Closing and Settlement Procedures Flashcards
6 cards from real CMA practice questions. Tap to flip, then mark Knew It or Still Learning — missed cards come back until you master them.
Read the first 6 Closing and Settlement Procedures flashcards as text
What federal law requires lenders to provide borrowers with a Closing Disclosure at least three business days before loan consummation?
Answer: TILA-RESPA Integrated Disclosure (TRID) rule
The TRID rule, effective October 2015, mandates lenders deliver the Closing Disclosure a minimum of three business days before closing.
Which document at closing replaces the old HUD-1 Settlement Statement for most mortgage transactions?
Answer: Closing Disclosure (CD)
The Closing Disclosure replaced the HUD-1 Settlement Statement under TRID for most closed-end consumer mortgage transactions.
What is the primary role of a title company during a mortgage closing?
Answer: Ensure clear title transfer and disburse closing funds
Title companies perform title searches, issue title insurance, and manage the escrow and disbursement of funds at closing.
Which closing cost item represents prepaid interest from the closing date to the end of the month?
Answer: Per diem interest
Per diem (daily) interest covers the interest that accrues between the loan closing date and the first day of the following month.
When a borrower has the right of rescission under TILA, how many business days do they have to cancel a refinance transaction on their primary residence?
Answer: 3 business days
Under TILA, borrowers have a three-business-day right of rescission on refinance transactions secured by their primary residence.
What does a title insurance lender's policy protect?
Answer: The lender's interest against title defects up to the loan amount
A lender's title insurance policy protects the lender's financial interest in the property against title defects up to the outstanding loan balance.