NMLS SAFE EXAM Flashcards
A. Age All of the following are violations of the Fair Housing Act EXCEPT
A. Age
B. National Origin
C. Disability
D.Religion
Encrumbrance Claim against property held by one who is not the legal owner
Trigger Term Advertised term that requires additional disclosures
Advertising Disclosure An advertisement must be presented "clearly and conspicuously" to keep from
being deceptive, unfair, or otherwise violate a Commission rule
Waving Right of Rescission Extenuating circumstances such as "bona fide personal financial emergency
Right of Rescission Right that borrowers have to cancel a loan or line of credit with a lender within
three days of closing
Business Day When creditors office is open to the public, a calendar working day except
Sunday or a federal holiday
Application Financial information used for purposes of obtaining an extension of credit
Disclosure The act of making new information known
FTC Mission is to promote consumer protection and eliminate and prevent
Federal Trade Commission anticompetitive business practices
CFPB Regulatory agency charged with overseeing financial products and services
Consumer Financial Protection Bureau offered to consumers
TILA Enacted 1968 promotes the informed use of consumer credit by requiring
Truth in Lending Act disclosures about terms and costs and standardizes the manner in which costs
with borrowing are calculated and disclosed
Per Diem Interest Interest charged on a loan for one or more days
Annual Interest Rate Formula Principal (X) Interest Rate = Annual Interest Rate
Interest Only Mortgage Mortgage where the mortgagor is only required to pay off the interest that
arises from the principal that is borrowed for a set period
, NMLS SAFE EXAM Flashcards
Permanent Buydown Borrower chooses to pay additional "discount points" to buy down the interest
rate for the life of the mortgage note
2/1 Buydown Used on fixed rate loans over two years
Set of two initial temporary-start interest rates that increase in stair-step fashion
until a permanent interest rate is reached
Discount Point A form of pre-paid interest which effectively increases the yield on the loan
above the amount of the stated interest rate
CLTV An amount in addition to the Loan to Value, which simply represents the first
Combined Loan to Value position mortgage or loan as a percentage of the property's value
LTV Ratio of a loan to the value of an asset purchased
Loan to Value
PITI Principal, Interest, Taxes, Insurance
Refers to the components of a mortgage payment
DIF Housing to Debt
Ratio that measures an individual's ability to manage monthly payment and
repay debts
Forbearance Agreement between the lender and the borrower to delay foreclosure
Loan Modification A permanent restructuring of the mortgage where one or more of the terms of
a borrower's loan are changed to provide a more affordable payment
Foreclosure Legal process to collect debt on mortgaged property
Satisfaction of Mortgage Letter Document generated and signed by a mortgage lender, acknowledging that
the borrower has paid off the mortgage loan in full and the mortgage is not a
lien on the property
Subordination Agreement When two mortgages are on a property, this specifies which mortgage takes
precedence
, NMLS SAFE EXAM Flashcards
Payoff Statement Provides homeowner proof the mortgage is paid off
Constructive Note Legal presumption that anything recorded in a public record can be known by
anyone
Actual Note Direct knowledge that one has of the property
Inquiry Note Information that should compel a reasonable person to make further inquiries
about some aspect of the property
Title Record Serves as a central repository of information about a parcel of land
SRP Payment received by lender after selling a loan Based on market value
Service Release Premiums
GNMA Created in 1968, goal to expand affordable housing under HUD
Government National Mortgage Association
FNMA Created 1968 works with Fannie Mae to increase affordable lending
Federal National Mortgage Association
FHA Insures banks real estate loans and charges borrowers a small premium
Federal Housing Administration
HELOC A loan in which the lender agrees to lend a maximum amount within an agreed
Home Equity Line of Credit period
and is also an open-ended mortgage transaction that is secured
HECM A FHA insured reverse mortgage that allows the conversion of equity in a home
Home Equity Conversion Mortgage to cash
Balloon Mortgage A mortgage in which a large portion of the borrowed principal is repaid in a
single payment at the end of the loan period and does not amortize
ARM Interest Rate Adjustment Margin + Interset = Rate
COFI Regional average of interest expenses incurred by financial institutions which in
