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Terms And Definitions 2024/2025 Exam Questions with Correct Answers
Terms And Definitions 2024/2025 Exam Questions with Correct Answers
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Terms And DefinitionsStudy online at https://quizlet.com/_3zo94z
1. ZONING A legal mechanism for local governments to regulate the
use of privately owned real property in order to prevent
conflicting land use and promote orderly development.
2. YIELD SPREAD The fee that a lender pays for a loan with an interest rate
PREMIUM (YSP) higher than the par rate on the day the loan was locked or
closed. Previously, this fee was used as a common form
of compensation for the broker. This practice has since
been declared unlawful, and any YSP must now be paid
to the borrower as a credit to reduce closing charges. See
also Borrower Credit.
a.k.a.: Borrower credit
3. WET SETTLE- A loan settlement in which the funds for the loan are
MENT disbursed on the same day as closing. Wet settlement is
generally required in most states for loan transactions not
subject to the right of rescission.
4. WARRANTY A deed in which the grantor warrants that the title is clear
DEED and free of any encumbrances.
5. WAREHOUSE A revolving line of credit used by mortgage brokers in
LINE OF CREDIT order to fund loans.
6. WAREHOUSE A fee charged by a lender and used to offset the cost
FEE associated with holding a mortgage until it can be sold on
the secondary market.
7. WAIVER The voluntary renunciation, abandonment, or surrender
of some claim, right, or privilege. In mortgage refinance
transactions, a borrower with the right of rescission can
waive it in certain circumstances.
8. VOID Having no legal force or effect; unenforceable.
9. VERIFICATION A document signed by the borrower's employer verifying
OF his/her position and salary.
EMPLOYMENT
(VOE)
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10. VERIFICATION A document signed by the borrower's financial institution,
OF DEPOSIT verifying the status and balance of his/her financial ac-
(VOD) counts.
11. VARI- A mortgage in which the interest rate is adjusted peri-
ABLE-RATE odically based on a pre-determined margin, index, and
MORTGAGE adjustment interval.
(VRM)
a.k.a.: ADJUSTABLE-RATE MORTGAGE (ARM)
12. VALUATION An estimate of the value of the consumer's principal
dwelling. Commonly used interchangeably with the term
"appraisal."
a.k.a.: Appraisal.
13. VA MORTGAGE A premium of up to 1.875% (depending on the size of the
FUNDING FEE down payment) paid to the VA on a VA-backed loan.
14. VA LOAN A long-term, low- or no-down payment loan guaranteed
by the Department of Veterans Affairs. Restricted to indi-
viduals qualified by military service.
15. USURY Interest charged in excess of the legal limit as established
by state law.
16. URAR Uniform Residential Appraisal Report. This is the docu-
ment used to convey information resulting from an ap-
praisal.
17. UPFRONT Mortgage insurance for an FHA loan that is paid at clos-
MORTGAGE ing.
INSURANCE
PREMIUM
(UFMIP)
18. UNSECURED A debt that has no collateral or security.
LOAN
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19. UNRECORDED An instrument that transfers title from one party (grantor)
DEED to another party (grantee), without providing public notice
of a change in ownership.
20. UNIFORM STATE An exam component set forth by the NMLS as part of
TEST (UST) testing requirements for individuals to obtain licensure as
mortgage loan originators. For those states that chose
to adopt the UST, previously-used state-specific exam
components were retired and replaced by UST content.
21. UNENCUM- Real estate with free and clear title.
BERED
PROPERTY
22. UNDERWRITING The process of evaluating a loan applicant's financial
information and facts about the real estate used to secure
a loan to determine whether a potential loan is an accept-
able risk for a lender.
23. TRIGGER TERM A term used in advertising that triggers the requirement
to provide additional specific information required under
the federal Truth-in-Lending Act.
24. TREASURY The current rate that the U.S. Treasury is paying on secu-
RATE (T-RATE) rities it issues.
25. TITLE THEORY States in which the lender's interest in a home is secured
STATE by a deed of trust. The lender is the beneficiary of the
deed of trust, and a third party ("trustee") holds the title
to the property during the loan term. In title theory states,
foreclosure is a non-judicial process that occurs outside
of the court system.
26. TITLE SEARCH An examination of county and/or municipal records to
determine the legal status of real property. Usually per-
formed by a title company or an attorney.
27. TITLE INSUR- A policy, usually issued by a title insurance company,
ANCE which insures against errors in the title search. A Buyer's
, Terms And Definitions
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Title Policy protects the homebuyer, and a Lender's Title
Policy protects the lender.
28. TITLE BINDER Temporary title insurance expected to soon be replaced
by a title insurance policy.
29. TITLE AB- A report containing the history of the title associated with
STRACT a particular property.
30. TITLE A document that gives evidence of an individual's owner-
ship of property.
31. TIME-PRICE DIF- A method of expressing the cost of financing, it is the
FERENTIAL difference between the loan amount and the sum of the
payments made over time.
32. THIRD-PARTY When a lender uses another party to completely or par-
ORIGINATION tially originate, process, underwrite, close, fund, or pack-
age the mortgages that it plans to deliver to the secondary
mortgage market.
33. THING OF VAL- Any payment, advance, loan, or service given. "Thing of
UE value" can include money as well as non-monetary items,
such as discounts, special rates, special services, meals,
tickets to events or entertainment, office equipment, ex-
pense reimbursements, or similar.
34. TESTER An individual who poses as a loan applicant to test a
creditor's fair lending policies and procedures.
35. TENANCY IN Ownership of property by two or more persons, each of
COMMON whom has an undivided interest. If an interest holder dies,
their interest is passed on to his or her heir(s).
36. TENANCY BY An estate that exists between spouses who have an equal
THE ENTIRETY right of possession and enjoyment during their lives, with
the surviving spouse taking complete possession of the
estate upon the death of the other.
37.
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