Chapter 17 Yellow Text Closing Flashcards Preview

MA RE Licenscure Exam > Chapter 17 Yellow Text Closing > Flashcards

Flashcards in Chapter 17 Yellow Text Closing Deck (26)
1

closing

the point at which ownership of a property is transferred in exchange for the payment of the purchase price

2

Title or Opinion of title

discloses all liens, encumbrances, easements, conditions and restrictions on the property

3

Survey

provides info about the exact location and size of the property. It verifys the legal description

4

Title evidence

produce a current abstract of title or title commitment for a title insurance company.

5

Payoff statement

statement in which the exact amount required to pay the existing loan is provided.

6

Bring Down

2nd title search made after the closing and before any new documents are filed

7

an affidavit of title

is a sworn statement in which the seller assures the title insurance company (and the buyer) that no other defects in the title have occurred since the date of the title examination.

8

Face to face closing

the parties meet face to face to close the transaction.

9

The exchange

is made when both parties are satisfied that everything is in order

10

Escrow closing

a disinterested 3rd party is authorized to act as an escrow agent or escrow holder and coordinate the closing activities.

11

RESPA

a federal law that requires certain disclosures about the mortgage and settlement process and prohibits certain practices that increase the cost of settlement services, such as kickbacks and referral fees.

12

Mortgage Disclosure Improvement Act (MDIA)

an admendment to the TILA to require mortgage loan cost disclosures to consumers. Early disclosure of mortgage loan cost must be provided with in three business days of receiving a consumer's application for a mortgage loan. a creditor must wait seven business days after providing the early disclosures before closing the loan; the creditor must provide new disclosures and wait an additional three 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.

13

RESPA applies to:

a first lien residential mortgage loan made to finance the purchase of 1 to 4 family homes. for either investment or occupancy, as well as second or subordinate liens for home equity loans when a purchase is financed by a federally related mortgage loan.

14

Affiliated Business Arrangement (ABA)

practice of one company offering a package of services to consumers

15

TILA RESPA Integrated Disclosure Rule

Know before you Owe or TRID. replaces the four previous disclosure forms with two new forms:
The Loan Estimate Form
The Closing Disclosure Form

16

The Loan Estimate Form

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.

17

The Closing Disclosure Form

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.

18

Your Home Loan Toolkit

an information booklet which must be provided by a creditor to a mortgage applicant as part of the loan application process, although other RE professionals, such as brokers, are encouraged to make the booklet available to prospective borrowers.

19

The Mortgage Disclosure Act

the intent of this law is to prevent the consumer form receiving an enticingly low interest rate at the initial loan application and then learning at settlement that the lender is charging more in fees.

20

Debit

is a charge!
is an amount to be paid by the buyer or the seller

21

Credit

due in a persons favor. an amount payable to the buyer or the seller.

22

Closing Statement

is an accounting of the parties debits and credits.

23

Prorations

are necessary to ensure that expenses and credits are divided fairly between the seller and the buyer.

24

Accrued items

Buyer Credits are expenses to be prorated that are owed by the seller but will be paid after the sale by the buyer. (water bills, interest on an assumed mortgage)

25

Prepaid items

Seller Credits are expenses to be prorated that have been prepaid by the seller but not fully used up, so they become credits to the seller (oil or fuel)

26

Interim interest

is charged by a lender when a borrower obtains a new loan