NY MLO key terms

The cost of credit expressed as a yearly rate, combining the interest rate with certain finance charges. Federal disclosure rules require it so borrowers can compare loan offers on a like-for-like basis.

The total dollar cost of credit over the life of the loan, including interest and specified fees such as origination charges and points. It is the dollar counterpart to the APR disclosure.

Federal law requiring clear disclosure of credit costs and terms. It gives borrowers a limited right to rescind certain refinances and sets advertising and disclosure standards for consumer mortgages.

The implementing regulation for TILA. It details disclosure timing, loan originator compensation limits, ability-to-repay standards, and rules for high-cost and higher-priced mortgage loans.

Federal law governing settlement practices. It requires disclosures at application and closing, restricts kickbacks and unearned fees, and regulates escrow accounts and servicing transfer notices.

The implementing regulation for RESPA, covering good-faith estimate and closing disclosure requirements, escrow account administration, servicing transfer and error resolution rules, and anti-kickback enforcement.

A three-page disclosure delivered within three business days of a mortgage application, showing estimated interest rate, monthly payments, closing costs, cash to close, and APR for comparison shopping.

A five-page form the borrower must receive at least three business days before consummation, stating the final loan terms and actual closing costs. It replaces the prior HUD-1 settlement statement.

The permitted variance between estimated and actual closing costs on the Loan Estimate. Some charges may not increase, some may rise up to ten percent in aggregate, and others have no limit.

An event such as a new property or a borrower-requested change that legitimately affects settlement charges and can justify issuing a revised Loan Estimate and resetting cost tolerances.

Regulation Z requirement that a creditor make a reasonable, good-faith determination the borrower can repay the loan, verified through documented income, assets, debts, and employment.

A loan meeting Regulation Z standards that give the creditor a safe harbor or rebuttable presumption of compliance with the ability-to-repay rule, subject to points-and-fees and product limits.

Regulation Z restriction prohibiting originator pay tied to loan terms or conditions other than the loan amount, and barring dual compensation from both the borrower and another party.

The borrower's right to cancel certain refinances and home equity loans secured by a principal dwelling within three business days after consummation or disclosure delivery, whichever is later.

RESPA provision barring giving or accepting anything of value in exchange for referrals of settlement service business, and barring splitting charges for services not actually performed.

An unearned payment or thing of value given to reward a referral of settlement service business. It is prohibited under RESPA regardless of whether the fee is disclosed to the borrower.

A relationship in which a person referring settlement business has an ownership interest in the provider. It requires a written disclosure of the arrangement and does not excuse the referral fee ban.

Federal law prohibiting discrimination in credit on grounds such as race, color, religion, national origin, sex, marital status, age, or receipt of public assistance income, with required adverse action notices.

The implementing regulation for ECOA. It governs collection of monitoring information, appraisal delivery, notice of incompleteness, and the content and timing of adverse action notices.

A written notice telling an applicant that credit was denied or terms changed unfavorably, stating the reasons and the applicant's ECOA rights. Timing and content are prescribed by Regulation B.

Federal law prohibiting discrimination in the sale, rental, and financing of housing based on protected characteristics, and requiring reasonable accommodation for persons with disabilities.

The practice of refusing or limiting credit in neighborhoods based on racial or ethnic composition rather than creditworthiness. It is unlawful under fair lending laws and may be proven by statistical evidence.

Federal law requiring covered lenders to collect and report data about mortgage applications, originations, denials, and borrower characteristics, used by regulators to detect discriminatory lending patterns.

The implementing regulation for HMDA. It defines reportable transactions, the data fields to be collected, and the annual reporting and public disclosure requirements for covered institutions.

Ethnicity, race, and sex data collected from mortgage applicants under Regulation B and HMDA, with a requirement to note how the information was obtained when the applicant declines.

Federal law requiring flood insurance on structures securing loans in special flood hazard areas, mandatory escrow in many cases, and notice to the borrower before closing.

An account holding borrower funds to pay property taxes, hazard insurance, and other recurring charges as they come due, with limits on the cushion a servicer may require.

The moment a borrower becomes contractually obligated on the credit transaction, typically at signing. It starts rescission and disclosure timing clocks under federal rules.

