DC MLO key terms

A federal law requiring lenders to give borrowers disclosures about settlement costs and prohibiting kickbacks or unearned fees for referring real estate settlement business.

A federal law requiring creditors to disclose credit terms in a consistent way, including the annual percentage rate and total finance charge, so borrowers can compare loan offers.

The cost of credit expressed as a yearly rate, including the interest rate plus certain finance charges such as points and fees, used to compare loan offers.

The dollar amount of all costs a borrower pays to obtain credit, including interest, points, and certain fees, disclosed under TILA.

A three-page disclosure a lender must deliver within three business days of a mortgage application, showing estimated interest rate, monthly payment, and closing costs.

A five-page form a lender must deliver at least three business days before consummation, listing the final loan terms and actual closing costs the borrower will pay.

An unearned payment or thing of value given to a person for referring settlement service business, prohibited by RESPA and subject to civil and criminal penalties.

A written disclosure given when a settlement provider refers a borrower to an affiliated company, stating the relationship and that the referral is not required.

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

The implementing regulation for ECOA, setting rules on application processing, record retention, notification of action taken, and collection of monitoring information.

A written notice a creditor must send within 30 days when denying or otherwise taking unfavorable action on an application, stating reasons or how to request them.

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

A federal law requiring covered lenders to collect and report data about mortgage applications and originations to help regulators detect discriminatory lending patterns.

The regulation implementing HMDA that specifies which loans are reportable, what data fields must be collected, and how and when data is reported.

The illegal practice of denying or limiting credit in certain neighborhoods, often based on race or ethnicity, rather than on the creditworthiness of individual applicants.

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

A zone FEMA designates as having at least a one percent annual chance of flooding, where federally related mortgage loans on improved property require flood insurance.

A written promise by a borrower to repay a specified sum with interest according to stated terms, and the document that establishes the debt obligation.

A security instrument that pledges real property as collateral for a loan, giving the lender the right to foreclose if the borrower defaults.

The gradual repayment of a loan through scheduled payments that cover both interest and principal, so the balance declines to zero at maturity.

An account in which a lender holds part of the borrower's monthly payment to pay property taxes and insurance when due; also refers to the neutral third-party settlement process.

Insurance a lender requires on a conventional loan when the down payment is small, protecting the lender against loss if the borrower defaults.

The loan amount divided by the property's appraised value or purchase price, expressed as a percentage, used to measure lending risk.

The total of all mortgage liens on a property divided by the property's value, used when a borrower has a second mortgage or home equity line.

A mortgage not insured or guaranteed by a government program such as FHA, VA, or USDA, and typically subject to the lender's own underwriting guidelines.

A mortgage insured by the Federal Housing Administration that allows lower down payments and more flexible credit standards than many conventional loans.

The insurance charge on FHA loans, paid both upfront at closing and annually through monthly payments, protecting the lender against borrower default.

A mortgage guaranteed by the Department of Veterans Affairs for eligible veterans, service members, and surviving spouses, often requiring no down payment.

A document confirming a borrower meets the service requirements for a VA-guaranteed loan, obtained from the VA or through an approved lender system.

A mortgage or other lien that ranks behind a first lien in priority for repayment if the property is sold or foreclosed.

The order in which liens on a property are paid from sale proceeds, generally determined by recording date unless a statute or agreement provides otherwise.

The legal process by which a lender sells or takes ownership of collateral property after a borrower defaults, to satisfy the unpaid debt.

The process of taking a borrower's application, gathering documentation, ordering verifications and appraisals, and shepherding the loan to approval and closing.

A request for credit submitted on a form such as the Uniform Residential Loan Application, containing the borrower's financial and property information.

The lender's evaluation of a borrower's credit, capacity, and collateral to decide whether to approve a loan and on what terms.

Software that applies lender and investor guidelines to application data and credit information to produce an approval, referral, or denial recommendation.

A borrower's total monthly debt payments divided by gross monthly income, used to judge the ability to repay a new mortgage payment.

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

A loan meeting Regulation Z standards for repayment ability and points-and-fees limits, giving the lender certain legal protections against borrower claims.

An estimate of settlement charges given to a borrower early in the process; under current rules it is replaced by the Loan Estimate for most closed-end loans.

A lender's written commitment to hold a specified interest rate and points for a set period, often for a fee, with terms stated in the loan estimate.

A legal obligation to act in another party's best interest with loyalty and care, which a mortgage professional owes to clients in certain dealings.

Situations where a professional's personal or financial interests could improperly influence decisions made on behalf of a client, requiring disclosure or avoidance.

Laws, rules, and practices designed to safeguard borrowers from unfair, deceptive, or abusive acts and from inaccurate or misleading information.

Prohibited conduct under federal consumer financial law involving practices that cause substantial harm without benefit, mislead consumers, or take unreasonable advantage of them.

The principle and body of law requiring lenders to treat all applicants equally and not discriminate on prohibited bases at any stage of a loan.

An individual who takes residential mortgage applications, offers or negotiates loan terms, or directs a borrower to a lender, and who must be licensed or registered.

A federal law setting minimum licensing and registration standards for mortgage loan originators, including pre-licensing education, testing, and background checks.

The online system used by state regulators to manage license applications, renewals, and records for mortgage loan originators and companies.

The District agency that licenses and supervises mortgage lenders, brokers, and loan originators and enforces District mortgage and consumer finance laws.

The District's requirements for mortgage lenders, brokers, and originators to obtain and maintain licenses, including education, testing, surety bond, and renewal obligations.

District law imposing restrictions and consumer protections on high-cost home loans, including limits on certain fees, prepayment penalties, and lending practices.

Abusive lending practices that impose unfair or excessive costs and terms on borrowers, often through steering, hidden fees, or unsuitable loan products.