Who's Who?

Question 1

loan originator

Answer 1

Works with borrowers to find them the best mortgage solution possible depending on their needs and qualifications for gains

Question 2

lender

Answer 2

A person or company that makes loans for real estate. Sometimes referred to as mortgagee. Some lenders also originate mortgages.

Question 3

investor

Answer 3

A person or organization that puts money into financial arrangements, property, etc., with the expectation of achieving a profit.

Question 4

consumer

Answer 4

An individual who may obtain financial services (they’re shopping).

Question 5

customer

Answer 5

Someone who is in an ongoing process or relationship with a financial service provider.

Question 6

regulator

Answer 6

A person or institution that supervises and controls a financial system in order to guarantee fair and efficient markets and financial stability. State regulators oversee mortgage origination in their particular state while federal regulators oversee at the federal level.

Question 7

application

Answer 7

The first step in the official loan approval process. It’s used to record important information about the potential borrower necessary to the underwriting process.

Question 8

terms

Answer 8

Specific conditions and provisions of the loan.

Question 9

mortgage broker

Answer 9

A person that originates and processes loans for multiple lenders. Mortgage brokers are intermediaries who receive compensation for negotiating, placing, or finding mortgage loans for borrowers. They are mortgage loan originators that sell their originated applications to companies.

Question 10

non-depository institution

Answer 10

Any financial institution not regulated or covered by the Federal Deposit Insurance Act. Typically, such institutions do not maintain customer transaction accounts such as checking and savings.

Question 11

person

Answer 11

A company, corporation, LLC, partnership, natural person, etc.

Question 12

natural person

Answer 12

An individual human being.

Question 13

processor

Answer 13

Works for a mortgage loan originator and provides clerical functions such as collecting documents or verifying information with borrowers. They are not permitted to negotiate rates and terms with borrowers.

Question 14

independent contractor

Answer 14

A person, business, or corporation that provides goods or services under a written contract or a verbal agreement. Unlike employees, independent contractors do not work regularly for an employer but work as required, when they may be subject to law of agency.

Question 15

underwriter

Answer 15

An individual whose role is also administrative or clerical, they will review client information to determine if it is in line with the loan program guidelines. They make final determination based on loan program guidelines of whether to approve or deny the loan.

Question 16

appraiser

Answer 16

A qualified individual who uses his or her experience and knowledge to prepare the appraisal estimate. They follow USPAP guidelines, are licensed at the state level, and may need to register or be licensed by local jurisdictions.

Question 17

appraisal

Answer 17

The act of a qualified appraiser giving an estimate of a property’s fair market value based on recent sales of comparable homes in the area and the features of property. Required before loan approval to ensure that the mortgage loan amount is not more than the value of the property.

Question 18

closing cost

Answer 18

Fees for a final property transfer not included in the price of the property. Typical closing costs include charges for the mortgage loan, for example, origination fees, discount points, appraisal fees, survey, title insurance, legal fees, real estate professional fees, prepayment of
taxes and insurance, and real estate transfer taxes. Also called “settlement costs.”

Question 19

Uniform Standards of Professional Appraisal Practice (USPAP)

Answer 19

Set guidelines for appraisers.

Question 20

title agent

Answer 20

May be referred to as title company or individuals working for the company. Any institution qualified
to issue title insurance or authorize it through
agents it employs.

Question 21

abstractors

Answer 21

A person who prepares and certifies the history of ownership of a property (known as title). They are typically an employee of a title company, or an attorney, and perform the title search.

Question 22

title insurance

Answer 22

Insurance that protects the lender or homebuyer against any claims that arise from arguments about ownership
of the property (title).

Question 23

real estate agent

Answer 23

An independent party working on behalf of the buyer or seller in a purchase transaction. Works for a real estate broker. Sometimes referred to as a Realtor or real estate broker; focuses on the sale of the property and is typically licensed in the state where they operate.

Question 24

real estate broker

Answer 24

A licensed individual or firm that charges a fee to serve
as the mediator between the buyer and the seller. Mortgage brokers are individuals in the business of arranging funding or negotiating contracts for a client, but they do not loan money. A real estate broker is
someone who helps find a house; more experienced and qualified than an agent and may employ agents.

Question 25

origination

Answer 25

The process of preparing, submitting, and evaluating a loan application. It generally includes a credit check, verification of employment, and a property appraisal.