Ch. 17 Flashcards
Accrued Items
On a closing statement, items of expense that are incurred but not yet payable, such as interest on a mortgage loan or taxes on real property.
Affiliated Business Arrangement (ABA)
Practice of one company offering a package of services to consumers.
Closing
An event where promises made in a sales contract are fulfilled and mortgage loan funds (if any) are distributed to the buyer.
Closing Disclosure
The CFPB form that itemizes all charges that are normally paid by a borrower and a seller in connection with settlement, whether required by the lender or another party, or paid by the lender or any other person.
Closing Statement
A detailed cash accounting of a real estate transaction showing all cash received, all charges and credits made, and all cash paid out in the transaction.
Credit
On a closing statement, an amount entered in a person’s favor - either an amount the party has paid or an amount for which the party must be reimbursed.
Debit
On a closing statement, an amount charged; that is, an amount that the debited party must pay.
Escrow Account
The trust account established by a real estate professional under the provisions of the license law for the purpose of holding funds on behalf of the real estate professional’s principal or some other person until the consummation or termination of a transaction; trust account established by an escrow agent to hold funds pending distribution at the closing of a transaction.
Escrow Closing
Occurs when a disinterested third party is authorized to act as escrow agent (escrow holder) and to coordinate the closing activities on behalf of the buyer and the seller.
Impound Accounts
An account that the mortgage lender may require a borrower to have to accumulate funds to pay future real estate taxes and insurance premiums.
Loan Estimate
A CFPB form that highlights the information that historically has been the most important to consumers. Interest rate, monthly payment, and total closing costs are clearly presented on the first page.
Mortgage Disclosure Improvement Act (MDIA)
Enacted in July 2008 as an amendment to the Truth in Lending Act (TILA) to require mortgage loan cost disclosures to consumers. Early disclosure (a good faith estimate) of mortgage loan cost must be provided within 3 business days of receiving and consumer’s application for a mortgage loan; a creditor must wait 7 business days after providing the early disclosures before closing the loan; and a creditor must provide new disclosures and wait an additional 3 business days before closing the loan, if a change occurs that makes the annual percentage rate quoted in the early disclosure inaccurate beyond a specified tolerance.
Mortgage Servicing Transfer Statement
Disclosure required by the lender if the lender intends to sell or assign the right to service the loan to another loan servicer. The loan servicer must notify the borrower 15 days before the effective date of the loan transfer, including in the notice the name and address of the new servicer, toll-free telephone numbers, and the date the new servicer will begin accepting payments.
Prorations
Expenses, either prepaid or paid in arrears, that are divided or distributed between the buyer and the seller at the closing.
Survey
The process by which boundaries are measured and land areas are determined; the on-site measurement of lot lines, dimensions, and position of a house on a lot, including the determination of any existing encroachments or easements.
