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Ch 22
Closing the real estate transaction
| Term | Definition |
|---|---|
| Accrued items | On a closing statement, items of expense that are incurred but not yet payable, such as interest on a mortgage loan or taxes on real property |
| closing | an event where promises made in a sales contract are fulfilled and mortgage loan funds (if any) are distributed to the buyer |
| closing statement | a detailed cash accounting of a real estate transaction showing all cash received, all changes and credits made, and all cash paid out in the transaction |
| credit | on a closing statement, an amount entered in a person's favor--either an amount the party has paid or sa amount for which the party must be reimbursed |
| debit | on a closing statement, an amount charged; that is, an amount that the debited party must pay |
| escrow accounts | the trust account established by a broker under the provisions of the license law for the purpose of holding funds on behalf of the broker's principal or some other person until the consummation or termination of a transaction |
| escrow closing | an disinterested 3rd party is authorized to act as escrow agent (holder) and to coordinate the closing activities on behalf of the buyer and the seller |
| good faith estimate (GFE) | an estimate of all closing fees that must be provided to a borrower within 3 days of the loan application as required by RESPA |
| impound accounts | an account that most mortgage lenders require borrowers to have for funds to pay future real estate taxes and insurance premiums |
| mortgage disclosure improvement act (MDIA) | The timeliness of certain disclosures affects the date of closings. 3-7-3 |
| prepaid items | on a closing statement, items that have been paid in advance by the seller, such as insurance premiums and some real estate taxes, for which the seller must be reimbursed by the buyer |
| prorations | expenses, either prepaid or paid in arrears, that are divided or distributed between the buyer and the seller at the closing |
| real estate settlement procedures act (RESPA) | Federal law that requires certain disclosures to consumers about mortgage loan settlements. The law also prohibits the payment or receipt of kickbacks and certain kinds of referral fees |
| uniform settlement statement (HUD-1) | A special HUD form that itemizes all charges to be paid by a borrower and a seller in connection with the settlement. |
| 3-7-3 | 3 bus. days to provide TIL statement and GFE; 7 BD before signing loan docs after borrower receives final TIL and GFE; 3BD for closing if APR >.125% from original or most recent TIL and GFE, and 3BD before closing to provide consumer w copy of appraisal |
Created by:
ncoffill
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