Cost of Fund Index turn is used as a base for calculating variable rate loans
ARM Loan that is lower than fixed rate in beginning
Adjustable Rate Mortgage Loan payment changes over time
Adjustable caps that vary
Used to obtain a higher loan amount
Fixed Rate Interest rate that remains the same over the life of the loan
, NMLS SAFE EXAM Flashcards
Non-Conforming Loan Does not meet Freddie Mac or Fannie Mae guidelines
Conforming Loan Conforms to terms and conditions set by government
Conventional Loan Not guaranteed or insured by the government but can still follow federal
guidelines
Acceleration Clause Accelerated loan repayment if property is in default
Exculpatory Clause Relieves one party form liability due to actions of another party
Defeasance Clause Creditor can obtain title without foreclosure process
Late Payement Penalty When fees are attached to late payment
Pre-Payment Penalty Fixed sum added to loan if loan is paid off early
Contract of Deed Complete financing and sales contract agreed upon by seller and seller with
no note attached
Note Promise to repay debt
Mortgage Pledge of collateral to secure a loan
Reconveyance A document issued by a mortgage holder indicating that the borrower is
released from the mortgage debt and transfers the property title from the
lender
Conveyance The act of transferring an ownership interest in real property from one party to
another
Mortgage Lock-In-Rate A guarantee a lender will deliver a specific combination of interest rate and
points if the mortgage closes by a specified date
Approval letter A document that states the loan amount a lender is willing to make a borrower
Pre-Qualification Letter Estimate of loan amount a borrower can get with limited financial information
Commitment Letter Indicates a borrower has passed lenders underwriting guidelines and that they
are willing to offer the borrower a home loan
Mortgage Approval Letter Letter subject to property specified for a loan and dependent on an appraisal
AUS A computer generated loan underwriting decision, using completed loan
Automated Underwriting System application information
Capacity A borrowers income assets
Credit The ability of a borrower to obtain goods or services before payment, based
on the trust that payment will be made in the future
Collateral Property a borrower can provide as security for a loan
A. Age All of the following are violations of the Fair Housing Act EXCEPT
A. Age
B. National Origin
C. Disability
D.Religion
Encrumbrance Claim against property held by one who is not the legal owner
Trigger Term Advertised term that requires additional disclosures
Advertising Disclosure An advertisement must be presented "clearly and conspicuously" to keep from
being deceptive, unfair, or otherwise violate a Commission rule
Waving Right of Rescission Extenuating circumstances such as "bona fide personal financial emergency
Right of Rescission Right that borrowers have to cancel a loan or line of credit with a lender within
three days of closing
Business Day When creditors office is open to the public, a calendar working day except
Sunday or a federal holiday
Application Financial information used for purposes of obtaining an extension of credit
Disclosure The act of making new information known
FTC Mission is to promote consumer protection and eliminate and prevent
Federal Trade Commission anticompetitive business practices
CFPB Regulatory agency charged with overseeing financial products and services
Consumer Financial Protection Bureau offered to consumers
TILA Enacted 1968 promotes the informed use of consumer credit by requiring
Truth in Lending Act disclosures about terms and costs and standardizes the manner in which costs
with borrowing are calculated and disclosed
Per Diem Interest Interest charged on a loan for one or more days
Annual Interest Rate Formula Principal (X) Interest Rate = Annual Interest Rate
Interest Only Mortgage Mortgage where the mortgagor is only required to pay off the interest that
arises from the principal that is borrowed for a set period
, NMLS SAFE EXAM Flashcards
Permanent Buydown Borrower chooses to pay additional "discount points" to buy down the interest
rate for the life of the mortgage note
2/1 Buydown Used on fixed rate loans over two years
Set of two initial temporary-start interest rates that increase in stair-step fashion
until a permanent interest rate is reached
Discount Point A form of pre-paid interest which effectively increases the yield on the loan
above the amount of the stated interest rate
CLTV An amount in addition to the Loan to Value, which simply represents the first
Combined Loan to Value position mortgage or loan as a percentage of the property's value
