Chapter 5: Closing Flashcards Preview

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Flashcards in Chapter 5: Closing Deck (18)
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1
Q

Time when the buyer gives the seller the agreed upon purchase monied and in return the seller gives the buyer a deed that transfers title to the buyer

A

Closing/Settlement

2
Q

This person prepares statements and conducts proceedings at closing. Could be principal broker, supervising broker, escrow agent, buyer/seller attorney, lender representative, or title companys representative

A

Closing Agent

3
Q

What is the sequence of closing?

A
  1. Seller satisfaction of mortgage
  2. Sellers deed to buyer
  3. Buyers mortgage
4
Q

This is prepared for the buyer, seller and RE brokers, and is a detailed accounting of all financial aspect of closing and is used to determine exactly how much is due seller at closing

A

Closing Statement

5
Q

RESPA

A

Real Estate Procedures Act 1976

6
Q

This was created to ensure that buyer and seller are fully informed as to all settlement costs, and to standardize RE settlements practices. It is administered by HUD, and only if financed by a federally related mortgage loan

A

RESPA

7
Q

What does RESPA prohibit?

A
  1. Kickbacks or unearned fees
  2. Prohibits seller from requiring a buyer to purchase title insurance from one particular title company
  3. Prohibits the lender from collecting excessive amounts to cover property taxes and insurance payments in advance (can only collect a 2 month reserve placed in escrow account)
8
Q

T.R.I.D

A

TILA/RESPA Integrated Disclosure Rule

9
Q

also called the “Know Before You Owe” rule, combines several documents required by RESPA and TILA into two: one provided at the beginning of the process called a “Loan Estimate”, and one provided at the end called a “Closing Disclosure”.

A

TRID

10
Q

What does TRID rule not apply to?

A

HELOC, reverse mortgage, and loans secured by a mobile home

11
Q

What are the 3 categories of estimates?

A
  1. Zero Tolerance
  2. 10% Tolerance
  3. Unlimited Tolerance
12
Q

Costs for which the actual costs cannot exceed estimated costs by any amount. These are items over which lender has control (loan origination fee, transfer fee, etc)

A

Zero Tolerance

13
Q

Charges where consumer is allowed to shop and where consumer chooses not to use the provider recommended by lender. No limit to how much these charges can exceed

A

Unlimited Tolerance

14
Q

When should the loan estimate be sent to the borrower?

A

3 days after lender receipt of loan application

15
Q

When does loan estimate expire?

A

10 days after delivered or mailed unless the borrower indicated an intent to proceed with loan

16
Q

Shows actual loan and settlement costs and MUST be received by borrower at least 3 buisness days prior to the consumption of the loan

A

Closing Disclosure

17
Q

Only revisions allowed on closing disclosure are:

A
  1. If the interest rate changes in the period of time between the provision of closing disclosure and the loan consummation
  2. If APR changes by more than 1/8th of a percent, or if loan producer changed, or if prepayment penalty is added to closing
18
Q

This is expressed as debts or credits on statement, the decision as to which party pays what costs (some prorated)

A

Closing Costs