Finance
The Home Mortgage Disclosure Act (HMDA) requires lenders to:
ADisclose the APR on all loans
BCollect and report data on mortgage loan applications and originations to detect discriminatory patterns✓ Correct
CProvide a Loan Estimate within 3 days
DPay a HUD fee for each loan closed
Explanation
HMDA requires lenders to collect and publicly report data on mortgage applications, originations, and purchases to help identify potential discriminatory lending patterns.
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Key Terms to Know
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.
AmortizationThe gradual repayment of a loan through scheduled periodic payments that cover both principal and interest.
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