LTV Ratio of a loan to the value of an asset purchased
Loan to Value
PITI Principal, Interest, Taxes, Insurance
Refers to the components of a mortgage payment
DIF Housing to Debt
Ratio that measures an individual's ability to manage monthly payment and
repay debts
Forbearance Agreement between the lender and the borrower to delay foreclosure
Loan Modification A permanent restructuring of the mortgage where one or more of the terms of
a borrower's loan are changed to provide a more affordable payment
Foreclosure Legal process to collect debt on mortgaged property
Satisfaction of Mortgage Letter Document generated and signed by a mortgage lender, acknowledging that
the borrower has paid off the mortgage loan in full and the mortgage is not a
lien on the property
Subordination Agreement When two mortgages are on a property, this specifies which mortgage takes
precedence
, NMLS SAFE EXAM Flashcards
Payoff Statement Provides homeowner proof the mortgage is paid off
Constructive Note Legal presumption that anything recorded in a public record can be known by
anyone
Actual Note Direct knowledge that one has of the property
Inquiry Note Information that should compel a reasonable person to make further inquiries
about some aspect of the property
Title Record Serves as a central repository of information about a parcel of land
SRP Payment received by lender after selling a loan Based on market value
Service Release Premiums
GNMA Created in 1968, goal to expand affordable housing under HUD
Government National Mortgage Association
FNMA Created 1968 works with Fannie Mae to increase affordable lending
Federal National Mortgage Association
FHA Insures banks real estate loans and charges borrowers a small premium
Federal Housing Administration
HELOC A loan in which the lender agrees to lend a maximum amount within an agreed
Home Equity Line of Credit period
and is also an open-ended mortgage transaction that is secured
HECM A FHA insured reverse mortgage that allows the conversion of equity in a home
Home Equity Conversion Mortgage to cash
Balloon Mortgage A mortgage in which a large portion of the borrowed principal is repaid in a
single payment at the end of the loan period and does not amortize
ARM Interest Rate Adjustment Margin + Interset = Rate
COFI Regional average of interest expenses incurred by financial institutions which in
Cost of Fund Index turn is used as a base for calculating variable rate loans
ARM Loan that is lower than fixed rate in beginning
Adjustable Rate Mortgage Loan payment changes over time
Adjustable caps that vary
Used to obtain a higher loan amount
Fixed Rate Interest rate that remains the same over the life of the loan
, NMLS SAFE EXAM Flashcards
Non-Conforming Loan Does not meet Freddie Mac or Fannie Mae guidelines
Conforming Loan Conforms to terms and conditions set by government
Conventional Loan Not guaranteed or insured by the government but can still follow federal
guidelines
Acceleration Clause Accelerated loan repayment if property is in default
Exculpatory Clause Relieves one party form liability due to actions of another party
Defeasance Clause Creditor can obtain title without foreclosure process
Late Payement Penalty When fees are attached to late payment
Pre-Payment Penalty Fixed sum added to loan if loan is paid off early
Contract of Deed Complete financing and sales contract agreed upon by seller and seller with
no note attached
Note Promise to repay debt
Mortgage Pledge of collateral to secure a loan
Reconveyance A document issued by a mortgage holder indicating that the borrower is
released from the mortgage debt and transfers the property title from the
lender
Conveyance The act of transferring an ownership interest in real property from one party to
another
Mortgage Lock-In-Rate A guarantee a lender will deliver a specific combination of interest rate and
points if the mortgage closes by a specified date
Approval letter A document that states the loan amount a lender is willing to make a borrower
Pre-Qualification Letter Estimate of loan amount a borrower can get with limited financial information
Commitment Letter Indicates a borrower has passed lenders underwriting guidelines and that they
are willing to offer the borrower a home loan
Mortgage Approval Letter Letter subject to property specified for a loan and dependent on an appraisal
AUS A computer generated loan underwriting decision, using completed loan
Automated Underwriting System application information
Capacity A borrowers income assets
Credit The ability of a borrower to obtain goods or services before payment, based
on the trust that payment will be made in the future
Collateral Property a borrower can provide as security for a loan
