Module 1 Flashcards
Unique Identifier
a number or other identifier assigned by protocols established by the NMLS and Registry
Loan Processor / Underwriter
an individual who performs clerical or support duties as an employee at the direction of and subject to the supervision and instruction of an individual licensed as a residential mlo or exempt from licensure
Banker
a person who accepts an application for a residential mortgage loan, makes a loan, or services loans, and who is approved for:
- by the Department of Housing and Urban Development (HUD) as a lender with direct endorsement underwriting authority
- an approved seller or servicer under Fannie Mae or Freddie Mac
- or an approved issuer for the Ginnie Mae
Nontraditional mortgage product
a mortgage product other than a 30 year fixed rate mortgage
Real estate brokerage activity
offering or providing real estate brokerage services to the public
- acting as a real estate broker
- bringing together parties interested
- negotiating
- engaging
- offering
Homestead Property
Name commonly used to refer to residential property in the section of the Texas Constitution concerning reverse mortgages
Only certain forms of debt may be secured by a homestead, and a homestead may only be foreclosed upon to pay:
- a debt secured by a portion or all of the purchase money of the homestead
- taxes due on the homestead
- an owelty or partition
- the refinance of a lien against a homestead
- a debt arising from the work and material either used to make improvements on repair
- a loan
- a reverse mortgage
- the conversion and refinance of a personal property lien secured by a manufactured home to a lien on real property
CANNOT EXCEED 80% OF THE FAIR MARKET VALUE OF THE HOMESTEAD
Commissioner may issue administrative penalties for violations of Texas mortgage law, up to this amount per violation
$ 25,000
Books and records must be maintained by a licensee and accessible to the Commissioner for at least this amount of years
3 years +
“SMAART”
Systems - concerns the adequacy of the existing compliance program, policies, and procedures. Means of managing, governing, recordkeeping, planning, responsiveness
Monitoring - reviews standards for supervising staff performance and responsibilities
Assessment - determines if the company’s present compliance management system allows for periodic reviews or audits of performance. Regulatory and functional compliance in all operations
Accountability - focuses on the board of directors and compliance officers responsibilities and duties are fulfilled and effective
Response - determines the adequacy of he compliance program in imposing corrective actions, properly tracked and monitored, and how consumer complaints/complaint resolutions are incorporated in monitoring process
Training - reviews how compliance information and goals are used by all personnel responsible for meeting compliance and customer service obligations, whether the program is appropriate for the licensee’s size and consistent with offered products/services
Mortgage Industry Advisory Committee
- comprised of 6 members who advise and assist the Commissioner
- members are appointed by the Commissioner
- must include 6 individuals licensed as a residential MLO, two of whom must hold an active real estate broker/salesperson license in Texas, serving staggered 3-year terms.
They advise the Commissioner with respect to the proposal and adoption of rules relating to:
- licensing
- education and experience requirements for licensees
- conduct and ethics of licensees
- application forms and formats
- interpretation, implementation, and enforcement
The Commissioner
- helps ensure effective supervision of the applicable Texas law,
- able to deny, suspend, revoke, condition, or decline license
- able to order restitution for a violation
- impose an administrative penalty on a person subject to licensing regulation
- issue orders or directives as provided
MAY IMPOSE AN ADMINISTRATIVE PENALTY IN AN AMOUNT UP TO $ 1000 PER DAY THAT THE VIOLATION CONTINUES
Finance Commission
May grant an exemption from the licensing requirements
HELOC (Home Equity Line of Credit)
a form of an open-end account that may be debited from time to time, under which credit may be extended from time to time.
Reverse Mortgages
Another name commonly used to refer to it is “Homestead Property”
It is an extension of credit secured by a voluntary lien on residential property created by a written agreement with the consent of each owner and owner’s spouse, without recourse for personal liability.
Made to individuals who are 62 + years of age
Have either fixed or adjustable rates
Provides advances to the borrower based on the equity available in that individual’s home, or for the purchase of homestead property that the borrower will occupy as a principal residence.
THEY DO NOT REQUIRE PAYMENT OF PRINCIPAL AND INTEREST IN THE SAME MANNER AS OTHER MORTGAGE LOANS
REPAYMENT IS NOT REQUIRED UNTIL:
- all borrowers have died
- the property securing the loan is sold or transferred
- all borrowers have ceased to occupy the home for a period of < 12 consecutive months without the lender’s written approval
- if the extension of credit is used for the purchase of homestead property, the borrower fails to timely occupy the homestead property as his principal residence within a specified period stipulated in the written agreement creating the lien on the property
- the borrower has:
- defaulted on obligation to repair, maintain, pay taxes/assessments, or insure the property
- committed fraud in connection with the loan
- failed to maintain the priority of the lien after receiving notice from the lender
Advances of reverse mortgage loan funds are:
- an initial advance at any time and future advances at regular intervals
- an initial advance at any time and future advances in amounts and at times requested by the borrower until the established credit limit is reached
- an initial advance at any time and future advances at regular intervals with amounts which may decrease at the request of the borrower
The Supreme Court
responsible for promulgating rules of civil procedure for reverse mortgage loan foreclosure proceedings
Wrap Financing Fraud
Involves a seller-financed sale of a property that is already subject to an outstanding lien, often without notifying the existing lender, not the new buyer, of the existing lien.
In a non-judicial foreclosure, the borrower must be given how many days to cure the default before proceedings for a foreclosure sale may begin?
20 days
If a property is sold in a judicial foreclosure, and the sale results in a deficiency, an action to determine the fair market value of the sale may be brought within how many days after the date of sale?
90 days
Deed in Lieu of Foreclosure
- holder of the debt may void the deed conveying the property as satisfaction of the debt
- the deed may be voided within 4 years of the date on which the deed is executed and foreclosed under the original deed of trust
- if the holder of a debt does elect to void a deed in lieu of foreclosure, the priority of its deed of trust will not be affected or impaired by the execution of the deed in lieu of foreclosure
What judgment can be used if the foreclosure failed to generate sufficient funds to cover both debts?
Deficiency judgment
Non-judicial Foreclosure
used when a mortgage or deed of trust includes a power of sale clause and the loan was used to purchase a home or to refinance the original loan
power of sale exists
- carried out without the involvement of a court or judge
Judicial Foreclosure
is the process of filing a lawsuit to obtain a court order to foreclose, and typically occurs when a government entity seeks taxes owed on a property, though a private lender may choose judicial foreclosure as well
is used when NO power of sale is present in the mortgage or deed of trust
property would be sold at auction typically
Combination Foreclosure
if a homeowner was the recipient of a home equity loan or a loan to pay property taxes, the lender is required to obtain a court order approving the foreclosure before moving forward with a non-judicial foreclosure
