AR MLO key terms

The cost of credit expressed as a yearly rate, including the interest rate plus certain finance charges such as origination fees and points, disclosed to borrowers so they can compare loan offers.

The total dollar amount of interest and other costs a borrower pays to obtain credit, disclosed under federal truth-in-lending rules and used to calculate the APR.

A federal law requiring lenders to disclose credit costs and key loan terms in a standardized way, giving borrowers clear information before they become obligated.

The Federal Reserve rule that implements the Truth in Lending Act, setting disclosure timing, content, and accuracy standards for consumer mortgage credit transactions.

A federal law governing settlement practices, requiring disclosures about closing costs and servicing, and prohibiting kickbacks and unearned fees in federally related mortgage transactions.

The rule implementing RESPA and related consumer protection laws, covering servicing transfers, escrow accounts, loss mitigation, and settlement service disclosures.

A standardized three-page disclosure delivered to a mortgage applicant within three business days of application, summarizing loan terms, projected payments, and estimated closing costs.

A standardized form the borrower must receive at least three business days before consummation, showing final loan terms, actual closing costs, and cash to close.

A borrower's right to cancel certain refinance or home equity loans secured by a principal residence within three business days after consummation without penalty.

A Regulation Z requirement that lenders make a reasonable, good-faith determination that a consumer can repay a mortgage based on verified income, assets, debts, and other factors.

A mortgage meeting specific federal standards for loan features, points and fees, and underwriting, giving the lender a legal safe harbor or presumption of compliance with ability-to-repay rules.

The RESPA rule barring giving or accepting anything of value in exchange for referrals of settlement service business and barring splitting fees for services not actually performed.

A relationship in which a settlement service provider refers business to an affiliated company, permitted only with written disclosure of the relationship and an estimate of charges, and no required use.

A federal law prohibiting lenders from discriminating against credit applicants on protected bases such as race, color, religion, national origin, sex, marital status, age, or receipt of public assistance income.

The rule implementing ECOA, governing collection of applicant information, notification of credit decisions, and prohibitions on discriminatory practices in credit transactions.

A written notice a lender must provide when denying credit or taking other unfavorable action, stating the reasons or informing the applicant of the right to request them.

A federal law requiring covered lenders to collect and report data about mortgage applications and originations to help regulators identify discriminatory lending patterns and meet community credit needs.

The rule implementing HMDA, specifying which loans are reported, what data fields must be collected, and when and how the data is submitted and disclosed.

A federal law requiring flood insurance on loans secured by property in special flood hazard areas and mandating notice to borrowers before closing.

The state agency that licenses and supervises mortgage loan originators, mortgage brokers, and mortgage bankers in Arkansas, conducts examinations, and enforces state mortgage law.

The state statute establishing licensing, conduct, disclosure, and enforcement requirements for mortgage loan originators and mortgage companies doing business in Arkansas.

The state credential required to take residential mortgage loan applications or negotiate terms for compensation in Arkansas, obtained through NMLS application and maintained with continuing education.

The minimum 20 hours of approved coursework, including federal law, ethics, and state-specific content, that a new mortgage loan originator must complete before being licensed.

The annual 8 hours of approved coursework, including at least 3 hours of federal law, 2 hours of ethics, and 2 hours of non-traditional lending, that a licensed originator must complete each year.

A permanent number assigned to each registered mortgage loan originator and licensed entity, which must appear on loan documents and advertising as required.

The national online system used to apply for, maintain, and track mortgage licenses, submit fingerprints and credit reports, and manage education records across states.

The quarterly financial and operational report that licensed mortgage companies file through NMLS, covering loan volumes, revenues, and business activity for regulatory oversight.

The submission of a borrower's financial information in connection with a request for a mortgage, which triggers disclosure timing rules and the origination process.

The process of evaluating a borrower's credit, income stability, assets, and the collateral property to determine whether a loan meets investor and insurer requirements.

Software that evaluates loan application data against investor guidelines and produces a recommendation such as approve, refer, or deny, often determining eligibility for streamlined documentation.

A borrower's total monthly debt obligations divided by gross monthly income, used to measure capacity to repay and to determine eligibility under lender and investor guidelines.

The loan amount divided by the property's appraised value or purchase price, whichever is lower, indicating the lender's exposure and often driving mortgage insurance requirements.

Insurance protecting the lender against loss when a borrower defaults on a loan with a high loan-to-value ratio, usually required when the down payment is below 20 percent.

A lender-held account into which a borrower pays monthly amounts for taxes and insurance, from which the lender later pays those obligations when due.

The charges used in qualified mortgage testing, generally including origination fees, discount points, broker compensation, and certain other costs, subject to statutory thresholds.

The point at which a borrower becomes contractually obligated on a mortgage loan, which governs the timing of the Closing Disclosure and the rescission period.

The principle, enforced through ECOA, the Fair Housing Act, and related laws, that credit decisions and terms must not be influenced by prohibited borrower characteristics.

The illegal practice of refusing or limiting credit in certain geographic areas, often based on the racial or ethnic composition of residents, rather than on individual creditworthiness.

Intentional misrepresentation or omission of material information in a mortgage transaction for unlawful gain, such as inflating income, assets, occupancy, or property value.

Falsely representing that a borrower will occupy a property as a primary residence to obtain better pricing or terms intended for owner-occupied loans.

A person who knowingly or unknowingly allows their identity and credit to be used to obtain a mortgage for someone else's benefit, often to conceal the true borrower or commit fraud.

A confidential report that financial institutions file with federal authorities when they detect transactions that may involve fraud, money laundering, or other illegal activity.

A federal law requiring financial institutions to maintain records, verify customer identity, and report certain transactions and suspicious activity to deter money laundering and fraud.

A federal law requiring financial institutions to safeguard customer nonpublic personal information and to provide privacy notices explaining how information is shared.

The federal agency that issues and enforces rules under TILA, RESPA, ECOA, and HMDA, and supervises mortgage lenders for consumer protection compliance.

Rules requiring lenders to retain loan files, disclosures, and evidence of compliance for specified periods so regulators and investors can verify lawful conduct.

The requirement that mortgage advertising be accurate, not misleading, include required disclosures such as the NMLS identifier, and avoid triggering terms without full APR disclosure.