PA MLO flashcards

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 accepting any fee, kickback, or thing of value in exchange for referring settlement service business on a federally related mortgage loan; payment must be for actual services at fair market value.

Loan Estimate timing

The creditor must deliver or place the Loan Estimate in the mail within three business days after receiving the application, and the borrower must receive it at least seven business days before consummation.

Closing Disclosure timing

The borrower must receive the Closing Disclosure at least three business days before consummation; if revised terms are delivered, a corrected disclosure restarts the three-business-day waiting period.

Right of rescission

Three business days after consummation to cancel a non-purchase, non-business-purpose loan secured by the principal residence, such as a refinance or home equity line; purchase loans are excluded.

Adverse action deadline

Under Regulation B, written adverse action notice must be provided within thirty days after receiving a completed application, stating the action taken and the reasons or how to request them.

Zero tolerance fees

TRID fees that cannot increase include lender origination charges, fees for services the consumer cannot shop for, and transfer taxes; an increase requires a corrected disclosure and a refund.

ATR eight factors

Income and assets, employment status, monthly payment on the covered loan, simultaneous-loan payments, other mortgage-related obligations, total debts relative to income, credit history, and residual income.

HOEPA points and fees

A loan is high-cost when total points and fees exceed five percent of the total loan amount for loans above the adjusted threshold, or the lower percentage or dollar cap for smaller loans.

Loan-to-value ratio

The loan amount divided by the lesser of the sales price or the appraised value; this percentage measures lender exposure and drives mortgage insurance and pricing.

Combined loan-to-value

The total of all liens secured by the property divided by the appraised value; used when a subordinate lien, piggyback, or home equity loan is layered on the first mortgage.

Fully indexed rate

The ARM's margin plus the current value of its index; this is the rate that would apply after the initial fixed period, before any periodic or lifetime caps are applied.

PMI automatic termination

For borrower-paid mortgage insurance on a conforming first lien, coverage must end automatically when the balance reaches seventy-eight percent of original value under the amortization schedule, with good payment history.

VA funding fee

A percentage of the loan amount charged to most eligible veterans, varying by down payment size and first versus subsequent use; veterans with a service-connected disability are typically exempt.

FHA upfront MIP

A mortgage insurance premium equal to 1.75 percent of the base loan amount, usually financed into the loan at closing; annual MIP is also collected monthly based on term and LTV.

Conforming loan limit

The maximum loan amount eligible for sale to Fannie Mae or Freddie Mac, updated annually by FHFA and varied by county; loans exceeding the limit are non-conforming or jumbo.

Six application items

Borrower name, Social Security number, income, property address, estimated property value, and loan amount. Providing all six triggers the three-business-day Loan Estimate requirement.

Form 1003

The Uniform Residential Loan Application that captures borrower, employment, income, asset, and property information; its date generally starts disclosure and timeline obligations.

Representative credit score

The middle of the three bureau scores for one borrower; when two or more borrowers apply, the lowest borrower middle score is used for pricing and eligibility.

Rate lock

A lender commitment holding a specified interest rate for a defined period; if closing occurs after the lock expires, an extension fee or repricing to current market may apply.

URAR Form 1004

The Uniform Residential Appraisal Report used for single-family properties; the appraiser must remain independent and the borrower must receive a copy promptly, no later than three business days before consummation.

Occupancy fraud indicator

A borrower certifying a primary residence while intending to rent it; red flags include a distant current address, investor-style down payment, and rental income expectations not disclosed on the application.

Disparate impact

A facially neutral policy or practice that produces a disproportionately adverse effect on a protected class, even without discriminatory intent, and may violate fair lending law.

Affiliated business arrangement

A disclosure required when a settlement service provider refers a customer to an affiliated company; the customer must be told of the relationship and cannot be required to use the affiliate.

Steering

Directing a borrower toward loan products or terms less favorable than those the borrower qualifies for, often to increase compensation, which violates fair lending and licensing obligations.

Suspicious Activity Report

A confidential report financial institutions file with FinCEN when they suspect fraud, money laundering, or other illegal activity; the MLO must not tip off the subject.

Marketing services agreement

A contract in which a settlement provider pays a marketer for marketing services; it is permissible only when payments reflect fair market value for actual services and not referral volume.

SAFE pre-licensing hours

At least twenty hours of pre-licensing education, including three hours of federal law, three hours of ethics, two hours of non-traditional mortgage lending, plus hours set by state requirement.

Annual continuing education

At least eight hours yearly: three hours federal law and regulation, two hours ethics, two hours non-traditional mortgage lending standards, and the remainder as each state requires, completed by December 31.

Temporary Authority to Operate

Authority allowing an eligible MLO who moves to a new state to originate for up to 120 days while the new license application is pending, if statutory criteria are met.

NMLS renewal window

The annual license renewal period runs from November 1 through December 31; renewal and continuing education must be completed or the license lapses and origination must stop.

National test passing score

MLOs must pass the NMLS national test with Uniform State Content, plus a state-specific component where required; the passing scaled score is 75.

NMLS Consumer Access

A free public database where consumers can confirm an MLO's license status, review employment history, and see regulatory actions and complaints filed against the licensee.