3.REF/ loan estimate/closing disclosure/home improvement loan/heloc/life isnurance company/ credit union/demand deposit/consumer can shop for.

Page four of the Closing Disclosure includes consumer education about ______.

APR calculations

Home equity line of credit (HELOC)

An open line of credit based on the available equity in the borrower's home.

Ed is a homebuyer reviewing the Loan Estimate he received from a lender. He notices the loan terms include a prepayment penalty. Because he's a savvy consumer, he ______.

Asks the lender if there are other options available that would not involve a prepayment penalty

Mortgage Banker

Can have varying interest rates Stay involved with the loan for its entire lifecycle Most are private enterprises Paid through fees from origination and servicing loans Originate their loans Loan offerings limited to those offered in-house

Home improvement loan

Financing for home improvements (such as additions or modernization) with terms of up to five years A type of interim financing, specifically for new construction, with a terms between three months and three years.

Commercial banks fall into which of the following category of lenders?

Institutional lenders

Life Insurance Companies and Real Estate Funding

Life insurance companies often purchase blocks of single-family mortgages from the secondary market. they don't fund single-family dwellings. prefer to extend loans for stability and long-term appreciation, such as for large-scale construction projects. can better guarantee their investment is by insisting on an equity position. This is called participation financing. participate indirectly in real estate funding by purchasing blocks of mortgages for single-family dwellings from the secondary mortgage market. doesn't require payment of dividends, life insurance companies have billions of dollars to invest. This makes their role in commercial real estate funding invaluable.

Closing costs are itemized on page two of the Closing Disclosure and all amounts are ______.

Listed according to who paid them: borrower, seller, or other

Shouldn't change

Loan amount Loan term, purpose, and product

itemized on page two of the Closing Disclosure

Loan application fee Recording fees Real estate broker commission Settlement agent fee

The "Calculating Cash to Close" table on page three of the Closing Disclosure explicitly lists ______.

Loan estimate and final amounts side-by-side

Information about how the lender will handle assumptions and late payments is included on ______ of the Loan Estimate.

Page three

The ______ table discloses the amounts associated with the transaction that the seller will pay and receive, usually resulting in a total cash to seller.

Seller's Transaction

The section on the Loan Estimate called "Services You Cannot Shop For" includes fees for ______.

Services performed by a third party that the lender selects

Under the SAFE Act, every mortgage loan originator must be fully licensed and carry a mortgage ______ bond.

Surety

Consumer can shop for

Survey fee Title search

Kendra is purchasing a home and is ready to find a lender who will give her terms that she can afford. She has done her homework and knows that she can use ______ to compare loans and find the one that will best meet her needs.

The Loan Estimate

Page one of the Loan Estimate includes a section called "Costs at Closing." The amount shown as estimated cash to close is ______.

The estimated amount the client will pay by cashier's check or wire transfer at closing

Mortgage Broker

Work with many lenders Many potential interest rates Don't service the loan beyond placement Get paid a placement fee for matching borrower with a lender Seldom invest in a loan

credit union

non-profit less regulation board of regulation. Federal credit unions were established in 1934 by Pres. Roosevelt. Credit unions finance mostly personal property loans (e.g., auto loans) and traditional mortgages. They also participate in the secondary mortgage market by pooling their mortgages into real estate mortgage investment conduits (REMICs). The National Credit Union Administration (NCUA) was established in 1970 to charter and supervise federal credit unions. Credit unions have national deposit insurance under the National Credit Union Share Insurance Fund—similar to that provided for commercial banks under the FDIC. Credit unions present serious competition for commercial banks. Because of their non- profit nature, they have fewer regulations and more flexibility in lending. In 1998, Pres. Clinton authorized the Credit Union Membership Access Act. This opened the door for credit unions to recruit members using much wider criteria, leading to huge growth in the credit union sector.

Closing Disclosure

provide final details about the loan the consumer selected. It includes the loan terms, the borrower's projected monthly payments, and final costs to get the mortgage and complete the transaction. The Closing Disclosure must be provided to consumers at least three business days before they close on the loan (which might not be the same time as closing on the real estate purchase, depending on the state). The lender may provide the form directly to the borrower, and delivery can be by mail, in-person, or electronic. If any change occurs after the form is provided, the borrower must have an additional three business days to review this document. A scheduled closing could be delayed because of this requirement for a new three-day review window, so prompt review and resolution of any questions with the disclosure forms is in everyone's best interests.

Under the "Summaries of Transaction" section on page three of the Closing Disclosure, amounts listed for the borrower's transaction are calculated to result in ______.

An amount due from the borrower, which will match the cash to close amount

institutional lenders.

Commercial banks are part of a classification of lenders known as institutional lenders.

A rebate from the lender to the borrower that offsets some closing costs, usually in exchange for a higher interest rate

Lender credits

may change without issue

Projected payments Interest rate, if it weren't locked Cash to close

Maria is a borrower reviewing her Closing Disclosure. She notices that the appraisal fee is listed under "Paid by Others" and has an "L" listed with the amount. What does this mean?

