CT MLO key terms

A three-page disclosure a lender must deliver within three business days of a mortgage application, showing the loan terms, projected payments, closing costs, and cash to close in a standardized format.

A five-page form the borrower must receive at least three business days before consummation, stating the final loan terms and actual closing costs so they can be compared with the Loan Estimate.

The integrated disclosure requirements under Regulations Z and X that combine Truth in Lending and RESPA disclosures into the Loan Estimate and Closing Disclosure and impose timing and accuracy tolerances.

The moment the borrower becomes contractually obligated on the credit transaction, generally at signing of the promissory note; it starts the three-business-day review period before funds disburse.

A permitted variance between estimated and final closing costs. Zero-tolerance items cannot increase, ten-percent categories are measured in aggregate, and unlimited-tolerance items may change if disclosed in good faith.

An unexpected event affecting settlement charges, such as a new appraisal finding or borrower-requested change, that permits a revised Loan Estimate and resets the tolerance baseline if disclosed promptly.

A three-business-day right for borrowers to cancel certain refinances and home equity loans secured by their principal dwelling, starting from consummation or delivery of required disclosures, whichever is later.

The rule implementing the Truth in Lending Act, governing disclosure of credit terms and costs, advertising rules, loan originator compensation limits, and ability-to-repay standards.

The rule implementing RESPA, covering settlement service disclosures, escrow account limits, kickback prohibitions, and servicing transfer notices.

The Real Estate Settlement Procedures Act, a federal law requiring disclosure of settlement costs, limiting escrow balances, prohibiting unearned fees, and regulating servicing transfers and escrow payments.

The RESPA rule banning giving or accepting anything of value in exchange for referrals of settlement service business and banning fee splits for services not actually performed.

A relationship in which a settlement service provider refers business to an affiliate with a financial interest; it requires a written disclosure of the arrangement and estimated charges, but does not authorize kickbacks.

The Regulation Z requirement that a creditor make a reasonable, good-faith determination the borrower can repay the loan based on verified income, assets, debts, employment, and other documented factors.

A loan meeting Regulation Z standards, such as points-and-fees limits, no risky features, and verified income, which gives the lender a safe harbor or rebuttable presumption of ATR compliance.

A federal law imposing extra disclosures and restrictions on high-cost mortgages based on points-and-fees or APR thresholds, including limits on prepayment penalties and balloon payments.

A federal law barring discrimination in credit on protected bases such as race, sex, age, marital status, and receipt of public assistance, and requiring adverse action notices and appraisal copies.

The rule implementing ECOA, covering prohibited discrimination, collection of monitoring information, notice of incompleteness, adverse action notices, and appraisal delivery requirements.

A federal law prohibiting discrimination in the sale, rental, and financing of housing based on protected characteristics including race, color, religion, sex, disability, familial status, and national origin.

The Secure and Fair Enforcement for Mortgage Licensing Act, which requires individual loan originators to be registered or licensed through the Nationwide Multistate Licensing System and meet testing and education standards.

The Nationwide Multistate Licensing System, the online registry where mortgage loan originators and companies apply for licenses, renew them, and maintain public records of their status.

The permanent NMLS number assigned to each registered loan originator, which must appear on business cards, advertisements, and loan documents so consumers can check the originator's record.

A written promise by the borrower to repay a specific sum at a stated interest rate, with defined payment terms, late charges, and default remedies; it is the evidence of the debt.

The security instrument that pledges real property as collateral for a loan and gives the lender the right to foreclose if the borrower defaults; Connecticut commonly uses a mortgage deed rather than a deed of trust.

The portion of a monthly payment that reduces the outstanding loan balance (principal) and pays the cost of borrowing (interest), based on the amortization schedule.

The four components of a typical monthly housing payment: principal, interest, property taxes, and homeowners insurance; lenders use it to calculate the housing expense ratio.

