Chapter 17 Yellow Text Closing

Question 1

closing

Answer 1

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

Question 2

Title or Opinion of title

Answer 2

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

Question 3

Survey

Answer 3

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

Question 4

Title evidence

Answer 4

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

Question 5

Payoff statement

Answer 5

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

Question 6

Bring Down

Answer 6

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

Question 7

an affidavit of title

Answer 7

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.

Question 8

Face to face closing

Answer 8

the parties meet face to face to close the transaction.

Question 9

The exchange

Answer 9

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

Question 10

Escrow closing

Answer 10

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

Question 11

RESPA

Answer 11

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.

Question 12

Mortgage Disclosure Improvement Act (MDIA)

Answer 12

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.

Question 13

RESPA applies to:

Answer 13

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.

Question 14

Affiliated Business Arrangement (ABA)

Answer 14

practice of one company offering a package of services to consumers

Question 15

TILA RESPA Integrated Disclosure Rule

Answer 15

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

Question 16

The Loan Estimate Form

Answer 16

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.

Question 17

The Closing Disclosure Form

Answer 17

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.

Question 18

Your Home Loan Toolkit

Answer 18

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.

Question 19

The Mortgage Disclosure Act

Answer 19

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.

Question 20

Debit

Answer 20

is a charge!

is an amount to be paid by the buyer or the seller

Question 21

Credit

Answer 21

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

Question 22

Closing Statement

Answer 22

is an accounting of the parties debits and credits.

Question 23

Prorations

Answer 23

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

Question 24

Accrued items

Answer 24

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)

Question 25

Prepaid items

Answer 25

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)

Question 26

Interim interest

Answer 26

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