Things You Need To Learn Flashcards
1099
Tax form provided to borrower by employer when takes are not withheld
3 Types of deeds what are they?
Quitclaim deed, Grant deed, Warranty Deed.
3-7-3 Rule
The initial LE must be delivered or placed in the mail to the applicant within 3 business days after receiving an application and 7 days prior to loan consummation.
The Closing Disclosure must be received by the borrower within 3 business days of closing.
4 Key Types of Closing
Full Closing, A la carte closing, Mail away closing, Attorney Closing
4506-T
Use Form 4506-T to request tax return information. Taxpayers using a tax year beginning in one calendar year and ending in the following year (fiscal tax year) must file Form 4506-T to request a return transcript.
A borrower may only have one FHA insured loan at a time with four exceptions:
Job Relocation (minimum distance 100 miles)
Increase in Family Size (if approved, the first mortgage must be paid down to 75% LTV)
Vacating a Jointly Owned Property
Non-Occupying Co-Borrower
A La Carte Closing
The title company provides the title information to the Lender.
A notary company contracted by the Lender conducts the signing of the documents.
The Lender will then perform the disbursement.
A QM loan is one that has met the ATR requirements and meets some additional rules that focus on prohibiting risky loan features (predatory lending)
Risky Loan Features Negative Amortization Interest-only payment feature Loan terms in excess of 30 years Prepayment Penalties Balloon Mortgages
In addition, for all types of QM loans, the points and fees charged to the borrower cannot exceed 3% of the total loan amount unless the loan amount is $100,000 or less.
Accrued interest
In finance, accrued interest is the interest on a bond or loan that has accumulated since the principal investment, or since the previous coupon payment if there has been one already. For a financial instrument such as a bond, interest is calculated and paid in set intervals (for instance annually or semi-annually).
Accrued interest will vary depending on what time of the month a loan closes. One reason many people close at the end of the month is because it reduces the interest that accrues in advance of the first monthly mortgage payment.
All FHA loans require Mortgage Insurance Premium
FHA charges
Upfront Mortgage Insurance Premium (UFMIP)
o (an amount equal to 1.75% of the mortgage (loan amount)
The UFMIP is added to the loan amount to calculate the total loan amount.
Monthly Mortgage Insurance Premium
o (based on the initial LTV ratio and loan term)
Amortization
An amortized loan includes regular periodic payments of both principal and interest, that are paid within the term of the loan. Amortization schedules detail the monthly payments and how much of each payment goes to principal and interest.
Annual Income
All the income you’ve earned over the year in wages, salary, tips, bonuses, commissions, and overtime amount to your annual income. In the case of mortgage applications, lenders primarily focus on income through wages or salary.
Annual Property Taxes
Annual property reports are documents containing of government property (property titled to the federal government and bought under an award). The list covers property bought between the first day of the award and the federal fiscal year close.
Annual Property Taxes is another prepaid item and is the amount equal to the upcoming tax bill(s). Tax bills can be due annually, semi-annually, or quarterly. The amount to be prepaid is based on the previous year’s tax bill.
Appraisal
When you apply for a home loan, your lender will require that an appraisal is done on the property. This process involves assessing the value of the home through an inspection and by comparing it to similar real estate in the area.
Appraisal Fraud
Home appraisal fraud occurs when a home is fraudulently inflated beyond its actual value. A higher home appraisal usually leads to a higher home price, and more cash to the home seller. A fraudulent higher appraisal report is bad news to buyers, as it can add a higher debt burden to the purchase of a home.
Generally, home appraisal fraud comes with some red flags, including key data missing from the appraisal or fake renovations cited on the appraisal. If you suspect your home appraisal has red flags, you can always get a second appraisal—this may cost up to $500 depending on the size of the home, but it might be worth it if it keeps you from a bigger issue.
