Random Payment Verification
A method of securely verifying the ownership of an external bank account, ensuring safe funds transfers between two accounts held at different banks. The process requires the account holder to verify the arrival of two small payments or deposits-usually under a dollar each-to an external account before transfers are permitted. Random payment verification may also be used as an extra security measure when a new bank account is opened.
Rate lock
See Interest rate lock.
Real Estate Settlement Procedures Act (RESPA)
The Real Estate Settlement Procedures Act (RESPA) is a federal consumer protection law. It aims to prevent abuses in the loan closing, or settlement, procedures for residential mortgage loan transactions. RESPA requires the lender to provide a series of disclosures that begins when the borrower applies for a loan, including a Good Faith Estimate. RESPA also requires the lender to notify the borrower if it transfers the loan servicing rights to another company, and to send a yearly statement to the borrower that summarizes annual escrow deposits and payments.
Recording fee
A fee you pay for recording a transaction and a transfer of title at a records office. This kind of fee is usually included in closing costs.
Refinancing
Refinancing is a means of replacing a current home loan with one that has a lower interest rate, lowering monthly payments and the total paid for a home. Refinancing can also be used to switch from an adjustable-rate loan (ARM) to a fixed-rate loan, or to get "cash out" if you have sufficient equity in your home. A cash-out refinancing is one that involves you paying off your current loan and borrowing an additional amount, based on your home's current value.
Regulation B
Regulation B prohibits discrimination in any aspect of a credit transaction on the basis of national origin, marital status, religion, gender, color, age, race, receipt of public assistance funds and exercise of any right under the Consumer Credit Protection Act.
Regulation C
Regulation C requires mortgage lenders in metropolitan areas to publicly disclose data about home purchase and home improvement loans (including refinances) that lenders originate or purchase, and about the disposition of applications for such loans. Lenders collect and report data about each application or loan, each applicant or borrower (including national origin or race, gender, and annual income), and each property (including occupancy status and location).
Regulation Z
Regulation Z, also known as Truth In Lending, promotes the informed use of consumer credit by requiring disclosures about its terms and costs. The regulation also gives consumers the right to cancel certain credit transactions that involve a lien on a principal dwelling, regulates certain credit card practices, and provides a means for fair and timely resolution of credit billing disputes.
Return
The profit earned on an interest bearing account, expressed as an Annual Percentage Yield.
Reverse mortgage
Reverse mortgages enable older homeowners (usually 62+ years) to borrow from the equity in their homes. The loan proceeds are paid from a lender to the homeowner and may be in the form of a lump-sum payment, monthly payments, or cash withdrawals. The borrowers continue to live in and own their home, even if one of the co-borrowers passes away. Unlike other types of home equity-based loans, monthly mortgage payments are not required. The borrower is required to continue paying property taxes and homeowners insurance, and maintaining the home's condition. The loan does not have to be repaid until the last remaining borrower permanently leaves or sells the home. Repayment is usually done through the sale of the house or other estate assets.
Revolving credit
Revolving credit is a type of open-end credit commonly associated with credit cards. Open-end credit allows customers to borrow funds from the loan as long as it does not exceed their credit limit. In some cases, lenders require minimum repayments, usually on a monthly basis.
Right of rescission
Sometimes described as a "cooling off period," this describes a consumer's right under federal law to cancel a home equity loan or line of credit with a new lender, or to cancel a refinance transaction done with another lender other than the current mortgagee within three days of closing. A right of rescission does not exist for all mortgage loans, so ask your Mortgage Consultant for details.
