PA MLO key terms

A federal law that requires lenders to disclose credit terms and costs clearly, including the annual percentage rate, finance charge, and payment schedule, so borrowers can compare loan offers.

A federal law governing settlement services for federally related mortgage loans. It requires disclosures, restricts escrow practices, and prohibits giving or receiving fees for referral of business.

A regulation implementing TILA and RESPA that combines mortgage disclosures into the Loan Estimate and Closing Disclosure, helping borrowers understand loan terms, costs, and cash needed at closing.

A federal law that prohibits creditors from discriminating against credit applicants on the basis of race, color, religion, national origin, sex, marital status, age, or receipt of public assistance.

A federal law that prohibits discrimination in the sale, rental, and financing of housing based on race, color, religion, sex, national origin, familial status, or disability.

A federal law requiring certain mortgage lenders to collect and report data about loan applications, originations, and denials to help regulators identify discriminatory lending patterns and meet community credit needs.

A federal law that established national licensing and registration requirements for mortgage loan originators through the NMLS, including education, testing, and background check standards.

A regulation requiring lenders to make a reasonable, good-faith determination that a borrower can repay a mortgage loan; Qualified Mortgages meeting specific standards receive legal protection.

The cost of credit expressed as a yearly rate, including interest and certain fees, designed to help borrowers compare the true cost of different mortgage loan offers.

A written promise by a borrower to repay a specific sum of money to a lender under stated terms, including the interest rate, payment schedule, and maturity date.

A legal document that pledges real property as security for a loan, giving the lender the right to foreclose if the borrower fails to repay the debt.

The amount of a mortgage loan divided by the appraised value or purchase price of the property, expressed as a percentage; higher LTV generally means greater lender risk.

A borrower's total monthly debt payments divided by gross monthly income, expressed as a percentage; lenders use it to evaluate a borrower's ability to repay.

An account held by a mortgage servicer to collect and hold portions of monthly payments for property taxes and insurance, then pay those bills when they come due.

Insurance that protects the lender if a borrower defaults, typically required when the down payment is less than 20 percent on a conventional mortgage loan.

A mortgage with an interest rate that can change periodically based on a specified index and margin, causing monthly payments to rise or fall over the loan term.

Prepaid interest paid at closing to reduce the interest rate on a mortgage, with one point equal to one percent of the loan amount.

A standardized disclosure provided by a lender within three business days after a mortgage application, showing estimated loan terms, projected payments, and closing costs.

A standardized disclosure that borrowers must receive at least three business days before closing, detailing final loan terms, costs, payment schedule, and cash needed to close.

The standard mortgage application form, often called Form 1003, used to collect borrower information about income, assets, debts, and the property being financed.

A lender's conditional commitment to lend based on a verified review of the borrower's credit, income, and assets, usually subject to property appraisal and other conditions.

A borrower's written statement to the lender indicating the desire to continue with a mortgage application after receiving the Loan Estimate, allowing the lender to collect certain fees.

A computer-based system that evaluates loan application data against lender and investor guidelines to produce an eligibility recommendation, such as approve/eligible or refer.

An intermediary who arranges mortgage loans for borrowers with lenders but does not fund the loans, typically receiving compensation from the borrower, lender, or both.

A legal obligation to act in the best interest of another party, requiring loyalty, confidentiality, disclosure of conflicts, and avoidance of self-dealing in mortgage origination relationships.

An illegal payment or thing of value given or received as an inducement for the referral of settlement service business, prohibited by the Real Estate Settlement Procedures Act.

Directing a borrower toward a loan product or lender based on the originator's financial interest rather than the borrower's best interest or loan qualifications.

Abusive lending practices that impose unfair or deceptive terms, excessive fees, or unsuitable loans on borrowers, often targeting vulnerable consumers who may not understand the risks.

A situation where a mortgage professional's personal or financial interests could improperly influence their professional judgment or duties to a borrower or employer.

The online system used by state regulators to license and register mortgage loan originators, companies, and branches, and to track regulatory and enforcement information.

A number assigned by the NMLS to each mortgage loan originator, allowing consumers and regulators to track the individual's licensing and employment history.

State authorization required for an individual to take mortgage applications, offer or negotiate loan terms, or assist consumers in obtaining residential mortgage loans for compensation.

Required coursework that an individual must complete before obtaining a mortgage loan originator license, covering federal and state mortgage laws, ethics, and origination practices.

Ongoing annual coursework required for licensed mortgage loan originators to maintain their license and stay current on laws, regulations, and industry practices.

A bond required by many state regulators as a condition of licensure, providing funds to compensate consumers or the state for certain violations or losses caused by the licensee.

A relationship in which a licensed mortgage company employs or contracts with a mortgage loan originator and authorizes the originator to conduct business under its license.