Appraisal requirements
Property Conditions
Must be habitable
Must have permanent source of heat
If the property is located on a private road, a private road maintenance agreement is required
Appraised Value
An appraised value pertains to the assessed value of real property in the opinion of a qualified appraiser or valuer. It is usually used as a pre-qualification & risk-based pricing factor related to the issuance of mortgage loans by a financial institution.
APR
The annual percentage rate is the cost of borrowing money from the lender, shown as a percentage of your mortgage amount. It is calculated by using a formula set by federal law and disclosed to the customer to aid in comparing different offers of credit. Finance charges imposed by the lender are included in this calculation. In addition, the APR includes any origination fees and mortgage insurance charged by the lender.
ARM
Adjustable rate mortgages have interest rates that change periodically. Such loans have an introductory period of low, fixed rates, after which they vary, depending on an adjustment index.
ATR
Ability to repay
ATR and QM rules do not apply to
Open-ended credit plans
HELOC’s
Reverse Mortgages
Temporary bridge loans with terms of 12 months or less
Construction loans and construction-to-perm loans with terms of 12 months or less
ATR and QM rules do not apply to:
Open-ended credit plans
HELOC’s
Reverse Mortgages
Temporary bridge loans with terms of 12 months or less
Construction loans and construction-to-perm loans with terms of 12 months or less
ATS
Approval to schedule
Attorney Closing
A Full closing where the Attorney's office: Completes the Title work Prepares the Settlement Statement Conducts the Signing Disburses the funds
Balloon Mortgage
is payable in full after a period that is shorter than the term of the loan.
Balloon Payment
Balloon loans come with large payments that are to be paid at the end of the mortgage term, separate from the mortgage payments made monthly.
Bankruptcy
Declaring bankruptcy means that you have submitted an application to a court that admits you are unable to pay back your debts. Filing for bankruptcy ruins your credit, which leads to problems when applying for loans in the future.
Banks
Depository institutions Take and lend money Holds loans in portfolio Sells loans to Secondary Market Offers various loans, credit cards, student loans etc.
Bond Loans
these loans are typically managed by each state since each state has their own unique bond program(s). These programs target first time homebuyers and low to moderate income families. They mostly provide great pricing and down payment assistance.
Borrower
A mortgage borrower is someone who takes out a home loan to purchase a property. When that person borrows the money, they are making a commitment to pay back that amount in full, on time, and with interest.
Bridge Loan
enables customers to access the equity in their current home and use it towards the down payment on the home they are purchasing before the current home is sold. This is also referred to as “gap financing”.
Buy-Down Mortgage
the interest rate is reduced during the initial years of the loan gradually increasing each year until the rate becomes fixed at the note rate.
CAPITAL
Capital refers to the liquid assets the borrower has available to make the down payment on the loan, pay the closing costs, and have on hand reserves necessary to make the initial mortgage payments. This can be simplified into 2 factors: cash to close (equity/down payment/closing costs) and reserves (money available after closing).
Cash-out Refinance
A cash-out refinance is when you replace your current home loan with a new mortgage. You agree to a larger loan amount in order to use the equity you’ve earned on your home.
out limited to the lesser of 2% of the principal amount of the new loan or $2,000
Power of Attorney not permitted for FNMA; sometimes permitted for FHLMC
CD
Certificate of Deposit (CD)
CD
Closing Disclosure
Certificate Of Eligibility (COE)
Is issued by the VA and is evidence that the
veteran meets the basic requirements for a VA
loan.
CHARM
Consumer Handbook on Adjustable Rate Mortgages (CHARM) This book informs the borrower of the risks involved with adjustable rate mortgages.
CLA
conditional loan approval
Closing
The legal execution/consummation of the loan. This includes the signing and recording of all loan documents, creating the mortgage,
Closing checklists
Closing checklists are important to keep track of all the items that need to be taken care of prior to closing. It lists everything from the payments that need to be made to the documents that need to be signed.
