OK MLO key terms

The cost of credit expressed as a yearly rate, combining interest, points, and certain finance charges. Federal disclosure rules require it on loan estimates and closing disclosures so borrowers can compare offers.

The total dollar amount of credit costs a borrower pays, including interest, origination fees, points, and certain closing costs. It is the dollar counterpart to the APR on required federal disclosures.

A three-page federal disclosure given within three business days after a mortgage application. It shows estimated interest rate, monthly payment, closing costs, cash to close, and APR in a standardized comparison format.

A five-page federal form the borrower must receive at least three business days before consummation. It states final loan terms, projected payments, closing costs, and cash to close, replacing the earlier estimates.

A limit on how much a disclosed closing cost may increase before the lender must refund the difference. Categories are zero tolerance, ten percent cumulative, and unlimited, based on whether the lender controls the fee.

An event such as a revised loan amount, new appraisal finding, or borrower-requested change that permits a lender to issue a revised Loan Estimate and reset tolerance baselines under defined timing rules.

The moment a borrower becomes contractually obligated on the credit transaction, typically at signing. It anchors disclosure timing rules, including the three-business-day review period before closing.

A borrower's right to cancel certain refinances or home equity loans secured by a principal residence within three business days after consummation or disclosure delivery, whichever is later, without penalty.

A federal requirement that lenders make a reasonable, good-faith determination a borrower can repay a mortgage based on verified income, assets, debts, and employment, using eight specified underwriting factors.

A loan meeting federal product-feature and underwriting standards that gives the lender a legal safe harbor or rebuttable presumption of compliance with ability-to-repay rules.

A closed-end loan secured by a principal residence whose APR or points-and-fees exceed federal rate thresholds. It triggers escrow, appraisal, and prepayment protections beyond standard requirements.

A federal law imposing extra disclosures and prohibitions on high-cost mortgages exceeding rate or fee triggers, restricting balloon payments, prepayment penalties, and certain late charges.

A federal law governing settlement practices for federally related mortgages, requiring disclosures, limiting escrow practices, and prohibiting unearned fees and illegal referral payments.

The RESPA rule barring giving or accepting anything of value for referrals of settlement service business and barring fee splits for services not actually performed.

An account the servicer holds to pay property taxes and hazard insurance on the borrower's behalf. Federal rules cap cushions and require annual statements and timely disbursements.

A federal law prohibiting creditors from discriminating based on race, color, religion, national origin, sex, marital status, age, or receipt of public assistance income, and requiring adverse action notices.

A federal law prohibiting discrimination in the sale, rental, and financing of housing based on protected classes, including race, color, religion, sex, disability, familial status, and national origin.

Illegal practice of denying or limiting credit or housing services in specific neighborhoods, often defined by race or ethnicity, rather than judging individual applicants on their own merits.

A written notice to an applicant explaining that credit was denied or terms changed, listing the specific reasons and disclosing rights, typically within thirty days of a completed application.

The borrower's written promise to repay a specific sum under stated terms, including interest rate, payment schedule, and maturity. It is the legal debt instrument separate from the mortgage.

The security instrument pledging real property as collateral for a loan, giving the lender or trustee the right to foreclose if the borrower defaults. Oklahoma commonly uses mortgages and deeds of trust.

The ranking that determines which claim on a property is paid first in foreclosure. First-lien status is generally set by recording order, so recording and escrow timing matter.

The gradual reduction of loan principal through scheduled payments. A fully amortizing loan retires debt by maturity, while interest-only or balloon structures leave a balance due.

A lump sum due at the end of a loan term that is larger than the normal periodic payment because the loan is not fully amortized over its stated schedule.

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

A borrower's total monthly debt payments divided by gross monthly income, expressed as a percentage. Lenders use it to gauge repayment capacity and to test qualified mortgage limits.

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

Insurance protecting the lender against loss when a borrower's down payment is small, usually required above eighty percent LTV. Federal rules govern its cancellation and automatic termination.

An independent, licensed opinion of a property's market value based on inspection and comparable sales, required for most mortgages and subject to federal independence standards.

Coverage protecting the lender or owner against losses from defects in title, such as undisclosed liens, forged documents, or recording errors, discovered after closing.

The legal process by which a lender enforces its security interest after default, selling the property to satisfy the debt. Oklahoma recognizes judicial and, for deeds of trust, nonjudicial procedures.

Under federal rules, the submission of a borrower's name, income, social security number, property address, estimated value, and loan amount. Receipt starts disclosure and timing obligations.

A lender's written conditional commitment to lend up to a stated amount based on verified income, assets, and credit, subject to property approval. It differs from prequalification, which is informal.

A lender's commitment to hold a specified interest rate and points for a set period, often with a fee, and subject to extension or float-down terms stated in the agreement.

The lender's process of verifying income, assets, credit, collateral, and program eligibility, then deciding whether to approve, conditionally approve, suspend, or deny the loan.

Requirements the underwriter places on a loan approval, such as additional bank statements, a repair inspection, or a letter of explanation, that must be cleared before closing.

A legal obligation to act in the client's best interest, placing the client's interests ahead of the loan originator's compensation, and requiring loyalty, candor, and full disclosure.

An illegal payment or thing of value given to a person for referring settlement service business. Federal law prohibits it even when the borrower is not directly charged.

Directing a borrower toward a loan, product, or neighborhood based on the originator's compensation or the borrower's protected characteristics rather than the borrower's actual interest.

Situations where an originator's compensation, affiliations, or outside interests could bias advice to a borrower. They must be disclosed and managed, not hidden.

Oklahoma statute requiring mortgage loan originators, brokers, and lenders to be licensed or registered through the state administrator, with testing, education, surety bond, and renewal obligations.

The shared state and federal system used to apply for, maintain, and track mortgage licenses, including fingerprints, credit reports, education records, and testing results.

Federal law setting minimum standards for mortgage loan originator licensing, including pre-licensing education, a national test, background screening, and annual continuing education.

A bond an Oklahoma licensee must maintain to guarantee compliance with state mortgage law. It protects the public and the state, and is not insurance for the licensee's own losses.

A formal written notice to a borrower that a default has occurred and that foreclosure may follow if it is not cured within the period allowed by state law or the security instrument.

The state agency regulating real estate brokers and sales associates in Oklahoma. It also enforces related license law provisions, and its rules are distinct from mortgage licensing rules.