NY MLO flashcards
NY MLO · Build recall with a focused review session.
32 cards. Read the term and the definition here. The deck at the top of this page is optional.
- RESPA Section 8
- Prohibits giving or receiving anything of value in exchange for referrals of settlement service business. Violations include kickbacks and fee splits not for services rendered.
- TRID Loan Estimate
- Must be delivered within 3 business days of loan application. Revised LE must be received by borrower no later than 4 business days before consummation.
- TRID Closing Disclosure
- Must be received by borrower at least 3 business days before loan consummation. Changes to certain terms may require a revised CD and new waiting period.
- Zero tolerance fees
- Fees that cannot increase from Loan Estimate to Closing Disclosure, such as lender fees, transfer taxes, and services shopped from an affiliate.
- 10% cumulative tolerance
- Fees that may increase up to 10% in aggregate from Loan Estimate to Closing Disclosure, including recording fees and services shopped from non-affiliate when borrower uses provider.
- Ability-to-Repay rule
- Requires lenders to make a reasonable, good-faith determination that borrower can repay loan. Qualified Mortgages provide safe harbor or rebuttable presumption.
- HMDA reporting
- Requires covered lenders to collect and report data on mortgage applications, originations, denials, and pricing, including borrower race, ethnicity, sex, and age.
- ECOA adverse action notice
- Lender must notify borrower of denial or adverse change within 30 days of completed application, stating reasons for action.
- SAFE Act education
- Requires 20 hours of pre-licensure education including 3 hours federal law, 3 hours ethics, 2 hours nontraditional, and 8 hours annual continuing education.
- Flood insurance requirement
- Lenders must require flood insurance for properties in Special Flood Hazard Areas if loan is federally related. Escrow of flood insurance required for residential improved real estate.
- Loan-to-value (LTV)
- Loan amount divided by appraised value or purchase price, whichever is less. Used to assess risk and determine mortgage insurance requirements.
- Combined LTV (CLTV)
- Sum of all liens on property divided by appraised value. Used when there is a second mortgage or home equity line of credit.
- Front-end DTI
- Housing payment (principal, interest, taxes, insurance) divided by gross monthly income. Expressed as a percentage.
- Back-end DTI
- Total monthly debt obligations including proposed housing payment divided by gross monthly income. Key underwriting metric.
- Conforming loan limit
- Maximum loan amount eligible for purchase by Fannie Mae or Freddie Mac, set annually by FHFA. 2025 baseline is $806,500 for one-unit properties in most areas.
- FHA mortgage insurance premium
- Upfront premium of 1.75% of base loan amount plus annual premium (0.55% for most 30-year loans >95% LTV, 0.50% for ≤95% LTV).
- VA funding fee
- Fee paid by borrower to VA, varies by down payment and first-time use. Example: 2.15% first use with 0% down, 3.3% subsequent use.
- USDA guarantee fee
- Upfront guarantee fee of 1% and annual fee of 0.35% of loan balance for USDA rural development loans.
- Adjustable-rate mortgage caps
- Limits on interest rate increases: initial adjustment cap, periodic cap, and lifetime cap. Example: 2/2/6 means 2% initial, 2% periodic, 6% lifetime.
- PITI
- Principal, interest, taxes, and insurance. The four components of a monthly mortgage payment, often held in escrow.
- Discount points
- Prepaid interest paid at closing to lower the interest rate. One point equals 1% of loan amount.
- Loan application trigger
- Receipt of six pieces of information: borrower name, income, SSN, property address, estimated value, and loan amount. Starts TRID timelines.
- Pre-qualification vs pre-approval
- Pre-qualification is an estimate based on unverified info; pre-approval involves credit and documentation review and is more reliable for making an offer.
- Appraisal copy delivery
- Borrower must receive a copy of the appraisal at least 3 days before closing under ECOA. Lender must promptly provide upon completion.
- Rate lock agreement
- Written commitment by lender to hold a specific interest rate for a set period. May include lock fee and extension fees.
- Closing Disclosure review
- Compare LE and CD to identify tolerance violations, explain changes to borrower, and ensure all fees are accurate before closing.
- NMLS unique identifier
- Number assigned to registered MLOs; must appear on all loan documents and advertisements. Renewed annually with background check.
- Fiduciary duty
- MLO must act in borrower's best interest, disclose conflicts, and avoid steering to higher-cost loans without disclosure.
- Fair lending
- Prohibits discrimination based on protected characteristics. Includes disparate treatment and disparate impact; redlining is illegal.
- Mortgage fraud
- Intentional misrepresentation to obtain mortgage. Includes occupancy fraud, income fraud, and appraisal fraud. Must report suspected fraud.
- GLBA privacy
- Requires privacy notices and safeguards for nonpublic personal information. Do not share borrower data without consent.
- UDAAP
- Unfair, Deceptive, or Abusive Acts or Practices prohibited under Dodd-Frank. Avoid misleading advertising and loan terms.