Finance
A New Mexico lender is subject to the Home Mortgage Disclosure Act (HMDA). HMDA requires lenders to:
AApprove all loan applications from protected classes
BCollect and report data on mortgage applications and loans, including applicant demographics and loan outcomes✓ Correct
COffer FHA loans to all applicants
DDisclose all closing costs within 3 days of application
Explanation
HMDA requires covered lenders to collect, report, and disclose data on mortgage applications — including applicant race, ethnicity, income, loan amount, and outcomes. This data helps regulators identify discriminatory lending patterns.
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Key Terms to Know
Closing Costs
Fees and expenses paid by the buyer and/or seller at the closing of a real estate transaction, in addition to the property's purchase price.
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.
Pre-ApprovalA lender's conditional commitment to loan a specific amount to a borrower, based on verified income, credit, and assets.
Math Concepts
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