Loan Application. A sample Home Loan Application form is located at the end of this Chapter. If an application for a residential real estate loan is declined, a Statement of Reasons for Adverse Action on a Loan Application must be furnished to the applicant under Reg B.
Texas Mortgage Fraud Notice. Mortgage fraud is committed if a person intentionally or knowingly makes a materially false or misleading written statement to obtain a mortgage loan. Examples of criminal mortgage fraud include, but are not limited to, illegally inflating property appraisals; concealing a second mortgage from a primary lender, and concealing or stealing a borrower’s identity. The Texas Finance Code requires the bank to give a notice of penalties for making false or misleading written statements [TFC343.105] (For Owner Occupied, 1-4 Family Residence only). A form is included at the end of this Chapter.
Earnest Money Contract or Purchase Contract. The Texas Real Estate Commission One to Four Family Residential Contract (Resale) form is located at the end of this Chapter.
TILA-RESPA Loan Estimate must be delivered or mailed no later than three (3) days after the loan application is received. See form at the end of Chapter 13.
Home Loan Toolkit (an information booklet entitled “Your Home Loan Toolkit: A Step-by-Step Guide”) published by the Consumer Finance Protection Bureau must be delivered or mailed no later than three (3) days after the loan application is received. It provides information regarding the process of obtaining a home loan including certain fees and services.
ARM Disclosures. When the lender is a national bank and the loan is purchase money or refinancing of purchase money on a principal swelling, additional adjustable rate mortgage (ARM) disclosures are necessary if the interest rate on a loan (with a term longer than one year) will change before the note matures, including floating rate loans or there is a balloon principal payment. [12 C.F.R. 1026.17.] The Bank must provide:
o The Consumer Handbook on Adjustable Rate Mortgages published by the Consumer Financing Protection Bureau; and
o Loan program disclosures that describe each of the Bank’s ARM programs.
TILA-RESPA Closing Disclosures. See form at the end of Chapter 13.
Promissory Note. The note may accrue interest at either a fixed rate or an adjustable rate. An adjustable rate mortgage can be tied to a variety of indices.
Deed. This will be prepared by the seller or its counsel.
Deed of Trust, with a proper legal description of the property filed in the Real Property Records in the county where the property is located.
Lien Search, which is provided by the Title Policy Commitment.
Title Policy. Title insurance should always be required when the real property is being purchased with the loan proceeds. See “Surveys, Title Commitments and Title Insurance”, Chapter 4.
Appraisal or evaluation and notices regarding the applicants right to receive a copy.
Multi-peril Hazard Insurance with Bank as loss payee.
Flood Hazard Determination, Notice to Borrower of Property in Special Flood Hazard Area and Flood Insurance, when required. See Chapter 6, “Flood Insurance”.