NAMP CMLP flashcards

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

SAFE Act

Federal law requiring mortgage loan originators to be licensed or registered through NMLS, complete education, pass a test, submit fingerprints, and complete annual continuing education.

RESPA Section 8

Prohibits giving or receiving any fee, kickback, or thing of value for referrals of settlement service business; bona fide compensation for services actually performed is allowed.

Dual compensation

Loan originator receiving compensation from both the borrower and the lender for the same transaction; prohibited under Regulation Z loan originator compensation rules.

NMLS unique identifier

Permanent number assigned to a mortgage loan originator by the Nationwide Multistate Licensing System; must appear on advertising and business cards.

UDAAP

Dodd-Frank prohibition on unfair, deceptive, or abusive acts or practices; enforced by the CFPB and applies to mortgage origination and servicing.

Steering

Directing a borrower to a loan with less favorable terms when a more suitable loan is available; a prohibited practice under fair lending and UDAAP.

ECOA protected classes

Race, color, religion, national origin, sex, marital status, age, and receipt of public assistance; the Fair Housing Act adds familial status and disability.

TRID Loan Estimate

Must be delivered or mailed within three business days after application; a revised LE is required if the APR changes by more than 0.125 percent.

Closing Disclosure timing

Borrower must receive the Closing Disclosure at least three business days before consummation; the period cannot be waived and may restart with revised terms.

Zero tolerance fees

Fees paid to the creditor or its affiliate and services required by the creditor where the borrower cannot shop; these fees cannot increase at closing.

Right of rescission

Three-business-day period allowing borrowers to cancel a refinance or HELOC secured by their principal dwelling; does not apply to purchase loans.

Adverse action notice

ECOA requires a creditor to notify the applicant within 30 days of a complete application, stating the action taken and reasons or right to request them.

HPML

Higher-priced mortgage loan: first-lien APR exceeds the average prime offer rate by 1.5 percentage points (3.5 for subordinate liens); triggers escrow and appraisal rules.

Flood insurance requirement

Mandatory flood insurance for improved property in a Special Flood Hazard Area; minimum coverage is the lesser of outstanding principal, insurable value, or NFIP maximum.

2025 conforming loan limit

Baseline limit for a one-unit property is $806,500; the high-cost area ceiling is $1,209,750; loans above the applicable limit are jumbo.

FHA UFMIP

Upfront mortgage insurance premium equal to 1.75 percent of the base loan amount; it may be financed into the loan or paid at closing.

VA funding fee

Fee paid by eligible veterans: 2.15 percent for first use with zero down and 3.3 percent for subsequent use; may be financed and is waived for certain disabled veterans.

USDA guarantee fee

Rural Development program charges a 1.0 percent upfront guarantee fee and 0.35 percent annual fee; eligible households can finance 100 percent of the purchase price.

ARM caps

Limits on interest rate adjustments; common structure is 2 percent initial cap, 2 percent periodic cap, and 6 percent lifetime cap over the loan term.

Discount points

Prepaid interest paid to the lender at closing to reduce the note rate; one point equals 1 percent of the loan amount.

DTI ratio

Total monthly debt payments, including proposed housing payment, divided by gross monthly income; used to evaluate repayment ability under ATR/QM rules.

Middle credit score

The middle of the three credit scores reported by the repositories for the primary borrower; used for pricing and underwriting decisions.

Self-employed income

Generally two years of federal tax returns averaged, plus a year-to-date profit and loss statement; declining income may require using the lower year.

Bankruptcy waiting period

Chapter 7: two years from discharge; Chapter 13: four years from discharge or two years from dismissal; foreclosure generally seven years.

Reserves

Liquid assets remaining after closing, measured in months of principal, interest, taxes, and insurance; requirements increase with multiple financed properties.

AUS findings

Automated underwriting systems Desktop Underwriter and Loan Prospector return Approve/Eligible or Accept recommendations; manual underwriting requires documented compensating factors.

Closing Disclosure

Final disclosure reflecting loan terms, projected payments, closing costs, and cash to close; borrower must receive it at least three business days before consummation.

Promissory note

Written promise to repay the loan; specifies principal amount, interest rate, payment schedule, late charges, and prepayment terms.

Deed of trust

Security instrument used in some states that conveys title to a trustee; allows foreclosure by trustee sale if the borrower defaults.

Lender's title insurance

Policy protecting the lender's interest in the property against title defects; required by the lender; an owner's policy is optional.

Wire fraud prevention

Verify wiring instructions by calling a known, independently confirmed phone number; never rely on email instructions and use dual verification.

Proration

Allocation between buyer and seller of prepaid or accrued items such as property taxes, interest, and rents as of the closing date.