OH MLO flashcards

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

SAFE Act licensing requirement

A mortgage loan originator must be state-licensed or federally registered before taking a residential mortgage loan application, maintained through NMLS with education, testing, background check, and renewal requirements.

RESPA Section 8 prohibition

No fee, kickback, or thing of value may be exchanged for referrals of settlement service business; bona fide payment for services actually performed is permitted, and affiliated arrangements require written disclosure.

Qualified written request

A borrower's written request for servicing information or error correction; the servicer must acknowledge it within 5 business days and respond within 30 business days, extendable by 15.

TILA right of rescission

A 3-business-day right to cancel a refinance or home equity loan secured by a principal dwelling; it does not apply to purchase-money loans, business-purpose loans, or second homes.

ECOA adverse action notice

A notice of the action taken and the reasons for denial or other adverse decision, generally due within 30 days of a completed application under Regulation B.

HMDA reporting purpose

Regulation C requires covered institutions to report application, origination, and purchase data, including borrower demographics and pricing, to detect discrimination and monitor credit needs.

TRID Loan Estimate timing

The Loan Estimate must be delivered or mailed within 3 business days of application and received at least 7 business days before consummation of the loan.

APR versus note rate

The APR expresses the cost of credit as a yearly rate including financed fees, while the note rate is the interest rate stated in the promissory note.

Loan-to-value ratio

Loan amount divided by the lesser of the appraised value or purchase price; a higher LTV generally means greater risk and may require mortgage insurance.

Combined LTV

The sum of all mortgage liens on a property divided by the property value; used when a first and subordinate lien are used together.

Conforming loan limit

The maximum loan amount eligible for purchase by Fannie Mae or Freddie Mac, set annually by the FHFA; loans above it are jumbo and non-conforming.

FHA mortgage insurance premium

FHA loans require an upfront premium plus an annual premium paid monthly; the premiums protect the lender and are a cost to the borrower.

VA funding fee

A fee charged on VA-guaranteed loans that can be financed into the loan; certain veterans, such as those with service-connected disabilities, are exempt.

USDA rural eligibility

USDA loans require an eligible rural property and borrower income within program limits; they allow 100% LTV and charge a guarantee fee.

ARM index and margin

The index is the benchmark rate an ARM adjusts to, and the margin is the fixed amount added to it; periodic and lifetime caps limit how much the rate can change.

PITI components

Principal, interest, property taxes, and homeowners insurance; the sum is the borrower's monthly housing expense used in the housing ratio calculation.

Escrow cushion limit

RESPA limits the cushion a servicer may hold in an escrow account to one-sixth of the estimated total annual escrow disbursements.

Lender versus owner title policy

A lender's policy protects the lender's interest up to the loan balance; an owner's policy protects the buyer's equity and is usually sold at a simultaneous-issue discount.

Application date definition

The date the borrower submits the six pieces of information: name, income, Social Security number, property address, estimated value, and loan amount.

Zero-tolerance fees

Lender fees, transfer taxes, and fees paid to affiliates cannot increase from the Loan Estimate to the Closing Disclosure; an increase requires a valid changed circumstance and timely revised estimate.

Ten percent tolerance category

Recording fees and certain third-party charges may increase by no more than 10% in aggregate from the Loan Estimate to the Closing Disclosure.

Changed circumstance rule

An event beyond the parties' control that changes settlement charges permits a revised Loan Estimate if issued within 3 business days of learning of the change.

Appraiser independence

No person with a stake in the transaction may influence or attempt to influence an appraiser's value; appraisals must be ordered through an approved, independent channel.

Rate lock disclosure

A written commitment of the interest rate for a stated period, including the expiration date and any extension fee; changes in terms require revised disclosure.

Closing Disclosure timing

The Closing Disclosure must be received at least 3 business days before consummation; a change in loan product or an APR increase above 1/8 of a point restarts the waiting period.

Ability-to-repay verification

Lenders must document and retain income, assets, debts, and employment to confirm the borrower can repay; qualified mortgages must also meet product-feature and points-and-fees limits.

Good faith and fair dealing

An ethical duty to communicate honestly and accurately with borrowers and counterparties; misrepresenting loan terms breaches this duty even without intent to deceive.

GLBA privacy rule

Limits sharing of nonpublic personal information with unauthorized third parties and requires privacy notices; sharing requires borrower authorization or a permitted exception.

Referral steering conflict

Directing a borrower to an affiliated settlement provider for personal gain violates RESPA Section 8 and the duty to avoid conflicts of interest.

Fair lending consistency

Similarly situated applicants must be treated consistently, and prohibited factors such as race, religion, sex, marital status, age, or public assistance income may not be considered.

Unlawful discouragement

Discouraging an applicant from applying based on protected characteristics, neighborhood, or loan size can itself violate fair lending and ECOA requirements.

NMLS identifier in advertising

Advertising must be truthful and include required disclosures such as the originator's NMLS unique identifier and, where applicable, APR and equal housing opportunity statements.