MI MLO flashcards
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32 cards. Read the term and the definition here. The deck at the top of this page is optional.
- APR
- The annual percentage rate under Regulation Z; it expresses the cost of credit as a yearly rate and includes the interest rate plus certain finance charges and fees.
- TRID Loan Estimate
- A standardized disclosure that must be delivered or mailed within three business days after a lender receives a complete application, showing loan terms, projected payments, and closing costs.
- Closing Disclosure
- A five-page form the consumer must receive at least three business days before loan consummation; it itemizes final loan terms, projected payments, and closing costs.
- RESPA Section 8
- Prohibits giving or receiving anything of value for the referral of settlement service business; also bars fee splitting and unearned fees in federally related mortgage loans.
- Ability to Repay
- Regulation Z rule requiring lenders to make a reasonable, good-faith determination that a borrower can repay a mortgage; qualified mortgages receive a safe harbor or rebuttable presumption.
- ECOA Regulation B
- Prohibits discrimination in credit based on race, color, religion, national origin, sex, marital status, age, public assistance income, or good-faith exercise of consumer rights.
- Fair Housing Act
- Federal law prohibiting discrimination in the sale, rental, and financing of housing based on race, color, religion, sex, national origin, familial status, or disability.
- HMDA
- The Home Mortgage Disclosure Act requires covered lenders to collect and report data on mortgage applications, originations, denials, and pricing for public review.
- LTV Ratio
- Loan-to-value ratio equals the loan amount divided by the lesser of the sales price or appraised value, expressed as a percentage.
- Combined LTV
- CLTV equals the sum of all liens divided by the property value; it is used to evaluate subordinate financing and mortgage insurance requirements.
- PITI
- Principal, interest, taxes, and insurance; the standard monthly housing expense used in debt-to-income and affordability calculations.
- Debt-to-Income Ratio
- Total monthly debt obligations divided by gross monthly income; it measures a borrower's capacity to repay and is a key underwriting factor.
- Adjustable-Rate Mortgage
- A loan with an initial fixed-rate period followed by periodic rate adjustments based on an index plus margin, subject to periodic and lifetime caps.
- Discount Point
- A fee equal to one percent of the loan amount paid to lower the interest rate; points are generally tax-deductible mortgage interest in the year paid.
- Mortgage Insurance Premium
- FHA MIP consists of an upfront premium and an annual premium; conventional loans above 80% LTV typically require private mortgage insurance instead.
- VA Funding Fee
- A fee charged on VA-guaranteed loans that varies by down payment amount and prior use of the VA benefit; it may be financed into the loan.
- Conforming Loan Limit
- The maximum loan amount eligible for purchase by Fannie Mae or Freddie Mac, set annually by the Federal Housing Finance Agency.
- Pre-Approval
- A conditional commitment based on verified income, assets, and credit; it is stronger than a pre-qualification, which is only an informal estimate.
- Four Cs of Underwriting
- Credit, capacity, capital, and collateral; these factors summarize a borrower's credit history, income, assets, and property value.
- Rate Lock
- An agreement fixing the interest rate for a specified period; a float-down option allows the rate to decrease if market rates fall before closing.
- Appraisal Independence
- Rules barring loan originators from improperly influencing appraisers; borrowers must receive a copy of the appraisal under federal disclosure rules.
- Loan Application Elements
- Six pieces of information that constitute a TRID application: name, income, Social Security number, property address, estimated value, and loan amount.
- Escrow Account
- An impound account holding funds for property taxes and insurance; RESPA limits required reserves and requires annual escrow analysis.
- Mortgage Fraud
- Intentional misrepresentation of income, assets, occupancy, or property value to obtain a loan; originators must verify information and report suspected fraud.
- Fiduciary Duty
- An originator's obligation to act in the borrower's best interest, disclose conflicts, avoid self-dealing, and provide accurate loan information.
- Kickback
- Anything of value given or received for the referral of settlement service business; prohibited by RESPA and by ethical lending standards.
- GLBA Privacy
- The Gramm-Leach-Bliley Act requires protection of nonpublic personal information and limits sharing of borrower data without proper notice or consent.
- Anti-Money Laundering
- Bank Secrecy Act obligations requiring customer identification, recordkeeping, and reporting of suspicious activity by covered financial institutions.
- Steering
- Directing a borrower to a loan product based on the originator's compensation rather than the borrower's interest; prohibited under fair lending and ethics rules.
- Michigan DIFS
- The Michigan Department of Insurance and Financial Services administers the Mortgage Brokers, Lenders, and Servicers Licensing Act and supervises Michigan mortgage licensees.
- Michigan MLO License
- Michigan mortgage loan originators must be licensed through NMLS, meet pre-licensing education and testing requirements, and renew annually.
- Michigan Continuing Education
- Michigan MLOs must complete annual SAFE Act continuing education, including a Michigan-specific law component, and renew their NMLS license on time.