Unit 7 — closing

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RESPA establishes linings on the amounts that mortgage lenders and services may require a borrower to deposit into any tax or insurance escrow account. The maximum amount that may be collected on a monthly basis is

1/12 of the total disbursements for taxes and insurance premiums that are anticipated in a year

The lender will collect at closing a cushion amount for paying taxes that will be due shortly after the closing. The maximum amount that can be collected at closing is

1/6 of the expected annual disbursements

The lender must deliver ( and borrower must receive) a copy of the buyers closing disclosure no less than

3 business days before consummating the loan

Which of the following entries on the settlement statement will always involve prorations

A double entry, meaning that the amount will show in both the seller and the buyer sides of statement

A balloon payment is defined as

A final payment due at the maturity date of a note

If a loan is originated by a mortgage broker who receives a fee from the lender for making a loan with an above - market interest rate, this is referred to as

A yield spread premium

Which of these must the seller and buyer furnish the the escrowed agent before the final closing may occur?

All neccessary documents and funds required from each party

Another detail that is disclosed on the settlement statement is whether or not your lender will

Allow assumption of the loan by another party

The seller usually employs an attorney to represent them in the sale of ...

Commercial property

What forms did the loan estimate and Closing disclosure replace?

Good faith estimate and HUD-1 settlement statement

The purpose of the escrow account is to protect the interest of the lender and any investor who may have purchased the loan in the secondary mortgage market because

If taxes are not paid, a tax lien will attach to the property and would have priority over the mortgage loan on the even if foreclosure

The seller of a 1-4 property must provide the buyer with a residential property and owners association disclosure statement. The seller, however has no affirmative duty to disclose defects or other information about the property by selecting which of the following options on the disclosure form?

No representation

The timeline for the sellers disclosure of their copy of the closing disclosure is

Not applicable since there is no time limit for the seller to revive a closing disclosure

RESPA prohibits the payment or receipt of any fee, kickback or other things of value to or from any person involved in the real estate settlement service. The underlying reason for these restrictions is to...

Prevent higher loan acquisition cost to borrowers due to inflated loan settlement charges

The RESPA rules are commonly referred to as

REGULATION X

The TILA RESPA integrated disclosure is commonly referred to as

Regulation Z

In North Carolina real estate tax bills are due in ..

September 1

The CFPB closely scrutinizes marketing device agreement arrangements between various settlement service providers and has determined that

Several are illegal

A real estate broker has an obligation to disclose to prospective buyers any material facts relating to the property that the broker knows or

Should reasonably discover through a walk through inspection if the property.

A loan is consummated when

The borrower becomes obligated on the loan

If the earnest money is being held by the brokerage firm, the brokerage and the closing attorney may agree that

The brokerage will continue to hold the earnest money in escrow in anticipation of retaining a portion of said earnest money as payment of commission.

The buyer has the right to choose the closing attorney. That attorney will usually represent both the buyer and ...

The buyers lender

In North Carolina, billing for property taxes is handled by

The county in which the property is located

If a buyer is purchasing unimproved land. 8) is necessary to have an inspection by

The local health department

In North Carolina that actual settlement date is allocated to

The seller

Most closings in NC use?

The settlement meeting method

If additional provisions addendum is used for a manufactured home, then the seller must include in the addendum the

VIN numbers

Loan Servicers must provide loan servicing disclosures of the loan servicing may be transferred to another entity during the life of the loan and

When the loan servicing is transferred and to whom

Information about an escrow account can be found on page 4 of the settlement statement and includes

Whether the lender is requiring an escrow account for the payment of certain costs

The designate of the settlement charges must be provided

Within 3. Business days after the loan application


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