Indiana MLO key terms

A federal law that requires lenders to give borrowers specific disclosures about settlement costs and prohibits paying or receiving fees for referrals of settlement-service business.

A federal consumer-protection law that requires creditors to disclose credit costs clearly, including the annual percentage rate and finance charge, and gives borrowers certain cancellation rights.

A federal rule that combines RESPA and TILA mortgage disclosures into two forms: the Loan Estimate, delivered after application, and the Closing Disclosure, delivered before consummation.

A federal law that prohibits creditors from discriminating against applicants based on race, color, religion, national origin, sex, marital status, age, or receipt of public assistance income.

A federal law that requires certain mortgage lenders to collect, report, and publicly disclose data about loan applications, approvals, denials, and borrower characteristics such as race and income.

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

A federal law that sets minimum standards for mortgage loan originator licensing and registration, including prelicensure education, testing, background checks, and use of the NMLS.

A RESPA provision that prohibits giving or receiving anything of value for referrals of settlement services, and prohibits splitting fees unless actual services were performed.

A federal law that imposes extra disclosure, fee, and lending-practice restrictions on certain high-cost mortgages, often called Section 32 loans.

A federal rule requiring creditors to make a reasonable good-faith determination that a borrower can repay a mortgage, and defining Qualified Mortgages that meet certain repayment and pricing criteria.

A federal rule limiting how mortgage loan originators and their employers may be paid, prohibiting compensation based on loan terms and requiring payment on a consistent basis.

A federal law requiring lenders to determine whether a property is in a Special Flood Hazard Area and to require flood insurance before making certain loans secured by that property.

A federal law that requires lenders to provide information about private mortgage insurance and to cancel or terminate PMI automatically when certain loan-to-value and payment conditions are met.

A multistate online system that mortgage loan originators use to apply for, maintain, and renew licenses and to submit required background and education information.

The yearly cost of credit expressed as a percentage, including interest and certain fees, designed to help borrowers compare the total cost of loan offers.

A three-page TRID form that a lender must deliver within three business days after receiving a mortgage application, showing estimated loan terms, closing costs, and other key details.

A TRID form that a lender must deliver at least three business days before consummation, showing final loan terms, closing costs, and the cash the borrower needs to close.

An account that holds borrower funds to pay property taxes, homeowners insurance, and other recurring bills when they come due; lenders often require escrow for certain loans.

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

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

A borrower's total monthly debt payments, including the proposed mortgage, divided by gross monthly income; lenders use it to evaluate repayment ability.

The four main components of a monthly mortgage payment: principal, interest, property taxes, and homeowners insurance; sometimes it also includes mortgage insurance or association dues.

A mortgage insured by the Federal Housing Administration, often allowing lower down payments and more flexible credit standards than conventional loans, with mortgage insurance premiums required.

A mortgage guaranteed by the U.S. Department of Veterans Affairs for eligible veterans, service members, and surviving spouses; it often requires no down payment.

A mortgage not insured or guaranteed by a government agency such as FHA, VA, or USDA; it may be conforming or nonconforming and can require private mortgage insurance.

A mortgage that meets Fannie Mae and Freddie Mac loan limits and underwriting guidelines, allowing it to be sold to those government-sponsored enterprises in the secondary market.

Insurance that protects a lender if a borrower defaults on a conventional loan with a down payment below twenty percent; the borrower usually pays the premium.

A written promise by a borrower to repay a mortgage loan according to stated terms, including the principal amount, interest rate, payment schedule, and maturity date.

A security instrument used in some states that conveys title to a trustee to secure a loan; if the borrower defaults, the trustee can foreclose under the deed's terms.

An independent written opinion of a property's market value prepared by a licensed or certified appraiser, typically required before a mortgage is approved.

Insurance that protects a lender or owner against losses from defects in a property's title, such as liens, claims, or errors in public records.

An agreement in which a lender guarantees a borrower a specific interest rate for a set period, often in exchange for a fee or a slightly higher rate.

Fees a borrower pays at closing to reduce the mortgage interest rate; one point generally equals one percent of the loan amount.

A fee a lender may charge if a borrower pays off all or part of a mortgage early; some loan types and states restrict or prohibit these charges.

The Indiana Department of Financial Institutions is the state agency that licenses and supervises mortgage loan originators and mortgage lenders operating in Indiana.

An Indiana law that regulates high-cost home loans and prohibits predatory lending practices, with requirements for disclosures, fees, and borrower protections.

Authorization issued by Indiana through the NMLS that allows a mortgage loan originator to conduct business in the state under a licensed mortgage lender's sponsorship.

A legal standard that prohibits unfair, deceptive, or abusive acts or practices in consumer financial products or services, enforced by federal and state regulators.

A deliberate misrepresentation or omission of material information by a borrower, broker, appraiser, or other party to obtain a mortgage loan improperly or at better terms.

Lending practices that impose unfair or abusive terms on borrowers, such as excessive fees, high costs without corresponding benefit, or loans made without regard to repayment ability.