The written promise to repay a loan on stated terms, including principal, interest rate, payment schedule, and prepayment terms. It is the borrower's contractual obligation to the lender.

The instrument that pledges real property as security for a loan and gives the lender the right to foreclose on default. New York commonly uses a mortgage rather than a deed of trust.

The order in which liens on a property are paid from sale proceeds. First-lien status is determined by recording order, and a refinance can change a junior lien's position.

An agreement that a lien will rank below another lien in priority, often used so a homeowner can refinance a first mortgage while keeping a home equity line in place.

The schedule by which a loan is repaid through periodic payments split between interest and principal, with the principal share growing over time on a fully amortizing loan.

A loan whose interest rate changes periodically based on an index plus margin, subject to initial fixed periods, adjustment caps, and a lifetime ceiling disclosed to the borrower.

The benchmark rate an ARM follows plus the fixed percentage added to it. The sum sets the fully indexed rate, subject to periodic and lifetime caps in the note.

A limit on how much an ARM's rate may rise, either per adjustment period or over the life of the loan. Caps protect the borrower from unlimited payment shock.

Total monthly debt payments divided by gross monthly income. Underwriting uses it to gauge repayment capacity, and it is central to ability-to-repay and qualified mortgage tests.

The loan amount divided by the property's appraised value or purchase price, whichever is lower. Higher LTV generally raises risk and may require mortgage insurance.

The total of all mortgage liens on a property divided by its value, used to evaluate risk when a second lien or home equity line exists alongside the first mortgage.

Coverage protecting the lender against borrower default on loans with high LTV. Federal rules set cancellation and automatic termination rights based on amortization and property value.

A revolving credit line secured by a home, drawable as needed during a draw period and then repaid over a repayment period. Early disclosure and rescission rules apply.

An individual who takes a residential mortgage application and offers or negotiates loan terms for compensation. Federal rules require licensing, registration, and unique identifier disclosure.

Federal law establishing minimum standards for licensing and registering mortgage loan originators, including pre-licensing education, testing, background checks, and annual continuing education.

The permanent number assigned to a registered or licensed mortgage loan originator, which must appear on application and solicitation documents so consumers can check status.

The shared state and federal system for licensing, registering, and tracking mortgage companies and originators, holding applications, education records, and public licensing status.

Directing a borrower toward a loan that generates more originator compensation but is not in the borrower's interest, or away from a better-suited product. Regulation Z discourages it.

The obligation to act in the borrower's best interest rather than for personal gain, including disclosure of conflicts and avoidance of self-dealing. State law and licensing standards may impose it.

The federal agency that writes and enforces consumer financial rules, including Regulation Z, X, B, and C, and supervises larger mortgage lenders and servicers.

The state regulator that licenses mortgage bankers, brokers, and loan originators in New York, conducts examinations, and enforces state banking and mortgage lending laws.

The state credential required to originate residential mortgage loans in New York, obtained through NMLS with pre-licensing education, testing, sponsorship by a licensed entity, and continuing education.

The registration required of entities servicing mortgage loans on New York residential property, imposing duties related to payment processing, escrow handling, and borrower notices.

The article governing licensing of mortgage bankers and mortgage brokers in New York, setting application standards, permissible conduct, recordkeeping, and grounds for discipline.

State law requiring mortgage brokers and bankers to provide a written disclosure of the nature of their relationship and any fees to borrowers, with specific timing rules.

A consolidation, extension, and modification agreement used to combine an existing New York mortgage with new financing, often reducing mortgage recording tax owed on a refinance.

A New York tax imposed when a mortgage is recorded, calculated on the loan amount at rates that vary by county, plus a special additional tax in certain jurisdictions.

New York foreclosures proceed judicially through the courts, with a summons and complaint, settlement conference requirements, and a referee's sale, making timelines longer than in many states.

A charge imposed when a borrower pays off a loan early. Federal rules restrict such penalties on higher-priced loans, and some loan types and states limit them further.

The cost measure used to classify high-cost mortgages and test qualified mortgage limits, including origination charges, points, certain insurance premiums, and some closing costs.