Key Mortgage Closing Documents Flashcards

What does the Closing Disclosure replace under the TRID rule effective October 2015?

Answer: The HUD-1 Settlement Statement and final Truth in Lending disclosure

TRID combined the HUD-1 and final TIL into the Closing Disclosure for most residential mortgage loans.

On the Closing Disclosure, which page contains the loan terms summary including loan amount, interest rate, and monthly principal & interest?

Answer: Page 1

Page 1 of the Closing Disclosure contains the loan terms table with the key financial figures borrowers must review.

How many business days before consummation must a borrower receive the Closing Disclosure under TRID?

Answer: 3 business days

TRID requires the lender to provide the Closing Disclosure at least 3 business days before loan consummation.

The Promissory Note is primarily a(n):

Answer: Personal promise by the borrower to repay the debt

The Promissory Note is the borrower's written promise to repay the loan under stated terms, making it a personal debt obligation.

Which party signs the Promissory Note but typically does NOT sign the Deed of Trust on a purchase transaction?

Answer: A non-titled borrower who is financially obligated but not on title

A non-titled borrower signs the Note to be financially responsible for the debt but does not sign the Deed of Trust because they have no ownership interest in the property.

What is the purpose of the Initial Escrow Disclosure Statement at closing?

Answer: To itemize the projected monthly payments for taxes and insurance held in escrow

The Initial Escrow Disclosure shows the anticipated annual disbursements for property taxes and insurance and the resulting monthly escrow payment.

The Transfer of Servicing Disclosure informs the borrower that:

Answer: The lender has the right to transfer loan servicing to another company

RESPA requires lenders to disclose that the right to service the loan (collect payments) may be transferred to another servicer after closing.