Section 2: Unit 7: Settlement/Closing

A creditor usually gives the Loan Estimate how soon after receiving the loan application?

3 days

When must the Closing Disclosure be delivered to the buyer?

At least three business days prior to closing

What are three things the seller usually pays at closing? (See page 6 for other correct answers.)

Broker commission Title fees, such as for clearing the title Fees for preparing the deed

What does page 3 of the Closing Disclosure contain?

Calculations of the amount of cash the buyer needs to bring to closing and summaries of all the transactions for both the buyer and the seller

1 of 9 - The federally-required form that details all money into and out of a real estate transaction is the HUD Form 15. Universal Settlement Statement. Uniform Closing Statement. Closing Disclosure.

Closing Disclosure.

7 of 9 - RESPA is administered by the Department of Rural Housing. Indiana Real Estate Commission. the Environmental Protection Agency. Consumer Financial Protection Bureau.

Consumer Financial Protection Bureau.

What is the definition of consummation of the loan?

Consummation is defined under Regulation Z as the time that a consumer becomes contractually obligated on a credit transaction

List three items that a buyer usually pays at closing. (See page 5 for other correct answers.)

Credit fees Loan origination Homeowner's insurance

5 of 9 - Which of the following statements is TRUE? The Closing Disclosure contains estimates of the terms and costs of the transaction. The Closing Disclosure can be oral. Even if the actual terms or costs of the transaction change prior to consummation, the creditor can use the original disclosure with an addendum. If the creditor provides a corrected disclosure, it may also be required to provide the consumer with an additional three-business-day waiting period prior to consummation.

If the creditor provides a corrected disclosure, it may also be required to provide the consumer with an additional three-business-day waiting period prior to consummation.

Negative amortization -

Indicates whether or not the loan has a negative amortization feature, which could result in the loan amount becoming larger than the original loan amount, resulting in a decrease of the equity the borrower has in the property

Origination charges - (loan costs for buyer)

Items such as points, application fee, and underwriting fee

When does a loan application exist?

Once consumer has submitted 6 items (3 pertaining to customer and 3 pertaining to property) to the lender. Those items are: Name Borrower's Income Borrower's Social Security number Property address Estimated value of property Amount of mortgage loan sought by the consumer

What does it mean when the borrower signs the Loan Estimate?

Only that the borrower has received a copy of the form. It does not mean that the borrower has accepted the loan.

6 of 9 - Which page of the Loan Estimate form will look essentially the same regardless of what type of loan the consumer is getting? Page 1 Page 2 Page 3 They all look the same.

Page 1

What page of the Loan Estimate gives the details of the closing costs?

Page 2

9 of 9 - Which pages of the Closing Disclosure will look the same regardless of the loan type the consumer is getting? Pages 1 and 5 Pages 2 and 3 Pages 2 and 4 Pages 3 and 5

Pages 2 and 3

If an item is paid for in advance by the seller, how will it be handled on the settlement statement?

The buyer will receive a debit and the seller will receive a credit.

What does page 2 of the Closing Disclosure show?

The details of the closing costs

Regarding loan costs, what are Services the borrower did shop for -

These are items the borrower can get on his own, such as pest inspections, survey fees, and title insurance.

Regarding loan costs, what are Services the borrower did not shop for -

These are items the lender requires for the loan, such as appraisals and credit reports.

What do you call those items that the seller has incurred but have not been paid and how will they be handled on the settlement statement?

These items are paid in arrears. The buyer will get a credit and the seller will get a debit.

What are the Loan Estimate and Closing Disclosure forms all about?

They provide a means for borrowers to comparison shop more effectively for competing loan offers. The new forms clearly break down the costs of the loan, such as the interest rate, mortgage insurance costs, and closing costs.

4 of 9 - Which of the following mortgage loan items would NOT typically fall under origination charges? Points Application Fee Underwriting Fee Title Insurance

Title Insurance

8 of 9 - What is the main purpose of a mortgage Loan Estimate form? To provide the lender with a standard to measure loan offers. To provide a means for the federal government to control lending rates To provide a means for borrowers to comparison shop more effectively for competing loan offers To detect fraudulent loan practices

To provide a means for borrowers to comparison shop more effectively for competing loan offers

In Indiana, the title is transferred when?

as soon as the deed is signed, delivered to, and accepted by the buyer - at the closing table.

The Consumer Financial Protection Bureau (CFPB) forms states what?

in bold the monthly principal and interest payments

3 of 9 - A mortgage Loan Estimate must be in writing and contain the information prescribed by the TRID rule. in writing and contain the information prescribed by HUD. sent to the applicant within 3 weeks of a written loan request. copied and sent to a local HUD office within 3 business days of acceptance.

in writing and contain the information prescribed by the TRID rule.

2 of 9 - A mortgage Loan Estimate must be delivered within

three business days of loan application.