Vocabulary Flashcards
Acceleration Clause
Forces the borrower to repay the entire loan upon the first instance of borrower default.
Adjustable Rate Mortgage (ARM)
A mortgage in which the interest rate periodically adjusts. Requires special ARM disclosures and the CHARM booklet.
Adjustment Period
The amount of time during which a new interest rate will be in effect for an adjustable rate mortgage.
Affiliated Business Arrangement Disclosure (AfBA)
A document that informs applicants of service providers that may be used in the loan transaction that are affiliated with the lender.
American Association of Residential Mortgage Regulators (AARMR)
National association of individuals who are charged with administering and regulating various aspects of residential mortgage lending. Played a major role in the formation of the NMLS and drafting the model licensing law.
Annual Percentage Rate (APR)
Measurement of the total cost of the credit, expressed as an annual rate. APR includes all items included in the finance charge: interest, discount points, mortgage insurance premiums, and administrative fees.
Bank Secrecy Act (BSA)
A federal law requiring that financial institutions take steps to prevent and report cases of money laundering.
Closing Costs
Also called settlement costs. All of the costs related to closing EXCEPT the prepaid or escrow items.
Conference of State Bank Supervisors (CSBS)
A national organization of state bank supervisors charged with ensuring that state banking institutions adhere to certain standards. Played major role in the formation of the NMLS and drafting the model licensing law.
Conforming Loans
Loans that can be sold to Fanny Mae and Freddy Mac.
Consumer Financial Protection Bureau (CFPB)
A federal regulator created under the authority of the Dodd-Frank Act. Tasked with rulemaking for and enforcement of the majority of U.S. mortgage laws.
Conventional Loan
Any loan that is not insured or guaranteed by the federal government.
Fair Credit Reporting Act (FCRA)
Federal law regulating the users and use of consumer credit information.
Gramm-Leach-Bliley Act (GLBA)
Federal law that includes provisions to protect consumers’ personal financial information held by financial institutions. GLBA compliance include financial privacy rules, safeguard rules, and pretexting rules.
Home Mortgage Disclosure Act (HMDA)
Federal law written as a response to public concerns that lenders were redlining. Requires creditors to track demographic data on applications and lending activity and report that date to the federal government on an annual basis.