Closing costs and what is included *hint 9
Closing costs involve all the fees and costs that need to be paid before or at the time of closing. Your mortgage contract and disclosures go over all the costs that will be incurred by you as the buyer, the seller, and the lender. Costs incurred may include loan origination fees, discount points, appraisal fees, title searches, title insurance, surveys, taxes, deed-recording fees and credit report charges.
Closing Disclosure
Out of the numerous documents that you will come across during the mortgage process, your Closing Disclosure is one of the most important. This 5-page document specifies the terms of your home loan, such as your monthly payments, interest rates, and closing
Closing Disclosure
Lists and describes all the costs associated with the transaction
Closing Disclosure CD
A five-page form that provides final details about the mortgage loan that has been selected. It includes the loan terms, projected monthly payments, how much the borrower will pay in fees and other costs involved in getting a mortgage.
Closing establishes
Closing establishes a first lien on the property and creates an enforceable debt. In other words, it gives the mortgage banker the right to expect repayment of the borrowed funds and recourse should the borrower default on the loan.
Co-Borrower
By having co-borrowers join your loan application, their income, assets, and credit score can help you qualify for a loan and get lower interest rates. Co-borrowers are equally liable to pay back the loan
Co-signer
A co-signer can help you qualify for mortgages by signing the loan application with you. Co-signers have no interest in owning the property, but their credit score, income, and assets will count towards getting you a lower interest rates.
COC
Change of Circumstance
COE
“Entitles” the Veteran to a loan guarantee of 25% of the published county limit. The guarantee protects the lender against default which allows the lender to lend up to 100% LTV to our Veterans with confidence. The COE indicates the amount of entitlement available to the veteran.
COFI
The 11th District Cost of Funds Index (COFI) is a monthly weighted average of the interest rates paid on checking and savings accounts offered by financial institutions operating in Arizona, California, and Nevada.
Combined Loan to Value (CLTV)
The combined loan to value (CLTV) ratio is a calculation used by mortgage and lending professionals to determine the total percentage of a homeowner’s property that is encumbered by liens (debt obligations).
Community Property
In states that recognize community property, a special form of joint tenancy exists between husband and wife, with each owning one-half interest. Upon death, the decedent’s interest passes in a manner like tenants in common. Words in the deed such as “John and Mary, husband and wife as community property”, establishes community property ownership.
Conforming Loan
A conforming loan is a mortgage that is equal to or less than the dollar amount established by the limit set by the Federal Housing Finance Agency (FHFA) and meets the funding criteria of Freddie Mac and Fannie Mae.
Conventional Loan
A conventional loan is a type of mortgage loan that is not insured or guaranteed by the government. Instead, the loan is backed by private lenders, and its insurance is usually paid by the borrower These mortgages have an added risk, and therefore require higher down payments. PMI
Correspondent Lenders
Originate and close loans
Sell loans to other mortgage bankers
Servicing and income are transferred to the new loan owner
CPA
Certified Public Accountant
CPL
Closing Protection Letter
Credit history
When applying for a mortgage, lenders will be looking at your credit history, which is a compilation of your borrowing and payment habits. It shows the lender how likely you are to repay the loan they grant you.
Credit Reports
The credit report is a vital part of the mortgage qualification process. Accurately accounting for credit is one of the most critical components of properly qualifying a borrower. It is your responsibility to view a customer’s credit report and determine his/her eligibility and willingness to repay the debt. Credit reports and supporting documents cannot be more than 60 days old at the time of closing.
Credit Score
Your credit score is a number that represents your creditworthiness to lenders who are determining whether to grant you a loan. FICO scores are the most widely accepted credit scores.
Credit Union
Service driven; Customers are called Members
Regulated by the National Credit Union Administration
Lending for its own portfolio
Involved sparingly in the Secondary Market
Debt Ratio
The debt ratio shows your long-term and short-term debt as a percentage of your total assets. The lower your debt-ratio, the better your chances are of qualifying for a mortgage.
