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Real Estate - Ch. 14
Closing the Real Estate Transaction
| Term | Definition |
|---|---|
| accrued items | On a closing statement, items of expense that are incurred but not yet payable, such as interest on a mortgage loan or taxes on real property. |
| affiliated business arrangement (ABA) | Practice of one company offering a package of services to consumers. |
| closing | An event where promises made in a sales contract are fulfilled and mortgage loan funds (if any) are distributed to the buyer. |
| Closing Disclosure | The CFPB form that itemizes all charges that are normally paid by a borrower and a seller in connection with settlement, whether required by the lender or another party, or paid by the lender or any other person. |
| closing statement | an accounting of the parties’ debits and credits. |
| credit | On a closing statement, an amount entered in a person’s favor—either an amount the party has paid or an amount for which the party must be reimbursed. |
| debit | On a closing statement, an amount charged; that is, an amount that the debited party must pay. |
| escrow account | The trust account established by a real estate professional under the provisions of the license law for the purpose of holding funds on behalf of the real estate professional’s principal. |
| escrow closing | Occurs when a disinterested third party is authorized to act as escrow agent (escrow holder) and to coordinate the closing activities on behalf of the buyer and the seller. |
| impound account | An account that the mortgage lender may require a borrower to have to accumulate funds to pay future real estate taxes and insurance premiums. |
| Loan Estimate | A CFPB form that highlights the information that historically has been the most important to consumers. Interest rate, monthly payment, and total closing costs are clearly presented on the first page. |
| Mortgage Disclosure Improvement Act (MDIA) | Enacted in July 2008 as an amendment to the Truth in Lending Act (TILA) to require mortgage loan cost disclosures to consumers. |
| mortgage servicing transfer statement | Disclosure required by the lender if the lender intends to sell or assign the right to service the loan to another loan servicer. |
| prepaid items | On a closing statement, items that have been paid in advance by the seller, such as fuel costs and some real estate taxes, for which the seller must be reimbursed by the buyer. |
| prorations | Expenses, either prepaid or paid in arrears, that are divided or distributed between the buyer and the seller at the closing. |
| Real Estate Settlement Procedures Act (RESPA) | The federal law that requires certain disclosures to consumers about mortgage loan settlements. The law also prohibits the payment or receipt of kickbacks and certain kinds of referral fees. |
| survey | The process by which boundaries are measured and land areas are determined; the on-site measurement of lot lines, dimensions, and position of a house on a lot, including the determination of any existing encroachments or easements. |
| TILA-RESPA Integrated Disclosure Rule | replaced the previous disclosure forms with two new forms |
Created by:
katiestapley
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