Closing Statements

Question 1

RESPA’s TRID Rule applies to what types of purchases?

Answer 1

Any closed end-loan secured by real property, including unimproved property

Question 2

What does RESPA require lenders to give to borrowers?

Answer 2

The correct figures pertaining to their closing costs.

Question 3

The TRID rule does not apply to what kinds of loans?

Answer 3

Reverse mortgages
Home equity loans
Loans secured by mobile homes or other dwellings that are not real property, if the dwelling is not attached to real estate.
Loans made by persons who are not considered “creditors” because they make five or fewer mortgages per year.
Certain no-interest loans secured by subordinate liens made for the purpose of down payment, or similar home buyer assistance, property rehabilitation, energy efficiency, or foreclosure avoidance or prevention

Question 4

List three items that a buyer usually pays at closing.

Answer 4

Credit fees
Loan origination
Homeowner’s insurance

Question 5

If an item is paid for in advance by the seller, how will it be handled on the settlement statement?

Answer 5

The buyer will receive a debit and the seller will receive a credit.

Question 6

What do you call those items that the seller has incurred but have not been paid and how will they be handled on the settlement statement?

Answer 6

These items are paid in arrears. The buyer will get a credit and the seller will get a debit.

Question 7

What page of the Loan Estimate form gives the details of the closing costs?

Answer 7

page 2

Question 8

When must the Closing Disclosure be delivered to the buyers?

Answer 8

at least 3 days prior to closing

Question 9

RESPA

Answer 9

created to ensure that the buyer and seller in a residential real estate transaction involving a new first mortgage loan have knowledge of all settlement costs

Question 10

According to the TRID rule Effective October 1, 2015

Answer 10

Lenders must give a copy of the booklet, “Your home loan toolkit” to every person at the time of application for a loan.
Lenders must provide a Loan Estimate of settlement costs at the time of loan application or within three business days of application.
A Closing Disclosure, a form designed to detail all financial particulars of a transaction, must be delivered to the borrower at least three days before closing. The actual time frame is based on the method of delivery. The settlement agent must also provide the seller with the Closing Disclosure, which may be done at consummation.

Question 11

Closings that must comply with TRID include:

Answer 11

Any closed end-loan secured by real property, including unimproved property.

Question 12

Closings that do not require compliance include:

Answer 12

Reverse mortgages
Home equity loans
Loans secured by mobile homes or other dwellings that are not real property, if the dwelling is not attached to real estate.
Loans made by persons who are not considered “creditors” because they make five or fewer mortgages per year.
Certain no-interest loans secured by subordinate liens made for the purpose of down payment, or similar home buyer assistance, property rehabilitation, energy efficiency, or foreclosure avoidance or prevention.

Question 13

closing disclosure statement

Answer 13

The Closing Disclosure (settlement statement) has a list of the debits and credits for both the buyer and the seller.

Question 14

Debit

Answer 14

A debit is money that the buyer or seller needs to pay at closing.

Question 15

credit

Answer 15

A credit is money that the buyer or seller receives at closing, either because it was already paid, it’s being reimbursed or there is a promise to pay.

Question 16

Items that the buyer usually pay include:

Answer 16

Mortgage recording fees
Title insurance
Appraisal fees
Credit fees
Survey
Loan origination
Attorney fees
Homeowner’s insurance
Reserves deposited with the lender, such as insurance, taxes, assessments
Private Mortgage Insurance (PMI), if applicable

Question 17

The buyer’s debits include:

Answer 17

Contract sales price

Other expenses, such as loan origination fee, closing fee, recording fee, attorney fees

Question 18

Buyer’s Credits include:

Answer 18

Earnest money or deposit

Loan amount

Question 19

Items that the seller usually pay include:

Answer 19

Broker commission
Title fees, such as for clearing the title
Fees for preparing the deed
Attorney fees

Question 20

Seller’s Debits:

Answer 20

Loan balance
Unpaid items due from seller
Other expenses, such as closing fees and document preparation

Question 21

Seller’s Credits

Answer 21

Contract sales price

Items paid for in advance

Question 22

Some expenses paid at closing must be prorated or divided proportionately between the buyer and the seller. The most common items that fall into this category include:

Answer 22

Taxes
Insurance
Mortgage interest
Utilities

Question 23

Loan Estimate and Closing Disclosure forms

Answer 23

provide a means for borrowers to comparison shop more effectively for competing loan offers. The new forms clearly break down the costs of the loan, such as the interest rate, mortgage insurance costs, and closing costs.

Question 24

This form integrates and replaces the RESPA GFE and the initial TIL for these transactions.

Answer 24

For closed-end credit transactions secured by real property (other than reverse mortgages), the creditor is required to provide the consumer with good-faith estimates of credit costs and transaction terms on the Loan Estimate form