Finance
Indiana's Secure and Fair Enforcement for Mortgage Licensing Act (SAFE Act) requires:
AAll Indiana real estate brokers to obtain a mortgage license
BMortgage loan originators (MLOs) to be licensed or registered and to meet minimum education, testing, and background check standards✓ Correct
CLenders to offer safe loans only to qualified borrowers
DBorrowers to pass a financial literacy test before obtaining a mortgage
Explanation
The SAFE Act establishes minimum standards for the licensing and registration of mortgage loan originators (MLOs) at both federal and state levels, including education, testing, background checks, and continuing education requirements.
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Key Terms to Know
Adjustable-Rate Mortgage (ARM)
A mortgage with an interest rate that changes periodically based on a financial index, usually after an initial fixed-rate period.
Loan-to-Value Ratio (LTV)The ratio of a mortgage loan amount to the appraised value or purchase price of a property, expressed as a percentage.
Discount PointsPrepaid interest paid to a lender at closing to reduce the mortgage interest rate, with each point equal to 1% of the loan amount.
Private Mortgage Insurance (PMI)Insurance required by lenders on conventional loans with less than 20% down payment, protecting the lender — not the borrower — against default.
State-Specific Concepts
Continuing Education
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