OH MLO key terms

A federal law requiring states to license and register mortgage loan originators, set minimum standards for testing and education, and maintain a nationwide registry of licensed originators.

The Nationwide Multistate Licensing System, an online database used by state regulators to process license applications, track continuing education, and publicly display an originator's licensing and disciplinary history.

The permanent number assigned to a mortgage loan originator through the NMLS registry, which must appear on loan documents and business cards so consumers can look up the originator's record.

A state-issued credential authorizing an individual to take residential mortgage applications, which requires pre-licensing education, a passing test score, a background check, and annual renewal.

The annual training mandate under the SAFE Act that licensed originators complete a set number of hours, including federal law, ethics, and non-traditional lending topics, to renew their license.

A federal law governing disclosures and settlement practices in federally related mortgage loans, prohibiting unearned fees and kickbacks while requiring a Loan Estimate and Closing Disclosure.

The RESPA rule barring giving or accepting anything of value in exchange for referring settlement service business or splitting charges when no actual service was performed.

A written RESPA disclosure given when a lender or agent refers a borrower to an affiliated settlement provider, stating the relationship and that the referral is not required.

A standardized three-page disclosure delivered within three business days of a mortgage application, summarizing the loan terms, projected payments, and estimated closing costs.

The final RESPA/TILA disclosure the borrower receives at least three business days before consummation, showing actual loan terms, payments, and the final settlement charges.

The permitted variance between estimated and actual closing costs on certain fee categories, classified as zero, ten percent, or unlimited, with violations requiring a refund to the borrower.

A federal consumer protection law requiring lenders to disclose credit costs in a uniform way, including the annual percentage rate and finance charge, and giving borrowers certain cancellation rights.

The cost of credit expressed as a yearly rate, incorporating the interest rate plus certain finance charges, allowing borrowers to compare the true cost of loan offers.

The total dollar cost of borrowing, including interest and specific fees the lender charges to extend credit, disclosed under TILA in the loan documents.

A three-business-day right under TILA for borrowers to cancel certain refinances or home equity loans secured by their primary residence without penalty.

A loan exceeding rate or fee thresholds under TILA's Home Ownership and Equity Protection Act, triggering extra disclosures, escrow requirements, and limits on prepayment penalties.

A federal law prohibiting creditors from discriminating against applicants on protected bases such as race, color, religion, national origin, sex, marital status, age, or receipt of public assistance.

A written notice a creditor must send within set deadlines when denying or altering credit terms, stating the reasons or informing the applicant of the right to request them.

The regulation implementing ECOA, detailing collection of applicant information, notice requirements, monitoring data, and rules on discrimination in credit transactions.

A federal law requiring covered lenders to collect and report data about mortgage applications, originations, and denials to help regulators detect discrimination and assess community credit needs.

The regulation implementing HMDA, specifying which institutions and loans are covered, what data fields must be collected, and how and when the data is reported.

The annual record of mortgage application data, including applicant demographics, loan purpose, and outcome, that HMDA-covered lenders compile and submit to regulators.

A federal law governing how consumer credit information is collected and used, requiring permissible purpose for credit reports and allowing consumers to dispute inaccurate information.

A legally valid reason under FCRA for a lender to obtain a consumer credit report, such as a credit application, existing account review, or a firm offer of credit.

A federal law restricting telemarketing calls and texts, requiring prior express consent for automated calls to cell phones and honoring do-not-call requests and opt-out notices.

The two core components of a monthly mortgage payment: the amount reducing the loan balance and the interest charged on the outstanding balance for that period.

The gradual repayment schedule that allocates each monthly payment between interest and principal until the loan balance reaches zero at maturity.

A lender-held account into which borrowers pay monthly amounts for property taxes and insurance, from which the servicer pays those obligations when due.

The loan amount divided by the property's appraised value or purchase price, used to assess risk and determine mortgage insurance and pricing requirements.

The total of all mortgage liens on a property divided by its value, used to evaluate risk when a borrower has a first and second mortgage or home equity line.

Insurance a borrower pays to protect the lender against loss when the loan-to-value ratio exceeds a set threshold, often required on conventional loans with small down payments.

A mortgage not insured or guaranteed by a government agency, typically subject to investor underwriting guidelines and available in conforming and non-conforming forms.

A conventional mortgage that meets the loan limit and underwriting standards set by Fannie Mae and Freddie Mac, allowing it to be sold on the secondary market.

A mortgage insured by the Federal Housing Administration, featuring lower down payment and credit requirements in exchange for mortgage insurance premiums.

A mortgage backed by a federal agency such as FHA, VA, or USDA, which protects the lender against loss and typically allows more flexible borrower qualifications.

A mortgage guaranteed by the Department of Veterans Affairs for eligible service members and veterans, often requiring no down payment and limited closing costs.

A loan whose interest rate and monthly principal and interest payment remain the same for the entire term, commonly thirty or fifteen years.

A loan whose interest rate changes periodically based on an index plus margin, starting with a fixed introductory period and subject to caps on increases.

A contractual limit on how much an adjustable-rate mortgage's rate can rise at each adjustment and over the life of the loan.

The submission of a borrower's financial information for credit evaluation, which triggers disclosure timing rules such as the Loan Estimate delivery requirement.

A lender's conditional commitment to lend a specified amount based on documented income, assets, and credit, subject to property appraisal and underwriting conditions.

The lender's process of evaluating credit, income, assets, and collateral against loan guidelines to decide whether to approve, conditionally approve, or deny the loan.

A borrower's total monthly debt obligations divided by gross monthly income, used to gauge capacity to repay and to apply loan program limits.

A record from a consumer reporting agency showing credit accounts, payment history, balances, and inquiries, used by lenders to evaluate creditworthiness.

An independent professional estimate of a property's market value, used to confirm the collateral supports the loan amount and to calculate the loan-to-value ratio.

The point at which the borrower becomes contractually obligated on the loan, which starts the three-business-day period before the Closing Disclosure must be delivered.

The marketplace where lenders sell existing mortgages to investors such as Fannie Mae, Freddie Mac, or private purchasers, replenishing funds to make new loans.

The process of pooling mortgage loans into securities sold to investors, transferring credit and interest rate risk from the lender to the capital markets.

The practice of ensuring advertising and outreach meet legal standards, including accurate APR disclosure, no deceptive claims, and required licensing identifiers.

A borrower's documented permission for a lender or originator to call, text, or email, which may be required before certain automated or marketing communications.

The improper practice of directing a borrower toward a particular loan product or settlement provider based on the originator's financial interest rather than the borrower's best interest.

The practice of pursuing foreclosure while simultaneously reviewing a borrower's loss mitigation application, which is restricted to protect borrowers seeking alternatives.

Options offered to a delinquent borrower to avoid foreclosure, such as modification, repayment plan, forbearance, or short sale, evaluated through a documented application process.