NV MLO key terms

A federal law requiring creditors to disclose the true cost of credit, including the finance charge and annual percentage rate, in a consistent format so borrowers can compare offers and make informed decisions.

The rule that implements the Truth in Lending Act, now written and enforced by the Consumer Financial Protection Bureau; it covers disclosure timing and content, advertising, high-cost mortgages, and loan originator compensation.

A standardized three-page disclosure a lender must deliver within three business days after receiving a mortgage application, showing loan terms, projected payments, closing costs, cash to close, and the annual percentage rate.

A standardized five-page statement the borrower must receive at least three business days before consummation, itemizing the final loan terms, closing costs, and the exact cash needed to close.

A federal statute governing settlement practices on federally related mortgage loans; it requires disclosures, limits escrow account practices, and bars giving or accepting fees for referral of business.

A 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, and requires notice when credit is denied.

A written notice a creditor must provide within thirty days after denying an application or taking other unfavorable action, stating the specific reasons and explaining the applicant's rights under federal law.

A federal law requiring mortgage lenders to collect, report, and make public data about applications, originations, and denials, including borrower race, ethnicity, sex, and income, so regulators can detect discriminatory patterns.

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 setting minimum licensing and registration standards for mortgage loan originators, including pre-licensing education, testing, background checks, and enrollment in a national registry with unique identifiers.

A requirement that creditors make a reasonable, good-faith determination that a borrower can repay a loan; loans meeting defined Qualified Mortgage criteria receive special legal protections and presumption of compliance.

A Truth in Lending amendment covering high-cost home loans; when points, fees, or the annual percentage rate exceed set thresholds, extra disclosures, escrow requirements, and lending restrictions apply.

A borrower's right to cancel certain refinance and home equity loans secured by a principal dwelling within three business days after consummation, with the lender required to refund fees paid.

The written contract in which a borrower promises to repay a stated sum with interest on a set schedule; it defines the rate, payment amount, maturity, and any late charge or prepayment terms.

A security instrument used instead of a mortgage in many states that conveys title to a neutral trustee, who may sell the property through non-judicial foreclosure if the borrower defaults.

The order in which creditors' claims against a property are paid; a first-lien position is generally satisfied before junior liens in foreclosure, which makes it lower risk for the lender.

The gradual repayment of a loan through scheduled payments that cover both accrued interest and principal, so the balance declines and the borrower's equity grows over the term.

The four pieces of a standard monthly housing payment: principal, interest, property taxes, and homeowner's insurance; underwriters often use this full amount when testing affordability.

A lender-held account funded from monthly payments that collects property tax and insurance costs and pays them when due, protecting the lender's collateral and smoothing the borrower's budget.

The loan amount divided by the property's appraised value or purchase price, whichever is lower; it reflects borrower equity and influences mortgage insurance, pricing, and eligibility.

The percentage of a borrower's gross monthly income that goes toward all monthly debt obligations, including the proposed housing payment; lenders use it to judge capacity to repay.

A single yearly figure expressing the cost of credit, combining the interest rate with certain finance charges and fees so borrowers can compare competing loan offers on a common basis.

An upfront charge paid to the lender to lower the interest rate; one point equals one percent of the loan amount and typically buys a permanent reduction in the note rate.

Coverage that protects the lender if a borrower defaults on a conventional loan with a high loan-to-value ratio; it is commonly required when the down payment is below twenty percent.

A loan whose interest rate changes on a set schedule according to an index plus a margin; initial fixed periods and periodic and lifetime caps limit how much the rate and payment can rise.

The standard application form on which a borrower discloses income, assets, debts, employment, and property details; submitting it starts the formal origination and underwriting process.

An informal, often unverified estimate of how much a buyer might borrow, based on self-reported information; it is not a commitment to lend or an approval of credit.

A lender's written commitment to hold a specific interest rate and points for a defined period, usually ending on a stated expiration date; longer lock periods generally cost more.

Software such as Fannie Mae's Desktop Underwriter or Freddie Mac's Loan Product Advisor that compares application data to investor guidelines and returns an approval or referral recommendation.

A borrower's affirmative statement, given after the Loan Estimate is delivered, authorizing the lender to continue processing the application and to collect fees beyond the credit report charge.

A valid event, such as a revised appraisal value or a borrower-requested change, that allows a lender to issue a revised Loan Estimate and resets the good-faith comparison of disclosed costs.

The underwriting status confirming that every prior condition has been satisfied and all documents are ready for the closing table and subsequent disbursement of funds.

The ethical and legal obligation to act in the client's best interest, placing the client's needs ahead of the originator's own compensation, convenience, or the preferences of a business partner.

Intentional misrepresentation or omission of material facts, such as inflated income, hidden debts, or false occupancy claims, in order to obtain financing the borrower would not otherwise qualify for.

Directing a borrower toward a loan product or terms that benefit the originator, such as higher compensation, rather than toward the option that best fits the borrower's stated needs.

The illegal practice of refusing, limiting, or pricing credit differently in specific neighborhoods based on the racial or ethnic composition of those areas rather than on borrower creditworthiness.

The permanent number assigned to a mortgage loan originator in the national registry; it must appear on loan documents and advertising and is used to track the originator's licensing history.

The relationship in which a licensed mortgage company employs or contracts with a loan originator and reports that relationship to the state regulator through the national licensing system.

The annual eight hours of approved instruction, including federal law, ethics, and non-traditional mortgage topics, that a licensed mortgage loan originator must complete to renew a license.

A bond that mortgage licensees in many states must maintain; it can pay a claim to the state or to harmed consumers when the licensee violates licensing laws or commits certain misconduct.