The "L" indicates that the creditor pays the item at consummation.

Page four of the Closing Disclosure lists specific disclosures about the loan, such as the penalty for late payments, whether a demand feature applies, whether the loan can be assumed, and ______.

The use of an escrow account

Usually, amounts shown on the Closing Disclosure that don't exactly match the figures on the Loan Estimate will be due to ______.

Updates to reflect the terms of the borrower's legal obligation when the loan closes

Manufactured home loan

Used for purchasing manufactured homes, with terms starting at 10 years. Longer loan terms are available to finance for homes permanently attached to their foundations.

Borrower-paid

Any cost charged to the borrower

Page three of the Loan Estimate includes information about a consumer's right to receive a copy of the ______ from the lender.

Appraisal

Prepayment penalty

The Loan Estimate warns the client if the loan includes this potentially risky feature.

Under the "Summaries of Transaction" on page three of the Closing Disclosure, the "Seller's Transaction" table is completed by ______.

The settlement agent

When Lenders Must Provide Loan Disclosures

Two of these are the Loan Estimate and the Closing Disclosure forms, which are required by TILA and RESPA.

Paid by the borrower to the lender in exchange for a lower interest rate

Points

Demand deposits

These bank deposits—such as those made to a checking or traditional savings account—must be made available upon demand.

Consumer cannot shop for

Appraisal fee --Arranging this service is the responsibility of the lender, so the consumer can't shop for it. Credit report fee ---Arranging this service is the responsibility of the lender, so the consumer can't shop for it. Tax status research fee --Arranging this service is the responsibility of the lender, so the consumer can't shop for it.

Cassie is helping her buyer client, Gus, prepare for closing. "When you get your Closing Disclosure from the lender," she tells him, "make sure you check that the borrower and seller names, the property address, and the sale price on ______ are accurate and spelled correctly."

Page one

Closing Disclosure

This form discloses final loan terms, the borrower's projected monthly payments, and total costs to complete the transaction. This includes all of the costs of the borrower's transaction. The lender is required to provide this to the borrower at least three days before the loan closes.

Loan Estimate

This form discloses key features, costs, and risks related to the loan for which the consumer has applied. The lender is required to provide this within three business days after receiving a consumer's application. This expires after 10 business days if the consumer doesn't act to move forward.

In addition to itemizing all borrower-paid and seller-paid closing costs, page two of the Closing Disclosure also tells the borrower when each amount is paid by listing it under ______.

"At closing" or "before closing"

Interim financing

Generally short term, this kind of financing is obtained to finance a construction project and is usually open-ended.

Monthly P & I

The form states whether or not this amount is adjustable. If it's adjustable, additional information is included with the amount shown.

loan Estimate

The Loan Estimate must be provided to consumers no later than three business days after they submit a loan application. If the borrower doesn't inform the lender that they want to proceed with the loan, the estimate will expire after 10 business days. Savvy consumers will shop around and receive estimates from more than one lender in order to compare the offered terms. If any terms or conditions of the loan change prior to funding, a revised Loan Estimate must be provided to the consumer. Items that would prompt revision of the Loan Estimate include: Changing from adjustable rate loan to a fixed-rate loan (and vice versa) Changing the amount of down payment An issue with the property appraising, requiring additional funds A change in credit score (and, therefore, the interest rate charged, additional reserves required, or additional down payment required) Inability of the lender to verify certain income sources A change in interest rate, or points required to maintain the interest rate

Home equity loan

A loan made by leveraging available equity in the borrower's home. Proceeds may be applied to anything from home improvement to purchasing a new car.

Construction loan

A type of interim financing, specifically for new construction, with a terms between three months and three years.

On the Loan Estimate under "Loan Costs," the points, application fee, and underwriting fee are considered ______.

Origination charges

Items included with the borrower's monthly payment that are due before the first scheduled payment of the loan

Prepaids

SAFE

The SAFE Act DOESN'T requires all mortgage bankers and brokers to have a certified safe on site. NOT All mortgage bankers and brokers are required to be listed in the national registry under the SAFE Act.

MLO Legislation—SAFE Act

The federal Secure and Fair Enforcement for Mortgage Licensing Act of 2008 (SAFE Act) applies to a variety of parties. This includes all of the following, including any subsidiaries and employees who act as a mortgage loan originator (MLO): Federal Reserve member banks National banks State banks (insured, nonmember) Savings associations or thrifts Farm Credit System lenders Credit unions Aside from specific exemptions, anyone who acts as an MLO must obtain an MLO endorsement and register with the Nationwide Mortgage Licensing System and Registry (NMLS). Each registrant has a unique identifier which allows for tracking of MLOs and facilitates public access to MLO information. The SAFE Act sets requirements to obtain an MLO endorsement and establishes policies and procedures that every MLO nationwide must follow. The SAFE Act also required that legislation be passed at the state level requiring anyone acting as an MLO to obtain the endorsement and requiring mortgage-related agencies to participate in the NMLS.