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MLO Flashcards

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1
Q

AARM

A

America Association of Residential Mortgage Regulators. Responsible for the creation of the NMLS

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2
Q

AFBA

A

Affiliated Business Arrangement. This is an arrangement between two different companies involved in providing services in the closing of a real state transaction. There can be no ownership interest. requires disclosures under RESPA.

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3
Q

AMCs

A

Appraisal Management Company. The middleman between appraisers and mortgage companies

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4
Q

AML

A

Anti-Money Laundering, law in place to require financial institutions to prevent, detect and report money laundering activities.

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5
Q

APOR

A

Average Prime Offer Rate. Rate used to determine whether a loan is high-cost or higher priced.

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6
Q

APR

A

Annual Percentage Rate. The APR calculates the annual percentage rate you would pay on the loan once the costs of getting the loan are factored in.

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7
Q

ARM

A

Adjustable Rate Mortgage. An Adjustable rate mortgage is a mortgage that will have a fixed rate for a set period of time and then the rate is adjusted. The rate will normally be adjusted once or twice a year.

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8
Q

ATR

A

Ability to Repay, rule that requires lenders to determine whether a borrower has the ability to repay their loan and requires verification of the information provided to prove the ability to repay (under QM)

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9
Q

AUS

A

Automated Underwriting System. EXample: LP & DU. Used to automatically underwrite conforming loans.

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10
Q

BSA

A

Bank Secrecy Act - requires suspicious activity reports (SARS) regarding suspicious activities.

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11
Q

CAIVRS

A

Credit Alert Verification Reporting System is a federal database of people who have delinquencies on any kind of federal debt.

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12
Q

CFPB

A

Consumer Financial Protection Bureau. Federal regulator that regulates the mortgage industry. (The Boss)

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13
Q

CHARM

A

Consumer Handbook on Adjustable Rate Mortgages. Required disclosure on ARM loans to educate the consumer about the type of the loan they are on.

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14
Q

CLTV

A

Combined Loan to Value, calculated by dividing the amount of a 1st lien loan and the total line of the credit on a HELOC or total amount of a 2nd lien loan by the purchase price or the appraised value of the property whichever is less.

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15
Q

COE

A

Certificate of Eligibility. Required document on VA loans to determine the amount of eligibility that veteran borrower has.

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16
Q

COFI

A

Cost of Funds Index, index used on ARM loans (margin + index)

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17
Q

DTI

A

Debt To Income, two ratios, front end and back end DTI. Front end DTI (housing expenses) is determined by dividing the amount of housing divided by the borrower’s gross income. Back end DTI is all debts divided by the borrower’s gross income. (Examples of debts: credit cards, car loans, student loans. Not included = cell phone bill and utilities)

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18
Q

DU

A

Desktop Underwriter. The AUS used by Fannie Mae

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19
Q

ECOA

A

Equal Credit Opportunity Act. A law in the US that makes it illegal for any creditor to discriminate against any applicant on the basis of race, religion, national origin, sex, etc

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20
Q

FACTA

A

Fair and Accurate Credit Transactions Act. Prevent identity theft, puts limits on information sharing. Amendment to FCRA.

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21
Q

FCRA

A

Fair Credit Reporting Act. Regulates how consumer-reporting agencies use consumer information.

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22
Q

FDIC

A

Federal Deposit Insurance Corporation. Regulates depository institutions.

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23
Q

FFIEC

A

Federal Financial Institutions Examination Council. Collects and distributes HMDA information.

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24
Q

FHA

A

Federal Housing Administration. The Federal Government Agency that oversees the US Housing Market. FHA mortgages are guaranteed by the Federal Government and offered by banks/lenders.

