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12 terms

Chapter 22: Closing Real Estate Transaction

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Affidavit of Title
Written statement, made under oath, that grantor identifies himself and marital status, certifies that there are no new defects on title
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
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
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
Escrow
Closing of transaction through third party called escrow agent; who receives funds and documents to be delivered upon performance of certain instructions
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
Kickbacks
Prohibited unearned fees when no service has been rendered; i.e., receiving fees for making referrals to lenders, attorneys, surveyors, appraisers, etc
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)
Proration
Expenses, either prepaid or paid in arrears, that are divided or distributed between buyer and seller at closing
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
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