Principals of Real Estate II Chapter 14
Loan Estimate Page 2
* Loan Costs * other costs * total costs from section J above * closing costs paid from the loan amount * down payment * deposits * funds for borrower * seller credits * adjustments * other credits
Loan Estimate Page 3
* comparisons * other considerations * confirm receipt
Loan estimate page 1
* date issued * applicants * property address * sale price of the property * loan term * purpose * product * loan type * loan ID # * rate lock * loan terms * projected payments
New TILA/RESPA Disclosure Rule requirements 2015
* lenders must give a copy of the booklet "your home loan toolkit" to every person at the tine of application for loan * lenders must provide a loan estimate of settlement costs at the time of loan application or within three business days of application * a closing disclosure- a form designed to detail all financial particulars of a transaction- must be delivered to the borrower at least three business days before closing
Loan estimate rules
* must contain a good-faith estimate of credit costs and transaction terms * in writing * delivery must satisfy the timing and method of delivery requirements * lenders may only use revised or corrected loan estimates when specific requirements are met
Computerized Loan Originations (CLO)
* provided prospective borrowers information about mortgage loan products * prequalifies borrowers * initiates a loan application process for a fee
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Costs paid by others
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Costs paid by the seller- designated as being paid either at closing or before closing
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Description of the costs
Disclosures After Settlement
loan servicers must provide borrowers with an annual escrow statement which summarizes all charges and credits in the prior 12-month period
Does signing the closing disclosure document indicate acceptance of the loan?
No
TRID
TILA/RESPA Integrated Disclosure
loan estimate
a form that provides a means for borrowers to compare loan offers. breaks down the costs of the loan, such as interest rate, mortgage insurance costs, and closing costs
Sellers credits
contract sales price, items paid in advanced
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costs paid by the borrower- designated as being paid either "at closing" or "before closing"
Real Estate Settlement Procedures Act (RESPA) (1974)
created to ensure that the buyer and seller in a residential real estate transaction involving a new first mortgage loan have knowledge of all settlement costs.
Closing information
date issued, closing date, disbursement date, settlement agent, file number, property address, and sale price
Buyers Credits at Closing
earnest money or deposit, loan amount, and pro-rations
paid in arrears
expenses that the seller incurred but have not yet been billed for at the time of closing
Transaction information
includes names and addresses for both the borrowers and sellers and the lender's name
loan information
includes the loan term, purpose of the loan, product type, loan type, and loan ID number
The closing disclosure form
integrates and replaces the HUD-1 and the final TIL disclosure for these transactions
Debit
money that the buyer or seller needs to pay at closing
credit
money the buyer or seller receives at closing
RESPA covers loans on what type of transactions?
residential involving a new first mortgage
Most common prorated settlement charges
taxes, insurance, mortgage interest
RESPA, effective October 1, 2015
the real estate industry has new requirements as specified in the TILA/RESPA Disclosure (TRID) Rule
Consummation
the time that a consumer becomes contractually obligated on a credit transaction
RESPA requires that
the two parties receive the correct figures pertaining to their closing costs
what does TIP stand for
total interest percentage