Decoupled ARM
Decoupled ARM products are interest only ARMs with fixed periods that do not match the interest only period. Most interest only products (3/1, 5/1, 7/1) have a 10-year interest only repayment period.
Deed
a legal document that contains information about who owns a particular property. It contains both the previous owner’s name and the current owner’s name.
Derogatory Credit
Derogatory credit can be defined as anything on the customer’s credit that has a negative impact on the customer’s qualification for financing. Derogatory credit may require satisfaction and/or written letter of explanation from the borrower depending on the severity of the situation.
Discloser
During the mortgage transaction process, you will be given disclosure documents that provide different details about the home loan agreement.
Discount Points
Discount points are considered a form of prepaid interest on your home loan. These “points” are a percentage of your loan paid up front that consequently lowers the mortgage’s interest rate.
DLA
Date of last activity
Down Payment
The down payment on your house is the amount you pay the lender upfront in order to secure the loan. The amount differs based on what you can afford, and the loan requirements that vary according to the lender.
Down Payment Grant
A major hurdle people face when trying to buy a home is saving up for the down payment. To help overcome this issue, there are down payment assistance programs that provide homebuyers with grants that go toward the up front and closing costs.
DTI
Debt to income This relation is expressed in percentage form and is also referred to as the customer’s debt-to-income (DTI) ratios. In most cases, there are two ratios that need to be considered: the primary housing ratio (front ratio) and the total obligation ratio (back ratio).
DU
Desktop Underwriter
Earnest Money
You pay the earnest money deposit once your offer for purchase has been accepted by the seller, to prove that you are invested in buying the home.
Elements of title insurance
Title commitments are ordered by the lender “without exceptions” to coverage. Most investors will not purchase mortgages “with exceptions” and certain endorsements are required.
Eligibility
To become eligible for an new FHA mortgage or an FHA refinance, there are certain criteria you’ll need to meet as a borrower. When it comes to a borrower’s eligibility, the FHA loan program offers a lot of flexibility.
Entitlement
The amount available to the Veteran for use on a
VA loan
Equal Credit Opportunity Act (ECOA) also known as Reg B – “Be Equal”
was developed to protect borrowers against discrimination. Discrimination is defined by ECOA as an act against a person’s age, sex, race, religion, national origin, marital status, and/or income from public assistance programs. In addition to the discrimination category, the Act also states that borrowers are entitled to a copy of their original appraisal.
The Equal Credit Opportunity Notice must indicate if the applicant is approved or denied within 30 days of receiving a complete application.
Equity
Home equity is the amount of ownership you have in your home. The equity on your home increases as you make payments, because you own more of it.
Equity Lines
Equity lines often referred to as a HELOC has the following characteristics: Variable rate Draw period Repayment period Works like a credit card (open ended)
Escrow
Property taxes and the homeowner’s insurance policy of the subject property are collected monthly within the mortgage payment. Money is paid directly to the escrow account where it is held until the taxes and insurance bills are due.
Escrow
Your escrow account is set up by your lender in order to collect funds that go toward paying property taxes and home insurance.
Escrow Analysis
is a statement that explains:
a) Escrow account balance
b) Dates and Amounts of escrow disbursements
c) Was there a shortage, deficiency balance, or overage?
d) Payment adjustment
Escrow Cushion
An escrow cushion is used to offset any shortages an escrow account may incur because of increases in property taxes and/or homeowner’s insurance.
Examples of derogatory credit
30, 60, 90+ Days Late, Past Due, Charge off, Collection, Judgment, Lien, Bankruptcy, foreclosure, short sale and Deed in Lieu of foreclosure
face value
the value printed or depicted on a coin, banknote, postage stamp, ticket, etc., especially when less than the actual or essential value.
