an underwriter for further manual review and analysis.

Colibri Real Estate NJ Chapter 14 Flashcards RedliningThe illegal refusal to make loans or provide insurance on a property located in certain neighborhoods for discriminatory reasons. This discriminatory practice was addressed in 1977 with the passage of the Community Reinvestment Act (CRA) Automated Underwriting SystemsAUS speeds up the approval process and provides consistent underwriting decisions using statistical computer models based on traditional underwriting factors. Makes a recommendation to accept a loan for delivery or refer it for an underwriter for further manual review and analysis.Settlement ServicesAny service provided in connection with a prospective or actual settlement of a real estate transaction, including, but not limited to, those provided by lenders, title companies, real estate brokers, property inspectors, attorneys, appraisers, etc.EntitlementA veterans maximum guarantee amount.PITIPrincipal, Interest, Taxes, Insurance FHA 251An adjustable (ARM) loan. FHA ARM loans are limited to one to four family dwellings or condominiums.Equal Credit Opportunity Act (ECOA)Implemented as regulation B ensures that all consumers are given an equal chance to obtain credit. Prohibits discrimination against individuals and businesses. Indicates that someone cannot even be discouraged from applying for credit. Notify applicants within 30 days of filing a complete application. Also gives consumers the right to receive a copy of any appraisal report on the property that was used in the decision making process.Loan Estimate waiting periodsThere is a mandatory seven day waiting period from the time the MLO delivers the required loan estimate to a borrower before a home can close. Closing disclosure will be required after which the borrower is given another three business day period to review the disclosures before the loan can close. A borrow may be able to waive the waiting periods and expedite the closing if theres a bona fide personal financial emergency such as to avoid foreclosure.Comprehensive Loss Underwriting Exchange (CLUE) A national database maintained by Lexis/Nexis that tracks insurance claim history on real property and automobiles.DD-214A Certificate of Release or Discharge from Active Duty issued by the Department of Defense.debt-to-income ratioa more realistic measure of the borrower's ability to make the loan payments as it shows the relationship of the

borrower's total monthly debt obligations (including PITI and long term debts) to income, expressed as a percentage. Not to exceed 36% of gross monthly income.

Quality Source of Incomeone that is reasonably reliable, such as income from an established employer, government agency, interest-yielding investment account, etc.Homeowners Protection Act of 1998 (HPA)Requires lenders to automatically cancel PMI when a home has been paid down to 78% of its original value assuming the borrower is not delinquent. Also requires lenders to drop PMI coverage at a borrower's request when the loan has been paid down to 80% or less of the home's value and mortgage payments are current. Considers the present value of the home.DefaultBorrowers who fail to repay the debt according to the terms of the agreement.Direct EndorsersFHA insures loans for one to four family homes made by approved lenders.Conditional ApprovalUsually requires the borrower to provide missing or additional items such as a closing statement from the sale of the buyer's previous home, a final inspection report, or proof of insurance.Fair Credit Reporting ActIndicates that consumer reporting agencies may maintain bankruptcy information on a consumer's credit report for no longer than 10 years from the date of entry of the order for relief or the date of adjudication whichever the case may be. Chapter 13 Often kept on credit report only for seven years after the discharge date.Real Estate Settlement Procedures Act (RESPA) Passed by congress in 1974 and implemented as Regulation X to protect consumers by requiring lenders to disclose actual closing costs in a timely manner.FHA 203KA loan structured to allow the buyer to purchase the home and borrow enough money for the purchase price, plus renovation expenses.Repayment PlanThe lender and the homeowner reach an agreement in which an additional predetermined amount is added to the mortgage payment for several months until the delinquent amount is paid in full bringing the account current.Borrowers can then focus on rebuilding their credit while remaining in the home.PrequalificationThe informal process of determining how much a potential homebuyer might be eligible to borrow. Does not gurantee approval, non binding.PreapprovalProcess by which a lender determines if potential borrowers can be financed through the lender, and for what amount of money. The lender is rendering a credit decision.Mortgage Factor TableAn easy looking method to see how much an individual would owe on a per $1000 basis. Broken down into one or more terms.

National Flood Insurance Program (NFIP)Flood insurance is purchased through Community Reinvestment ActRequired banks to make loans available in low income, minority communities. Provides down payment assistance, subsidized mortgage interest rates, help with closing costs, or a combination of services. Some programs allow people to buy homes with lower down-payments than conventional loans. Interest rate subsidies may also be obtained from a variety of sources.FloatBetween the time of application and closing a borrower may choose to bet on interest rates decreasing by electing to _____. Choosing not to lock the interest rate.DebtAny recurring monetary obligation that cannot be canceled.Combined Loan to Value (CLTV)Total amount borrowed Private Mortgage Insurance (PMI)Offered by private companies to insure a lender against default on a loan by a borrower where there is loss of collateral value at the time of the default. Lender assumes part of the risk, not the entire loan amount but rather the upper portion of the loan that exceeds the standard 80% LTV.Loan-to-Value Ratio (LTV)Loan Amount ÷ Sales Price or Appraised Value (Whichever is less) The relationship between the amount of money being loaned and the value of the property.Chapter 7 BankruptcySometimes called straight bankruptcy, this is a liquidation proceeding. The debtor turns over all nonexempt property to the bankruptcy trustee who then converts it to cash for distribution to the creditors. The debtor recieves a discharge of all dischargeable debts usually within four months.Hazard InsuranceA policy that covers loss or damage to the home or property in the event of fire or other disaster such as tornado, snow, and hail damage.BankruptcyA court process that cancels debt and provides some relief for creditors.Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010 Promote financial stability by improving accountability and transparency in the financial system.Discount PointsPoints (1% of the loan amount) the borrower chooses to pay at the beginning of a loan to reduce the note interest rate charged. This allows a buyer to pre pay some of the interest in return for lower monthly payments. Generally each point brings down the interest rate 1/8 of a percent.Chapter 13 BankruptcyThis is filed by individuals who want to pay off their debts over a period of three to five years. This is preferable to those who have nonexempt property that they want to keep.