Real Estate Test Unit 14 Flashcards
accrued items
on a closing statement, items of expense that are incurred but not yet payable, such as interest on a mortgage loan or taxes on real property
affidavit of title
a written statement, made under oath by a seller or grantor of real property and acknowledged by a notary public, in which grantors 1) identify themselves and indicate marital status, 2) certify that since the examination of the title, on the date of the contract no defects have occurred in the title, and 3) certify that they are in possession of the property (if applicable)
affiliated business arrangement (ABA)
practice of one company offering a package of services to consumers
bring down
a second title search that is made after the closing and before any new documents are filed
closing
an event where promises made in a sales contract are fulfilled and mortgage loan funds (if any) are distributed to the buyer
closing disclosure
the CFPB form that itemizes all charges that are normally paid by a borrower and a seller in connection with settlement, whether required by the lender or another party, or paid by the lender or any other person
closing escrow
process of settlement in which the buyer and the seller never meet; the paperwork is handled by an escrow agent
closing statement
a detailed cash accounting of a real estate transaction showing all cash received, all charged and credits made, and all cash paid out in the transaction
credit
on a closing statement, an amount entered in a person’s favor- either an amount the party has paid or an amount for which the party must be reimbursed
debit
on a closing statement, an amount charged; that is, an amount that the debited party must pay
escrow
the closing of a transaction through a third party called an escrow agent, who receives certain funds and documents to be delivered upon the performance of conditions outlines in the escrow instructions
escrow account
the trust account established by a real estate professional under the provisions of the license law for the purpose of holding funds on behalf of the real estate professional’s principal or some other person until the consummation or termination of a transaction; trust account established by an escrow agent to hold funds pending distribution at the closing of a transaction
escrow closing
occurs when a disinterested third party is authorized to act as escrow agent (escrow holder) and to coordinate the closing activities on behalf of the buyer and the seller
escrow instructions
a document that sets forth the duties of the escrow agent, as well as the requirements and obligations of the parties, when a transaction is closed through an escrow
impound accounts
an account that the mortgage lender may require a borrower to have to accumulate funds to pay future real estate taxes and insurance premiums
loan estimate
a CFPB form that highlights the information that historically has been the most important to consumers. interest rate, monthly payment, and total closing costs are clearly presented on the first page
Mortgage Disclosure Improvement Act (MDIA)
enacted in July 2008 as an amendment to the truth in lending act to require mortgage loan cost disclosures to consumers. early disclosure of mortgage loan cost must be provided within 3 business days of receiving a consumer’s application for a mortgage loan; a creditor must wait 7 business days after providing the early disclosures before closing the loan; and a creditor must provide new disclosures and wait an additional 3 days before closing the loan, if a change occurs that makes the APR quoted in the early disclosure inaccurate beyond a specified tolerance
mortgage servicing transfer statement
disclosure required by the lender if the lender intends to sell or assign the right to service the loan to another loan servicer. the loan servicer must notify the borrower 15 days before the effective date of the loan transfer, including in the notice the name and address of the new servicer, toll-free telephone numbers, and the date the new servicer will begin accepting payments
passing papers
when parties to a transaction sit around a table and exchange copies of documents as the documents are executed
prepaid items
on a closing statement, items that have been paid in advance by a seller, such as fuel costs and some real estate taxes, for which the seller must be reimbursed by the buyer
prorations
expenses, either prepaid or paid in arrears, that are divided or distributed between the buyer and the seller at the closing
reduction certificate (payoff statement)
the document signed by a lender indicating the amount required to pay a loan balance in full and satisfy the debt; used in the settlement process to protect both the seller’s and the buyer’s interest