Fair and Accurate Credit Transactions Act (FACTA)
primarily to protect consumers from identity theft. The Act stipulates requirements for information privacy, accuracy and disposal, and limits how consumer information may be shared.
Fair Credit Reporting Act (FCRA)
to promote the accuracy, fairness, and privacy of consumer information contained in the files of consumer reporting agencies. It is intended to protect consumers from the willful and/or negligent inclusion of inaccurate information on their credit reports.
Fair Housing Laws
Laws are designed to protect the consumer from unfair or discriminatory practices such as:
Steering: Directing a borrower to an employee for reasons based on discrimination.
Redlining: Intentionally deciding not to lend to an applicant whose property is in an area of town. Each property is evaluated by an appraisal, not based on a neighborhood’s reputation.
Employee Opinions: You must be careful not to express an opinion based on an applicant’s credit worthiness or financial situation
Fannie Mae FNMA
The Federal National Mortgage Association alson known as Fannie Mae is a government agency that buys mortgages from lenders in order for them to reinvest their assets. Its mission is to stimulate the secondary mortgage market in the U.S. and increase availability of low cost housing. largest private investor for conventional mortgages
Fannie Mae Types of Assessment of risks
Approve/Eligible, Approve/Ineligible, Refer/Eligible, Refer/Ineligible
The first part of the loan decision is referring to the credit profile and whether the borrower meets basic investor guidelines
The second part of the loan decision refers to whether the loan is deliverable to FNMA – often a recommendation is given for the decision to be changed to Eligible
Fee Simple
The most common form of ownership of real estate. Represents absolute ownership only limited by government powers, encumbrances, or conditions in the title deed.
FHA
The Federal Housing Administration, or the FHA, is a government-run agency that provides insurance on FHA-approved mortgage loans, in order to increase affordable housing in the U.S. which protects lenders from significant losses. . FHA loans allow the borrower to borrow up to 96.5% of the value of the home. In some cases, the 3.5% down payment requirement can come from a gift or grant, which makes FHA loans popular with first-time homebuyers.
FHA does not lend money to the mortgagor; it only insures home mortgage loans made by private lenders such as mortgage bankers, savings & loans, and banks. The insurance covers the lender’s financial exposure in the case of foreclosure. All FHA loans begin with the issuing of a Case Number assigned through HUD, and all FHA loans must follow HUD’s appraisal requirements for property condition, health, and safety standards.
FHA Down Payment Requirements
FHA requires min 3.5% of the sales price for the down payment
Purchase – 96.5%
Rate and Term refinance – 97.75%
Cash Out refinance – 80%
Non-Arm’s length transaction – 80% (there are some exceptions)
FHA Down Payment Requirements and where can they come from
the down payment requirement for FHA is less than a conventional 95% loan and allows more sourcing options.
FHA requires min 3.5% of the sales price for the down payment.
Borrowers do not have to put any of their own money into the deal.
Down payment can come from:
Borrower’s own funds
100% gift from a close family member or relative
Secured borrowed funds
FHA funding fee
FHA funding fees include the insurance premiums required to secure the loan. The amount you pay towards this insurance depends on the size of the loan, its term, and the down payment you made.
FHA Limits
The FHA has established limits on amount it can insure on government-backed loans. These limits vary based on factors such as location, type of property, and parameters for conventional loans.
FHA Min Standards
HUD requires that any home being financed with an FHA mortgage meets the FHA’s Minimum Standards. In order for a loan to be granted, the property must be deemed safe, secure, and sound.
FHA Refinance
You have the option to refinance your home through the same or a different lender, in order to replace your current mortgage with a new one that offers lower interest rates, or to borrow cash against your home’s equity.
FHFA
The Federal Housing Finance Agency is an independent federal agency in the United States created as the successor regulatory agency of the Federal Housing Finance Board, the Office of Federal Housing Enterprise Oversight, and the U.S. Department of Housing and Urban Development government-sponsored enterprise mission team, absorbing the powers and regulatory authority of both entities, with expanded legal and regulatory authority, including the ability to place government sponsored enterprises into receivership or conservatorship.
