UNIT 14 CLOSING THE REAL ESTATE TRANSACTION 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.
AFFILIATED BUSINESS ARRANGEMENT (ABA)
Practice of one company offering a package of services to consumers.
CLOSING
An event where promises made in a sales contract are fulfilled and mortgage loan funs (if any) are distributed to the buyer.
CLOSING DISCLOSURE
The closing disclosure is given to the borrower and the seller itemizes all charges to be paid in connection with closing.
CLOSING STATEMENT
A detailed cash accounting of a real estate transaction, showing all cash received, credits paid, and cash paid out.
CREDIT
On a closing statement, an amount entered in a person’s favor (receive)
DEBIT
On a closing statement, an amount charged; (give)
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 seller.
IMPOUND ACCOUNT
An account that the mortgage lender may require a borrower to have to accumulate funds to pay future real estate taxes and insurance premiums.
MORTGAGE DISCLOSURE IMPROVEMENT ACT (MDIA)
Enacted in 2008 as an amendment to the TILA to require mortgage loan cost disclosures to consumers. Early disclosure must be provided within three business days of receiving a consumer’s application for a mortgage loan; a creditor must wait seven business days after providing the early disclosure before closing the loan. Creditor must wait 3 additional business days if a change occurs that makes the annual percentage rate inaccurate.
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 transfer.
PREPAID ITEMS
On a closing statement, items that have been paid in advance by the 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.
REAL ESTATE SETTLEMENT PROCEDURES ACT (RESPA)
The federal law that requires certain disclosures to consumers about mortgage loan settlements. The law also prohibits the payment or receipt of kickbacks and certain kinds of referral fees.
SURVEY
The process by which boundaries are measured and land areas are determined; the on site measurement of lot lines, dimensions, and position of a house on a lot, including any existing encroachments or easements.
