Face-to-face closing

All parties to the transaction gather together to settle

Escrow closing

A neutral third party, or escrow agent, handles the exchange on the buyer's and seller's behalf

RESPA

Real Estate Settlement Procedures Act; protects consumers by providing full disclosure of settlement charges and prohibiting practices that increase settlement charges

TILA

Truth in Lending Act; requires lenders disclose to borrowers all finance charges and the true cost of obtaining credit

Loan Estimate

Given to buyers on or within three days of applying for a loan; lists the charges a buyer is likely to pay at settlement and discloses mortgage loan specifics, such as key features, costs, and risks

Closing Disclosure

Given to borrowers a minimum of three business days before closing on a mortgage loan; discloses transaction costs so consumers can compare final closing costs and terms to Loan Estimate

TRID

TILA and RESPA Integrated Disclosures; include Loan Estimate, which replaces the Good Faith Estimate, and Closing Disclosure, which replaces the HUD-1

Proration

A proportionate calculation used to determine who owes what portion of a given expense for a certain period of time

Accrued items

Expenses a seller owes at the day of closing but buyer will eventually pay, e.g., taxes on real property

Prepaid items

Items a seller paid in advance and that the buyer must reimburse, e.g., utilities

Short sale

Occurs when the market value of the property (and the eventual sale price) is less than the amount the borrower owes, plus closing costs

Foreclosure

The forced sale of a property due to a borrower defaulting on the mortgage loan