FICO score
Your FICO score is a number that represents your creditworthiness. One of the most widely accepted credit scores, this number comes from an algorithm developed by Fair, Isaac and Company in the 1950. FICO debuted as a general-purpose score in 1989.
First Time Homebuyer
The U.S. Department of Housing and Urban Development (HUD) sets specific criteria to classify first time homebuyers. This helps lenders properly identify these consumers and consequently allows HUD to track that number annually.
Fixed rate
A fixed rate mortgage has an interest rate that remains the same for the entire term of the loan. If your interest rate is fixed, your monthly payments do not rise or fall.
Fixed Rate Mortgage
A mortgage in which the interest rate remains fixed for the life of the loan. Even though it means the principle and interest will not change over the life of the loan, the total payment amount can change due to property tax and homeowner’s insurance premiums. This is the preferred type of loan for customers due to the stability and predictability of the rate being fixed.
Floating
mortgage rate is one that is subject to daily market fluctuations. If the interest rate rises by the time you close on your mortgage, you’ll lose some buying power. If the rate falls, you’ll earn some buying power.
Flood Disaster Protection Act
When floods strike, victims often lose virtually all their possessions. Most homeowner insurance policies do not cover damages caused by flooding; therefore, borrowers who are found to be in a flood zone must carry flood insurance. The Flood Disaster Protection Act requires mortgage lenders notify borrowers in high-risk flood areas. If a community participates in the National Flood Insurance Program and the necessary improvements are in a flood zone, the lender must require the applicant to purchase the insurance for the life of the loan.
Foreclosure
A foreclosure is when a borrowers gives up all rights to his/her home as a result of not making monthly mortgage payments. The foreclosed property is then seized and sold by the lender to recover the loss.
Forms of Ownership
Joint Tenancy, Tenancy by Entirety, Tenancy in Common, Community Property and sole ownership
Special Forms of Ownership is Tenancy in Partnership, Co-operative, Condominium, Planned Unit Development, Title Holding Trust
Fraud for Housing
This type of fraud can occur when a borrower or potential homebuyer is motivated to acquire or maintain ownership of a house. The borrower may misrepresent income and asset information on a loan application or entice an appraiser to manipulate a property’s appraised value. These fraud for housing crimes can be further broken down into different types of mortgage fraud.
Fraud for Property
This type of mortgage fraud, prioritized by the FBI, is usually committed by industry insiders who use their specialized knowledge or authority to commit or facilitate the fraud. Many times, mortgage fraud for profit involves collusion by industry insiders, such as bank officers, appraisers, mortgage brokers, attorneys, loan originators, and other professionals. Fraud for profit focuses on misusing the mortgage lending process to get cash and equity from lenders or homeowners.
Freddie Mac FHLMC
The Federal Home Loan Mortgage Corporation also known as Freddie Mac is a government agency that buys mortgages from lenders in order for them to grant more loans to home buyers. The agency works to stimulate the real estate market and increase availability of low cost housing. further authority to purchase loans from mortgage bankers, commercial banks, and HUD approved mortgages. Also considered a GSE.
Freddie Mack Types of Assessment of risk
Accept or Caution
LPA uses Accept or Caution for the overall risk assessment but provides additional detailed analysis within the Findings
LPA also uses color-coding throughout the Loan Evaluation Summary for visual display of risk assessment
Full Closing
The Title Company is responsible for doing everything for this type of closing. This includes:
Preparing the final Closing Disclosure
Conducting the signing
Disbursing the funds
Fully Indexed Rate
At each adjustment, the lender determines the fully indexed rate for the specific ARM product.
Index + Margin = Fully Indexed Rate
The Customer’s rate will then adjust based on the ARM’s preset CAPS.
