Term
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Definition
| Real Estate Settlement Procedures Act |
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Term
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Definition
1) To protect consumers from unearned fees
2) To limit the amount of funds that creditors can require consumers to deposit into escrow accounts
3) To establish disclosures, policies, and procedures to facilitate timely communications between loan servicers and consumers |
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Term
| Loans covered by Respa defined as loans secured by first or subordinate lien on residential property |
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Definition
1) Made with funds insured by the federal government (e.g. FHA loans)
2) Made with collateral insured by the federal government (e.g. flood insurance)
3)Made with funds from a lender regulated by the federal government or that has deposits insured by the federal government (e.g. depository institutions regulated by the FDIC or NCUA)
4) Intended for sale to Fannie Mae or Freddie Mac
5) Made by a creditor regulated under the Truth-in-Lending Act
6) Made by a mortgage broker and assigned to a creditor |
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Term
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Definition
1) Business, commercial or agricultural purposes
2) Temporary financing, such as construction loans that are not converted to permanent financing by the same lender
3) Loans secured by a vacant land unless the proceeds are used to located a manufactured home or construct a structure within 2 years from the settlement date
4) Assumptions permissible without lender approval
5) The sale of a loan into the secondary market, such as the sale of a loan to Fannie Mae or Freddie Mac
6) Loan conversions, when a new note is not required and the provisions are consistent with those of the original mortgage |
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Term
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Definition
1) Referral- an action written or oral that influences the selection of a provider of a settlement service
2) Settlement Service- service provided in connection with a real estate settlement
3) Thing of value- payment synonymous with the giving or receiving of anything of value and does not require transfer of money
4) Agreement or Understanding- an agreement or understanding for the referral of business related to settlement services
5) Fee-splitting and Kickbacks- paying or accepting unearned fees or marking up the fee for a particular settlement service and splitting the overage
6) Affiliated Business Arrangement- many service providers have a business relationship and an ownership interest in other settlement service providers. Profit-sharing by these affiliated companies is permissible under Respa as long as it is communicated to the borrower through an "affiliated business arrangement disclosure."
7) Sham Affiliated Business Arrangement- a partnership or joint venture created between settlement service providers for illegal purposes of splitting fees
8) Borrower Credit- Historically referred to as "Yield Spread Premium" (YSP) is a fee paid to the borrower by the lender when a loan is originated at a higher interest rate than the lowest rate for which the borrower qualifies. It is used to subsidize closing costs such as origination or broker fee because it is financed so that out-of-pocket closing costs are "Borrowed" from the lender. |
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Term
| Yield Spread Premium (YSP) |
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Definition
| The fee that a lender pays for a loan with an interest rate higher that the par rate on the day the loan was locked or closed |
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Term
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Definition
| A legal mechanism for local governments to regulate the use of privately owned real property in order to prevent conflicting land use and promote orderly development |
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Term
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Definition
| A loan settlement in which the funds for the loan are disbursed on the same day as closing |
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Term
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Definition
| A deed in which the grantor warrants that the title is clear and free of any encumbrances |
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Term
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Definition
| A revolving line of credit used by mortgage brokers in order to fund loans |
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Term
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Definition
| A fee charged by a lender and used to offset the cost associated with the holding a mortgage until it can be sold on the secondary market |
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Term
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Definition
| The voluntary renunciation, abandonment or surrender of right or privilege |
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Term
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Definition
| Having no legal force or effect; unenforceable |
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Term
| Verification of Employment (VOE) |
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Definition
| A document signed by the borrower's employer verifying his/her position and salary |
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Term
| Verification of Deposit (VOD) |
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Definition
| A document signed by the borrower's financial institution, verifying the status and balance of his/her financial accounts |
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Term
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Definition
| An estimate of the value of the consumer's principal dwelling |
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Term
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Definition
| A premium of up to 1.85% paid to the VA on a VA-backed loan |
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Term
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Definition
| A long-term, low- or no-down payment loan guaranteed by the Department of Veterans Affairs. Restricted to individuals qualified by military service |
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Term
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Definition
| Interest charged in excess of the legal limit as established by state law |
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Term
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Definition
| Uniform Residential Appraisal Report. The document used to convey information resulting from an appraisal |
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Term
| Upfront Mortgage Insurance Premium (UFMIP) |
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Definition
| Mortgage insurance for an FHA loan that is paid at closing |
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Term
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Definition
| A debt that has no collateral or security |
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Term
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Definition
| An instrument that transfers title from one party (grantor)to another party (grantee), without providing public notice of a change in ownership |
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Term
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Definition
| An exam component set forth by the NMLS as part of testing requirements for individuals to obtain licensure as mortgage loan originators |
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Term
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Definition
| Real estate with free and clear title |
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Term
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Definition
| The process of evaluating a loan applicant's financial information and facts to determine whether a loan is an acceptable risk for a lender |
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Term
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Definition
| A term used in advertising that triggers the requirement to provide additional specific information required under the federal Truth-in-lending Act |
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Term
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Definition
| The current rate that the U.S. Treasury is paying on securities it issues |
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Term
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Definition
| States in which the lender's interest in a home is secured by a deed of trust |
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Term
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Definition
| An examination of county and/or municipal records to determine the legal status of real property |
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Term
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Definition
| A policy, usually issued by a title insurance company, which insures against errors in the title search |
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Term
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Definition
| Temporary title insurance expected to soon be replaced by a title insurance policy |
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Term
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Definition
| A report containing the history of the title associated with a particular property |
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Term
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Definition
| A document that gives evidence of an individual's ownership of property |
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Term
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Definition
| A method of expressing the cost of financing it is the difference between the loan amount and the sum of the payments made over time |
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