Chapter 22 Definitions
Chapter 22 Definitions
Terms
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- Closing Statement
- Detailed cash accounting of a real estate transaction showing all cash received, all charges and credits made and all cash paid out in the transaction
- Uniform Settlement Statement (HUD-1)
- Form required by RESPA includes all charges that will be collected at closing, whether required by the lender or a third party; must be available day before closing
- Good Faith Estimate (GFE)
- Settlement costs that borrower is likely to incur; must be given within three business days after loan application; should be pretty accurate
- Real Estate Settlement Procedures Act (RESPA)
- Federal law that requires certain disclosures to consumers about mortgage loan settlement; prohibits paying or receiving kickbacks and certain kinds of referral fees
- Prepaid Item
- On closing statement, items that have been paid by the seller, such as real estate taxes, for which he or she must be reimbursed by the buyer (credit seller, debit buyer)
- Affidavit of Title
- Written statement, made under oath, that grantor identifies himself and marital status, certifies that there are no new defects on title
- Kickbacks
- Prohibited unearned fees when no service has been rendered; i.e., receiving fees for making referrals to lenders, attorneys, surveyors, appraisers, etc
- Escrow
- Closing of transaction through third party called escrow agent; who receives funds and documents to be delivered upon performance of certain instructions
- Computerized Loan Origination
- Electronic network for handling load applications through remote computer terminals linked to various lenders' computer; borrower must pay for this extra service
- Controlled Business Arrangement
- One stop shopping for real estate consumers; consumer must be informed of relationship among the service providers and that other are available
- Proration
- Expenses, either prepaid or paid in arrears, that are divided or distributed between buyer and seller at closing
- Credit, Debit
- On closing statement, amount entered in a person's favor; either an amount that party has paid or amount for which party must be reimbursed; debit is amount charged