Functions of the Secondary Mortgage Market
Allows lenders to generate money to create mortgage loans
Sale of loans on the Secondary Market allows lenders to transfer portions of risk to the investor
Sale of loans help lenders manage the risk associated with negative cash flow
Sale of loans on the Secondary Market can create additional fee income
Typically, there are two types of risk:
o Risk of loss due to borrower default
o Risk of loss due to interest rate changes
Funding
The process of preparing and disbursing loan proceeds.
General Warranty
Warranty against any claims (more common for residential property sales and transfers)
GFE
Good Faith Estimate
Ginne Mae GNMA
The Government National Mortgage Association split into two distinct corporations. To broaden their access to capital, mortgage bankers worked with GNMA to develop an entirely new concept for selling VA and FHA Mortgages
Good Faith Estimate
The Good Faith Estimate is a document that offers potential homebuyers basic information about their home loan, with an estimate of the costs that go into acquiring one.
Government Loan
A government-backed loan is a loan subsidized by the government, also known as a Federal Direct Loan, which protects lenders against defaults on payments, thus making it a lot easier for lenders to offer potential borrowers lower interest rates. … VA loan
Grant Deed
Transfers ownership and implies certain things, such as: the title has not already been transferred to another person, except as implicated in the deed.
Hazard Insurance
Home insurance, also commonly called homeowner’s insurance, is a type of property insurance that covers a private residence. It is an insurance policy that combines various personal insurance protections, which can include losses occurring to one’s home, its contents, loss of use, or loss of other personal possessions of the homeowner, as well as liability insurance for accidents that may happen at the home or at the hands of the homeowner within the policy territory.
premiums may also be required to be prepaid by the borrower if the insurance policy is set to renew just after closing the refinance loan. On a purchase, the premium must be paid prior to or at closing by the borrower. If paid prior to closing, the borrower will need a receipt to show that this item has been paid.
Hazard Insurance Policy
Valid hazard insurance policy that covers loss or damage from fire, weather, and other hazards
HELOC
Home equity line of credit
HERA
The Housing and Economic Recovery Act of 2008 strengthened governmental oversight of FNMA and FHLMC
HOA and HOI
Homeowners association homeowners insurance
Home Equity Combined Loan to Value (HCLTV)
It stands for High Combined Loan to Value it is similar to the CLTV because it takes into consideration the total loans on the property. The difference between the two is this ratio considers the full available line amount.
Home Equity loan
As a homeowner, you have the option to tap into your home’s equity and borrow money using it as collateral. This is called a home equity loan, but is also known as a second mortgage since it is in addition to the actual home loan.
Home inspection
As a borrower, you may need to get a home inspection done, where a professional evaluates the condition of the house based on a visual assessment. The report will give you details on any problems with condition of the home.
Home Mortgage Disclosures Act (HMDA) also known as Reg C – “Chumda”
HMDA’s purpose is to provide the public with information that shows if depository institutions are serving the housing credit needs of the communities in which they are located.
HMDA requires the lender to gather and compile information both on the applications for mortgage as well as for the loans purchased. The lender must then report this information in a LAR “Loan Application Register.” The Department of Housing and Urban Development (HUD) serves as the federal supervising agency. HUD is required to issue a report concerning the lender’s lending activity during the previous calendar year. The lender must make this report available to the general public for review and inspection.
Homeowner’s Protection Act (HPA)
HPA = PMI A law passed in the United States Congress and signed by President Bill Clinton in 1998. It is designed to protect homeowners who have mortgages on their homes that include private mortgage insurance or PMI.
HUD
U.S. Department of Housing and Urban Development is a government organization that works to increase affordable housing by implementing programs and policies that stimulate the real estate market.
HUD-1 Settlement Statement
The HUD-1 Settlement Statement was a document that outlined home loan terms. It was replaced by the Closing Disclosure form as of October, 2015, under the administration of the Consumer Financial Protection Bureau.
