108-150 Mortgage Products & Federal Law Overview

2nd Round These flashcards cover key mortgage vocabulary and federal law concepts essential for understanding the mortgage industry.

Graduated-Payment Loan

A loan with initial low monthly payments that gradually increase over time.

HELOC

Home Equity Line of Credit; a revolving loan using equity in the property.

Conventional Loan

A mortgage that meets guidelines set by Fannie Mae and Freddie Mac.

FHA Loan

A loan that is insured by the Federal Housing Administration, generally easier to obtain.

PMI

Private Mortgage Insurance; required for some loans to protect lenders from default.

HOEPA

Home Ownership and Equity Protection Act; requires additional protections for high-cost loans.

TRID

TILA-RESPA Integrated Disclosure Rule; simplifies the disclosure process for mortgage loans.

Loan Estimate (LE)

A disclosure that outlines the terms and costs of a mortgage loan.

Qualified Mortgage (QM)

A category of loans that meet specific underwriting and loan terms to ensure affordability.

Higher-Priced Mortgage Loans (HPML)

Loans with APRs above certain thresholds that require additional protections.

Debt-to-Income Ratio (DTI)

A measurement used to determine a borrower’s ability to repay a loan based on their debt obligations.

Lender Paid Compensation (LPC)

Compensation model where the lender pays the mortgage broker’s commission.

Borrower Paid Compensation (BPC)

Compensation model where the borrower pays the mortgage broker’s commission.

Predatory Lending

The practice of lending at unfairly high rates, targeting vulnerable borrowers.

Temporary Buydown

An upfront payment by a borrower to lower monthly payments temporarily.

Section 32

Regulatory section addressing high-cost home loans and the additional protections they require.

Escrow Account

An account established to hold funds for property taxes and insurance premiums.

Change in Circumstance

An event that allows for changes to previously disclosed loan terms or costs.