Key Terms - Chapter 12

Question 1

Closing Disclosure (CD)

Answer 1

A form required by RESPA when closing a residential sale with a federally related loan

Question 2

credit

Answer 2

In a closing statement, money to be received or credit given for money or a stated obligation.

Question 3

debit

Answer 3

In a closing statement, an expense, money, or charge against the seller or buyer.

Question 4

double entry

Answer 4

An amount of money showing on the closing statement for both buyer and seller. It is an amount collected from one party and given to the other party, therefore, a debit to the first party and a credit to the other party.

Question 5

interim interest

Answer 5

Interest paid on the loan amount from the date of closing through the end of the closing month inclusive. Typically is prepaid at the time of closing.

Question 6

Loan Estimate (LE)

Answer 6

A standard form providing easy comparisons of loan costs that allows the borrower to compare offers from different lenders

Question 7

prorating

Answer 7

Dividing certain settlement costs between buyer and seller.

Question 8

Real Estate Settlement Procedures Act (RESPA)

Answer 8

Law requiring advance disclosure of settlement costs and other specified information mandating specific closing statement forms and prohibiting kickbacks.

Question 9

settlement

Answer 9

The consummation of a real estate contract. Also called closing.

Question 10

single entry

Answer 10

An item that appears as a debit or credit on either the buyer’s or seller’s closing statement, but not on both.

Question 11

Truth in Lending Act (TILA)

Answer 11

q

Question 12

TILA/RESPA Integted Disclosure (TRID)

Answer 12

q