Primary & Secondary Markets/Financing Concepts - 5

When a buyer takes over the seller's original loan with the lender's permission, this is called ______.

An assumption

Mary is assuming Tom's loan. She wants to be sure she has an accurate loan payoff amount. What document will the lender prepare for her?

An estoppel certificate

Which of these items is a demand deposit?

Checking account

Private loan companies may charge higher interest, larger fees, and could require ______ to secure a loan.

Collateral

Which of the following is a form of commercial bank revenue related to mortgage financing?

Demand deposits

Which of the following acronyms is used to represent Fannie Mae?

FNMA

Which institution was created as the Federal National Mortgage Association in 1938?

Fannie Mae

The Government National Mortgage Corporation was created in 1968 under the Department of Housing and Urban Development (HUD) and is more commonly known as ______.

Ginnie Mae

Which institution guarantees mortgage-backed securities with the full faith and credit of the United States?

Ginnie Mae

Construction loans are a type of ______ financing.

Interim

Which of the following statements about Freddie Mac is correct?

It sells participation certificates to investors to raise funds to purchase additional loans from lenders.

Freddie Mac's mission is to provide ______, stability, and affordability in the U.S. housing market.

Liquidity

Life insurance companies are more concerned with long-term stability of investments than they are ___________.

Liquidity

What does NCUA stand for?

National Credit Union Administration

While Fannie Mae considers total and housing debt-to-income ratios in its underwriting process, Freddie Mac considers ______.

Only total debt-to-income

Several actions take place on the secondary mortgage market. Which of these is a common activity?

Packaging loans into mortgage-backed securities

A ______ is a mortgage-backed security issued by Freddie Mac.

Participation certificate

Institutions that purchase loans, package them into mortgage-backed securities, then sell these to investors may commonly be referred to as ______.

Secondary market players

Which of the following types of residential dwellings do life insurance companies purchase from the secondary mortgage market?

Single-family on one lot

Which statement most accurately describes the role and function of Ginnie Mae in the secondary mortgage market?

Ginnie Mae insures MBSs made up of government-insured or -guaranteed loans.

If Freddie Mac didn't exist, which of the following would be a likely effect?

A decrease in the amount of credit available to loan originators

Vantagestar Ltd. would like to construct a high-end condominium complex. Where will they likely go for financing this project?

A life insurance company

The secondary mortgage market buys loans from the primary market. How does this aid the lending market?

Ensure funds are available to borrowers

Which of the following loan types can be packaged into a mortgage-backed security eligible for guarantee by Ginnie Mae?

Loans insured or guaranteed by U.S. government agencies

What are the types of institutions that issue loans directly to consumers commonly called?

Primary market players