Chapter 6.8 National Finance

The Federal National Mortgage Association is authorized to purchase which of the following types of mortgage loans? FHA only VA only FHA and VA, but not conforming conventional FHA , VA, and conventional

FHA and VA, but not conforming conventional

Which of the following secondary market organizations is a quasi-government corporation? Fannie Mae (FNMA) Maggie Mae (MGIC) Freddie Mac (FHLMC) Ginnie Mae (GNMA)

Fannie Mae (FNMA)

Which of the following is considered a part of the secondary mortgage market? Mutual Savings Bank Assoc. (MSBA) Federal Reserve Board (FED) American Credit Union Board (ACUB) Federal Home Loan Mortgage Corporation (FHLMC)

Federal Home Loan Mortgage Corporation (FHLMC)

Which is not an agency that deals (buys loans) in the secondary market? Government National Mortgage Association Federal Home Loan Mortgage Corporation Federal Housing Administration Federal National Mortgage Association

Federal Housing Administration

An increase in the availability of money would lead to which effects? Interest rates would go up Interest rates would go down Interest rates would NOT be affected due to RESPA guidelines. Interest rates would not be affected due to Truth in Lending laws.

Interest rates would go down

All of the following were originally established to buy and sell mortgages in order to stimulate mortgage lending, except Fannie Mae (FNMA). Maggie Mae (MGIC). Freddie Mac (FHLMC). Ginnie Mae (GNMA).

Maggie Mae (MGIC).

The primary distinction/s between the primary and secondary mortgage market is? The primary market is not active in the origination of mortgage loans. The secondary market is fundamentally a holding or warehousing process. The homebuyers can get a mortgage from both primary and secondary markets. Only lenders can get loans in the primary market.

The secondary market is fundamentally a holding or warehousing process.

A commercial bank would usually make all of the following loans EXCEPT, construction. home improvement loans. loans for a mobile home. a pension fund loan.

a pension fund loan.

The Federal National Mortgage Association (FNMA) sells seasoned mortgages and deeds of trust to individual investors and financial institutions. A seasoned mortgage is one that has been in existence for some time and has a good record of repayment by the mortgagor. in existence for some time and has a good record of repayment by the mortgagee. in existence for more than ten years and has a fair record of repayment by the mortgagor. in existence for some time and has been certified by the FDIC.

in existence for some time and has a good record of repayment by the mortgagor.

A mortgage in which the lender participates in the income of the mortgaged property beyond a fixed return is called participation financing. coop-purchase money mortgaging (CMM). wraparound financing. co-underwriting mortgage partnering.

participation financing.

As a group, the three secondary mortgage market participants; Fannie Mae, Ginnie Mae and Freddie Mac insure mortgage loans originated by primary market lenders. regulate the low cost housing market. provide an outlet for primary lenders to sell their mortgage loans. guarantee any losses suffered by primary lenders.

provide an outlet for primary lenders to sell their mortgage loans.

The primary purpose of the secondary mortgage market is to improve employment in the construction industry. provide low cost mortgages to consumers. provide liquidity (funds) for the primary market. regulate the interest rates on residential mortgages.

provide liquidity (funds) for the primary market.

The Federal Reserve controls the money supply by maintaining a fund from which member banks may borrow. requiring how much of a bank's assets have to be on reserve. lending money to qualified customers. setting the maximum interest rate that can be charged.

requiring how much of a bank's assets have to be on reserve.