applications * to report credit history in the names of both spouses on an account * to retain records of credit applications * to collect information about the applicant's race and other personal characteristics * to provide applicants with copies of appraisal reports used in connection with credit transactions.
respa aka
reg x
what is the ecoa also known as
regulation b
what is resp aka
regulation x.
TILA regulations
regulations regarding advertisements offering credit.
fha ttile ii 203 k loans
rehab loans min 5k
dti
relationship between the borowers long term debt payments and the monthly income
ammortization
repayment of amortgage debt with equal payments.
title report
report consisting of a survey, a phusical inspection of the collateral, and a search of the records
consideration
required element of all contracts by which a legal right or promiseis exchanged for the act or promise of another person.
gfe block 3
required services lender selects. cannot change more than ten percent
tcpa,
telephone consumer protection act. do not call list
personal information disclosure
tell where information is shared within the lending company and how to limit that sharing if desired
tolerance for block 5 on gfe
ten percent
what agency oversees FACTA
the CFPB consumer financial protection bureau
capacity
the ability a borrower to repay. documented by tax returns, w2 forms, pay stubs, and bank statements.
reconveyance
the acto fo a lender giving the borrwer interest in the property upon loan fulfillment
margin called spread
the amount lender adds to the index to determine the fully indexed rate.
mortgagor
the borrower
what bureau did dodd frank create
the cfpb. consumer fiancial protection bureau. and indpendent bureauwithin the federal reserve system
Construction to permant loan
the conversion of a construction loan to a longer term tradition mortgage after construction has been completed.
deficiancy
the deifference between outstanding balance an proceeds from sale
back ratio
the dti ratio a lender will allow for piti and regular monthly debt.
ltv
the loan amount divided by the value of the property
dodd frank created
the office of fair lending and equal opportunity
prepayment
the payment of all or part of a mortgage before it is due.
term
the period of time between commencement date and termination date of a note. / contract.
float
the period of time between the reipt of the borrowers funds and the remittance of those funds to investors
subordination
the process of a creditor taking a lower priority position for collection of their debt
Loan servicing
the process of recieving payments, customer service, administering escrow, investor accounting, collections, and foreclosures.
if consumer is not made aware of their right to rescind
the recission period will lapse on the earliest of the folowing 3 events: 1. the expiration of 3 years after consummation of the transaction. 2. transfer of all consumers interest in the property. 3. sales of consumers interest in the property.
fee simple
the right dispose of property or pass it on to ones' heirs
collection
the servicing procedure followed to bring a delinquent mortgage
net worth
theasests minus liablities
equity skimming
using a straw borrower to sign a property over to a rea borrower by quit claim deed. buyer rents out property until forclosure takes place
blockbusting
using race to induce panic selling
VOD
verification of deposit. FNMA form 1006, is asking to berify funds availability for down payment
where must employer send voe
verification of employment. directly to the lender
vom
verification of rent (mortgage) a form used ro verify retnal payments.
price fixing
when 2 or more entities agree to se tthe price of certain services
what is the failure to disclose liabilites
when a borrower conceals financial obligations.
builder bailout scheme
when a fuilder inflates the cost of ahome he is trying to sell. the lender loans on the actual value but believes the builder to have already been given the inflated amount as a down payment.
balloon morgage
when a loan balance is due before fully maortizes
pattern or practive of discrimination under ecoa
when evidence establishes discriminatory actions were the regular practice.
when a new til
when the apr become inacurate. must be revieved no later than 3 days before consummation
under mdia when are early disclosures condidered to have been delivered
when they are delivered to the consumer or when they are placed in the mail
