Chapter 12

Question 1

Closing Disclosure (CD)

Answer 1

There is still a requirement for a final Closing Disclosure (CD) that will take place on the required federal closing document, the CD. To provide more privacy to the buyer and the seller, there are now separate closing documents: the Closing Disclosure for Sellers and the Closing Disclosure for Buyers. Closing attorneys are now required to use these forms for all applicable federally related loans.

Question 2

Credit

Answer 2

in a closing statement, money to be received or credit given for money or a stated obligation.

Question 3

Debit

Answer 3

In a closing statement, an expense, money, or charge against the seller or buyer.

Question 4

Double Entry

Answer 4

An amount of money showing on the closing statement for both buyer and seller. It is an amount collected from one party and given to the other party, therefore, a debit to the first party and a credit to the other party.

Question 5

Interim Interest

Answer 5

Interest paid on the loan amount from the date of closing through the end of the closing month inclusive. Typically is prepaid at the time of closing.

Question 6

Loan Estimate (LE)

Answer 6

To streamline the process the Dodd-Frank legislation sought to combine elements from each in such a way as to make things easier for the consumer to understand. The result is now called TRID to illustrate how the previous duplication from TILA and RESPA could be combined into one form called the Loan Estimate (LE).

Question 7

Prorating

Answer 7

Dividing certain settlement costs between buyer and seller.

Question 8

Real Estate Settlement Procedures Act (RESPA)

Answer 8

Law requiring advance disclosure of settlement costs and other specified information mandating specific closing statement forms and prohibiting kickbacks.

Question 9

Settlement

Answer 9

The consummation of a real estate contract. Also called closing.

Question 10

Single Entry

Answer 10

An item that appears as a debit or credit on either the buyer’s or seller’s closing statement, but not on both.

Question 11

Truth in Lending Simplification and Reform Act (TILSRA)

Answer 11

Part of the Federal Consumer Credit Protection Act. It requires four chief disclosures: annual percentage rate, finance charge, amount financed, and total of payments.

Question 12

TILA/RESPA Integrated Disclosures (TRID)

Answer 12

TILA = Truth in Lending Act
RESPA = Real Estate Settlement Practices Act

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