Closing Statements Flashcards

1
Q

What does the abbreviation RESPA stand for?

A

Real Estate Settlement Procedures Act

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2
Q

What does the abbreviation TRID stand for?

A

TILA/RESPA Integrated Disclosure

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3
Q

Which one of these items would not be prorated on the day of closing?

  • Property Taxes
  • Homeowner’s Association fees
  • Rents for investment property
  • Attorney fees
A

Attorney fees

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4
Q

What are some items that are paid in advance during the closing process?

A
  • Insurance
  • Interest (Buyer)
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5
Q

RESPA covers loans on what type of transactions?

A

Residential involving a new first mortgage loan

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6
Q

What does CLO stand for?

A

Computerized Loan Originations

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7
Q

The buyer has the right to review the Closing Disclosure form within how many business days before closing?

A

Three

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8
Q

What item would be a credit to the buyer on the settlement statement?

A

Loan amount

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9
Q

How does a prorated item appear on the settlement statement?

A

As a debit to one party and a credit to the other party for the same amount

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10
Q

The buyer has the right to review the Loan Estimate form within how many days after the loan application?

A

Three

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11
Q

Does signing the Closing Disclosure document indicate acceptance of the loan?

A

No

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12
Q

What does the abbreviation TIP stand for?

A

Total interest percentage

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13
Q

What’s the purpose of a buyer’s escrow account when purchasing real estate?

A

To hold money for certain payments until they are paid out

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14
Q

How many pages does the Closing Disclosure document contain?

A

Five

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15
Q

The Closing Disclosure form replaced what forms?

A

HUD-1/Final TIL

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16
Q

Real Estate Settlement Procedures Act (RESPA) of 1974

A

Act passed to ensure that the buyer and seller know all settlement costs.

17
Q

When was the TRID Rule effective and what is it part of?

A

An updated RESPA law effective Oct 1, 2015

18
Q

Paid in arrears

A

Expenses that the seller incurred but have not yet been billed for at the time of closing.

19
Q

Loan Estimate

A

A form that breaks down the costs of the loan (interest rate, mortgage insurance costs, and closing costs)