Key Terms Unit 14

Question 1

Expenses to be prorated, owed to the seller but to be paid after the sell by the buyer.

Answer 1

Accrued items

Question 2

This helps to streamline the settlement process between all parties.

Answer 2

Affiliated business arrangement (ABA)

Question 3

Involves two major events, the promises made in the sales contract are fulfilled; second the mortgage funds are distributed to the buyer. Ownership of the property is transferred in exchange for the payment of the purchase price.

Answer 3

Closing

Question 4

A form that itemizes all charges that are normally paid by the buyer and a seller in connection with settlement.

Answer 4

Closing Disclosure

Question 5

An accounting of the parties debits and credits.

Answer 5

Closing statement

Question 6

Amount payable

Answer 6

Credit

Question 7

Amount owed or to be paid

Answer 7

Debit

Question 8

Trust account established by a real estate professional under the provisions of the license law for the purpose of holding funds.

Answer 8

Escrow account

Question 9

A disinterested third party is authorized to act as escrow agent and coordinate the closing activities. What are these closing activities called?

Answer 9

Escrow closing

Question 10

An account that the mortgage lender may require a borrower to have to accumulate funds to pay future real estate taxes and insurance premiums.

Answer 10

Impound account

Question 11

Must be provided to the customer 3 days after a loan application is submitted. This form highlights the information that has been most important to consumers. Interest rate, monthly payment, total closing costs are on the first page.

Answer 11

Loan estimate

Question 12

Changed how buyers, sellers, lenders, mortgage brokers, title agents, and real estate professionals prepare for a closing.

Answer 12

Mortgage Disclosure Improvement Act (MDIA)

Question 13

Is required if the lender intends to sell or assign the right to service the loan to another loan servicer.

Answer 13

Mortgage servicing transfer statement prepaid items

Question 14

The division of financial responsibility between the buyer and seller for such items such as loan interest, taxes, rents, fuel and utility bills.

Answer 14

Prorations

Question 15

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.

Answer 15

Real Estate Settlement Procedures Act (RESPA)

Question 16

Provides information about the exact location and size of the property. This indicates the location of all buildings, driveways, fences and other improvements. It should also indicate any existing easements and encroachments.

Answer 16

Survey

Question 17

The Consumer Financial Protection Bureau (CFPB) issues this to implement provisions of the Dodd-Frank Act intended to combine and clarify financing disclosures to consumers.

Answer 17

TILA-RESPA Integrated Disclosure Rule (TRID)