The schedule by which a loan balance is repaid through regular payments; early payments are mostly interest, and the principal portion grows over time on a fixed-rate loan.

The percentage a lender charges on the outstanding principal, expressed annually; it may be fixed for the loan term or adjustable at scheduled intervals based on an index and margin.

A standardized measure of the cost of credit expressed as a yearly rate, incorporating interest plus certain finance charges such as points and fees, allowing comparison between loan offers.

A loan whose interest rate changes periodically based on an index plus a margin, subject to initial fixed periods, adjustment caps, and a lifetime ceiling; it carries payment change risk.

Total monthly debt payments divided by gross monthly income, expressed as a percentage; it measures a borrower's capacity to repay and is compared to program limits.

The loan amount divided by the property's appraised value or purchase price, whichever is lower, expressed as a percentage; higher LTV generally requires mortgage insurance.

Insurance protecting the lender against loss when a borrower defaults with a high LTV loan; it is usually required above 80 percent LTV and may be canceled as equity grows.

A lender-held account funded by monthly borrower payments to pay property taxes and insurance when due; RESPA limits the cushion and requires annual statements.

Another name for an escrow account used to collect and hold funds for taxes, insurance, and other recurring property charges on behalf of the borrower.

Prepaid finance charges paid at closing, where one point equals one percent of the loan amount; discount points lower the interest rate while origination points compensate the lender.

An independent, licensed opinion of a property's market value based on inspection, comparable sales, and condition, used by the lender to support the loan amount.

The lender's process of evaluating credit history, income stability, assets, collateral value, and capacity to repay to decide whether a loan meets program and investor guidelines.

The submission of a borrower's financial information for a credit decision; under Regulation Z it triggers disclosure timing, and six pieces of information define a complete application.

The process from taking a borrower's application through processing, underwriting, and closing, including gathering documentation, ordering services, and coordinating settlement.

An individual who takes a residential mortgage application or offers or negotiates loan terms for compensation; licensing and conduct rules apply under the SAFE Act and state law.

A written notice required when credit is denied or terms are changed unfavorably, stating the reasons or how to obtain them and the borrower's ECOA rights.

A written notice sent when an application lacks information needed for a decision, telling the borrower what is missing and the deadline to respond before the file may be closed.

The settlement meeting where loan documents are signed, funds are disbursed, title transfers, and the borrower becomes contractually obligated on the debt.

A policy protecting the lender or owner against losses from defects in title such as liens, judgments, or recording errors discovered after closing.

The obligation to act in the client's best interest, placing the client's interests ahead of the originator's compensation and disclosing conflicts of interest honestly.

Payment for sending business to a settlement service provider; it is illegal under RESPA when no goods or services are actually provided in return.

The illegal practice of denying or limiting credit in certain neighborhoods based on the racial or ethnic composition of the area rather than the borrower's qualifications.

Unfair or deceptive practices such as steering borrowers into unaffordable or high-cost loans, hiding fees, or pressuring refinances that strip home equity without benefit.

Situations where an originator's personal or financial interest could improperly influence advice to a borrower, such as compensation tied to a higher rate.

The state agency that licenses mortgage lenders, brokers, and originators in Connecticut and enforces state mortgage statutes and consumer protection rules.

State requirements for mortgage lender, broker, and originator licenses, including prelicensing education, testing, surety bonds, and annual renewal through NMLS.

State rules governing maximum interest and fees on mortgage loans, with exemptions for first-lien residential mortgages and specific disclosure or penalty consequences for violations.

The state's process for enforcing a mortgage, typically judicial or strict foreclosure through the Superior Court, with required notices, mediation options, and sale procedures.

A state-required form in which a seller reports known defects and conditions of residential property to a buyer before transfer, affecting buyer expectations and inspections.

A loan exceeding federal or state cost thresholds, triggering extra disclosures, restrictions on fees, prepayment penalties, and balloon payments, and limits on late charges.