Federal Law and Mortgage Glossary Terms

Flashcards for understanding federal laws and mortgage-related terminology.

National Flood Insurance Act (NFIP)

Provides flood insurance to protect property owners from flood damage.

Flood Disaster Protection Act (FDPA)

Includes provisions requiring flood insurance in Special Flood Hazard Areas.

Homeowners Flood Insurance Affordability Act (HFIAA)

Mandates that all loans must escrow flood insurance regardless of loan-to-value (LTV) ratios.

Consumer Financial Protection Bureau (CFPB)

Federal agency that oversees consumer financial products and practices.

Truth in Lending Act (TILA)

Requires lenders to disclose critical information about loan terms and costs.

Real Estate Settlement Procedures Act (RESPA)

Federal statute that aims to protect consumers in the settlement process of real estate transactions.

Adjustable-Rate Mortgage (ARM)

A mortgage with an interest rate that changes periodically based on an index.

Loan Estimate (LE)

A document that provides estimated terms and costs of a mortgage loan.

Good Faith Estimate (GFE)

An estimate of the loan costs provided to the borrower at the beginning of the loan process.

Prepayment Penalty

A fee charged to the borrower if the mortgage is paid off before a specified time.

Debt-to-Income Ratio (DTI)

A ratio used by lenders to measure a borrower's ability to manage monthly payments.

Escrow Account

An account held by a third party to pay for costs associated with property taxes and insurance.

Affiliated Business Arrangement (AfBA)

An agreement where a person refers business to a real estate service provider they have an interest in.

Forbearance

An agreement to temporarily reduce or suspend payments due to borrower hardship.

Equity

The difference between the market value of a property and the amount owed on it.

FHA Mortgage Insurance Premium (MIP)

An insurance policy that protects lenders against borrower default on FHA loans.

Fixed-Rate Mortgage

A mortgage with a constant interest rate throughout the life of the loan.

Judgment Lien

A court-ordered claim against a debtor's property due to a legal judgment.

Appraisal

An evaluation of property value conducted by a certified appraiser.

Home Equity Line of Credit (HELOC)

A revolving line of credit secured by the equity in a home.

Late Charge

A fee incurred for failing to make a loan payment by the due date.