ID MLO flashcards

33 cards. Read the term and the definition here. The deck at the top of this page is optional.

Application six pieces

Regulation Z defines an application as the submission of six items: consumer name, income, social security number, property address, estimated property value, and loan amount. All six start the disclosure clock.

Loan Estimate timing

The creditor must deliver or mail the Loan Estimate no later than three business days after receiving an application. No fees except a bona fide credit report fee may be collected before delivery.

Closing Disclosure timing

The consumer must receive the Closing Disclosure at least three business days before consummation. Delivery in person counts on receipt; mailing adds three business days under the mailbox rule.

Zero percent tolerance

Certain charges may not increase from the Loan Estimate: lender-origination fees, fees for services the creditor selects, transfer taxes, and recording fees paid to the creditor or affiliate.

Ten percent tolerance

Recording fees paid to a third party and fees for third-party services where the consumer may not shop are subject to a cumulative ten percent tolerance based on the sum of those charges.

Changed circumstance

An event beyond the creditor's control, new information about the borrower, or a borrower-requested change that permits revised disclosures and reset of tolerances when documented and delivered timely.

Right of rescission

TILA gives the consumer three business days to cancel a refinance or home equity loan secured by a principal dwelling. Purchase-money loans and second homes are exempt.

Ability to repay factors

Regulation Z requires verification of eight underwriting factors: income, employment, assets, monthly payment, loan term, simultaneous loans, mortgage-related obligations, and debt-to-income ratio.

Qualified mortgage safe harbor

A QM that is not a higher-priced mortgage loan receives a conclusive presumption of compliance with the ability-to-repay rule, provided it meets product feature and points-and-fees limits.

Higher-priced mortgage loan

An HPML is a closed-end loan secured by a principal dwelling with an APR exceeding the average prime offer rate by 1.5 points for first liens or 3.5 points for subordinate liens.

HOEPA high-cost trigger

A high-cost mortgage exceeds points-and-fees thresholds, a statutory APR margin over the average prime offer rate, or prepayment penalty limits, triggering enhanced disclosures and prohibitions.

RESPA Section 8

Section 8 prohibits giving or accepting anything of value in exchange for referrals of settlement service business. Bona fide compensation for services actually performed at reasonable value is a safe harbor.

Adverse action notice

Regulation B requires notice of adverse action generally within thirty days of a completed application, stating the action, the creditor, ECOA, and specific reasons or a disclosure of the right to request them.

HMDA reporting triggers

Regulation C requires covered lenders to collect and report application data, including ethnicity, race, sex, loan purpose, amount, action taken, and rate spread, for covered dwelling-secured loans.

SAFE Act unique identifier

Each registered mortgage loan originator receives a unique identifier through NMLS that must appear on loan documents and be provided to consumers, ensuring traceability across employers and states.

Flood insurance mandatory purchase

For loans secured by improved property in a special flood hazard area, the lender must require flood insurance, provide notice, and escrow premiums for certain loans under the Biggert-Waters Act.

Appraisal delivery rule

The creditor must provide a copy of each appraisal or written valuation promptly upon completion and no later than three business days before consummation, with a right to a free copy.

Loss mitigation dual tracking

Regulation X bars a servicer from referring a loan to foreclosure while a complete loss mitigation application received more than thirty-seven days before sale is under evaluation.

Qualified written request

A written borrower request for information or dispute of servicing errors that triggers servicer acknowledgment within five business days and a substantive response within thirty business days.

Escrow cushion limit

Regulation X permits a servicer to maintain a cushion of no more than one-sixth of total annual escrow disbursements, and requires an annual escrow account statement to the borrower.

Idaho licensing authority

The Idaho Department of Finance administers the Residential Mortgage Practices Act and licenses mortgage brokers, lenders, and loan originators through NMLS, conducting examinations and enforcement.

Idaho MLO sponsorship

Idaho requires mortgage loan originators to be sponsored by a licensed mortgage broker or lender, and to complete pre-licensure education, testing, background checks, and annual continuing education.

Idaho record retention

Idaho licensees must maintain mortgage loan records for at least three years after the loan closes or the application is denied, and make them available to the Director on request.

Idaho deed of trust

Idaho uses deeds of trust for most residential mortgages, with a trustee empowered to conduct nonjudicial foreclosure by advertisement and sale after the statutory notice of default period.

Idaho cure right

Before the trustee's sale, the borrower may cure a default by paying arrears, late charges, and trustee costs; Idaho statute sets the notice periods and reinstatement conditions for the trust deed.

Idaho Consumer Protection Act

Idaho Code Title 48, Chapter 6 prohibits unfair or deceptive acts or practices in trade or commerce, enforced by the Attorney General alongside Department of Finance mortgage authority.

Idaho dual compensation ban

Idaho mortgage brokers may not receive compensation from both the borrower and the lender on the same transaction without disclosure and consent as required by the Residential Mortgage Practices Act.

Fraud for property

Fraud for property is borrower-driven misrepresentation of income, assets, or occupancy to obtain a home the borrower could not otherwise qualify for, often with false documents.

Fraud for profit

Fraud for profit involves industry insiders using straw buyers, inflated appraisals, and flipped properties to extract loan proceeds, typically across multiple transactions in a scheme.

Suspicious Activity Report

A confidential filing by a financial institution to FinCEN reporting suspected fraud, structuring, or money laundering. Institutions may not notify the subject that a report was filed.

Disparate impact

A facially neutral lending policy or practice that has a disproportionately adverse effect on a protected class and is not justified by business necessity may violate fair lending law.

UDAAP standard

Dodd-Frank prohibits unfair, deceptive, or abusive acts or practices. Deception requires a material misrepresentation likely to mislead a reasonable consumer; unfairness requires substantial injury not reasonably avoidable.

GLBA privacy notice

The Gramm-Leach-Bliley Act requires financial institutions to give privacy notices, offer opt-out rights for sharing nonpublic personal information with nonaffiliates, and maintain a written safeguarding program.