17 Practice Questions
Which of the following is an example of a loan that originated in the primary mortgage market? ABC Bank loan Fannie Mae loan Freddie Mac loan Ginnie Mac loan
ABC Bank loan
How does a lender in the primary mortgage market earn money when a loan is originated? By charging loan origination fees By preparing tax records By purchasing loans By setting interest rates
By charging loan origination fees
Fannie Mae, Freddie Mac, and the Federal Home Loan Bank are regulated by the ______. Federal Banking Institute Federal Housing Finance Agency Federal Reserve U.S. Congress
Federal Housing Finance Agency
How do the primary and secondary mortgage markets work together? The primary market packages loans to sell to the secondary market. The primary market regulates the secondary market. The secondary market packages loans to sell to the primary market. The secondary market regulates the primary market.
The primary market packages loans to sell to the secondary market.
If Acme Bank, a primary lender, wants to sell its loans on the secondary market, it would be easier for it to do so if its loans meet ______. Fannie Mae and Freddie Mac guidelines FDIC guidelines FHA guidelines VA guidelines
Fannie Mae and Freddie Mac guidelines
What could be a consequence if there were no secondary mortgage market? Interest rates would fall. Lenders might not have funds available to make new loans to the public. There wouldn't be any institutions available to service loans. Unemployment would rise.
Lenders might not have funds available to make new loans to the public.
The primary mortgage market operates to _____. Avoid inflation Create favorable economic conditions Originate loans Service loans
Originate loans
Commercial lenders operate in the _____mortgage market, making loans directly to consumers. Government Primary Secondary Sub-prime
Primary
In which market do lenders that originate real estate loans operate? Government market Primary mortgage market Real estate investment trust market Secondary mortgage market
Primary mortgage market
The secondary mortgage market serves a very important role in real estate finance. Which of these statements best describes that role? The secondary market funds junior mortgages. The secondary market makes loans to less creditworthy consumers. The secondary market purchases loans from primary lenders and helps keep credit available to loan originators. The secondary market regulates lenders in the primary market.
The secondary market purchases loans from primary lenders and helps keep credit available to loan originators.