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25
FHLMC
Federal Home Loan Mortgage Corporation. A corporation authorized by Congress to provide a secondary market for residential mortgages.
26
FICO
Fair Isaac Corporation. The company that created the industry standard credit scores used by almost all lenders. The FICO score is a numeric summary of the information in your credit reports that represents your potential credit risk.
27
FinCEN
Financial Crimes Enforcement Network, the entity that a SAR would be reported to.
28
FNMA
Federal National Mortgage Association (Fannie Mae) a government sponsored entity created by Congress to increase access to mortgages. Mortgages offered under Fannie Mae guidelines are called "conforming" mortgages.
29
FTC
Federal Trade Commission
30
GFE
Good Faith Estimate. a GFE is a document that the lender is required to give a prospective borrower when they apply for a loan. The GFE is an estimate of all closing costs and fees required for the proposed mortgage loan.
31
GLB
Gramm-Leach-Bliley Act. Requires disclosure of information sharing policies.
32
GNMA
Ginnie Mae, Government National Mortgage Association. (The Fannie and Freddie of government lending)
33
GPM
Graduated Payment Mortgage. This is a type of mortgage on which the payments starts low and rises over time.
34
GSE
Government Sponsored Enterprise is a financial services corporation created by the US Congress (Fannie and Freddied Mac)
35
HARP
Home Affordable Refinance Program. HARP is a refinance program that allows eligible borrowers, with little to no equity in their homes, to take advantage of low interest rates and other refinancing benefits.
36
HECM
Home Equity Conversion Mortgage. Loan for borrowers 62 years and olders. Uses the equity in their home to create cash disbursement to the borrower
37
HELOC
Home Equity Line of Credit. HELOC is a loan in which the lender agrees to lend a maximum amount within an agreed loan term, where the collateral is the borrower's equity in his or hers house.
38
HMDA
Home Mortgage Disclosure Act. Requires lenders to report their lending patterns geographically to prevent redlining and reverse redlining.
39
HOA
Homeowner's Association
40
HOEPA
Home Ownership and Equity Protection Act, regulates high cost home loans.
41
HPA
Homeowners Protection Act, regulates the cancellation of private
42
HPML
Higher Priced Mortgage Loan
43
HUD
U.S Department of Housing and Urban development. HUD is the primary housing and lending regulatory authority in the US.
44
IO
Interest Only, a payment that only covers the interest on the loan.
45
IP
Investment Property, a non-owner occupied property that is rented out by the borrower.
46
IRRRL
VA Interest Rate Reduction Refinance Loan. This refinance loan allows you to lower your interest rate on an existing VA home loan.
47
LP
Loan Prospector. The AUS used by Freddie Mac
48
LTV
Loan-To-Value. LTV is a ratio use by the lender that divides the amount of money borrowed by the appraised value of the home expressed as a percentage. For example. a borrower may purchase a home appraised at $200K with down payment of $40K. This means he has a loan-to-value ratio of 80%.
49
MARS
Mortgage Assistance Relief Services Rule
50
MBS
Mortgage BAcked Security. These are investment instruments that are bundled by fannie, freddie and ginnie mae for sale on Wall Street.
51
MDIA
Mortgage Disclosure Improvement Act
52
MERS
Mortgage Electronic Registration System
53
MLO
Mortgage Loan Origination
54
MMI
Monthly Mortgage Insurance. Mortgage Insurance charged monthly on an FHA loan
55
MSA
Marketing Services Agreements
56
NINA
No Income No Asset loan. a loan that does not require income or assets
57
NIV
No Income Verification, a loan that requires no income verification
58
NMLS
Nationwide Multistate licensing system and registry
59
NOO
Non-Owner Occupied. A loan on a property not occupied by the owner. (investment property, vacation/second home)
60
O/O
Owner-occupied. A loan on a property owned by the owner
61
OCC
Office of the Controller of the Currency
62
P&I
Principal and Interest. Principal and interest rate are the two elements that go towards repaying your loan
63
PITI
Principle, Interest, Taxes and Insurance. These are the four main components of your monthly mortgage payment. Principal is the loan amount. Interest is the rate at which the finance charge you pay for borrowing is calculated. Taxes are the real estate taxes for which you are responsible, and insurance is the homeowners insurance that your lender requires you to have.
64
PMI
Private Mortgage Insurance. If you put down less than 20% most lenders or banks require you to have a private mortgage insurance. This can be put into your monthly mortgage payment or calculated into your rate
65
PPP
Prepayment Penalty. A penalty charged to a borrower if they pay their loan in full before the end of its term
66
PUD
Planned Urban Development, a type of development is designed real estate, usually a combination of housing, recreation, commercial, and industrial parks all within one development or subdivision
67
QM
Qualified Mortgage - a type of loan that requires the lender to make sure that borrower has the ability to repay the loan
68
SAR
Suspicious Activity Report. Report required to be made to FinCEN under the Bank Secrecy Act (BSA) when there is a suspicion of money laundering or fraud.
69
SISA
Stated Income, Stated Asset. The loan only requires the borrower to state their income and assets, does not require verification.
70
SRP
Service Release Premium, payment received by a lender on the sale of a closed mortgage loan to the secondary market
71
SSN
Social Security Number
72
TIL
Truth In Lending. TIL is an important document you will receive from the lender or bank within three days of your application. Within the document certain disclosures are set forth. such as finance charges, annual percentage rate (APR), amount financed, total of payments, and total sales price will be disclosed.
73
TIN
Tax Identification Number
74
TLTV
Total Loan to Value. Total Loan to value is calculated by dividing the sum of the 1st lien mortgage amount and the disbursed amount of a HELOC or 2nd lien by either the property's purchase price or appraised value (whichever is less)
75
TRID
TILA-RESPA Integrated Disclosure Rule. New legislation as of October 2015, requires the Loan Estimate and Closing Disclosure, replaces the GFE, TIL and HUD-1 disclosures.
76
UFMIP
Upfront Mortgage Insurance Premium. Mortgage insurance premium paid in a lump sum upfront on an FHA loan.
77
UST
Uniform State Test. 25 question addition to the NAtional Test Component that replaced the majority of individuals state tests.
78
VA
Department of Veterans Affairs. This Federal government agency guarantees mortgages that assist eligible veterans in buying homes.
79
VOD
Verification Of Employment. Used to verify that X amount of money is in a borrower's bank account
80
VOE
Verification of Employment. Used to verify that a borrower is employed
81
VOM
Verification of Mortgage. Used to verify that a borrower has X mortgage
82
VOR
Verification of Rent. Used to verify that a borrower pays rent and pays their rent on time.
83
YSP
Yield Spread Premium. Paid to the broker for giving a borrower a higher interest rate on a loan in exchange for lower upfront costs generally paid in origination fees, broker fees or discount points.
84

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