General Mortgage Knowledge - 2.0
request modification of the terms of the loan when it reaches maturity.
A balloon mortgage that includes a conditional refinance provision allow the borrower to
periodic cap
A limit on the amount by which the payment can change on any adjustable date from the current or previous payment amount on an ARM
hybrid ARM
A loan with a fixed period at the start that will adjust regularly after a certain period is commonly referred to as an
bridge loan
A loan with the term of less than one year that is related to a purchase or a construction of a home is known as a _____
loan modification
A permanent change to an existing loan.
table funding
A wholesale lending arrangement that permits a mortgage broker to originate, close and fund a loan using a warehouse line of credit is called
FHA total scorecard
AUS for FHA
limited
Advantages of VA loans include; 100% financing, no prepayment penalties, more lenient UW, and ___________ closing costs.
credit report and appraisal
Although no longer permitted in the mortgage marketplace due to new requirements for the assessment of repayment ability of borrowers, a "no-doc" loan historically required what documentation for loan approval?
Non QM loans
Analysis of borrower's repayment ability is still required on ___________
FHFA (Federal Housing Finance Agency
As a result of the Housing and Economic Recovery Act of 2008, Congress created __________ for oversight of the GSEs.
tax returns and in some cases business returns from the past two years
Borrowers that own more than 25 percent of a business is considered to be self employed and must provide
gross up income by 25 percent (multiply by .125)
Borrowers who earn non-taxed income (ssI, disability, etc.) are permitted to
limit the amount an interest rate or payment can adjust during any one adjustment period or over the lifetime of the loan
Caps on ARMS ______
Fannie and Freddie
Conforming loans must meet _________ requirements
fixed rate, term doesn't exceed 30 years and down payment of 3%
Conventional 97% loans must
33 and 38
Direct RHS loans may have terms of _ years
DO NOT
Do VA loans require a down payment?
arm is locked for three years then adjusts annually each year after
Explain the feature of an arm, for example 3/1
580
FHA FICO for 3.5 percent down
Mutual Mortgage Insurance Fund
FHA funds are held in
15 and 30 year
FHA loan terms
interest is calculated and added to the loan balance
HECM interest rates, borrowers don't make regular interest payment but rather ____
two appraisals with minimal exemptions
HPML require
APR , points and fees, and pre payment penalties
High Cost Mortgage loans (HOEPA loans) must meet at least one of the three thresholds
HOEPA loans - section 32 of TILA
High cost mortgage loans are known as
1.5, 2.5, or 3.5 depending on the transaction
High price mortgage loans are close ended loans secured by a principal dwelling and where the APR exceeds the APOR by
HUD establishes loan limits for FHA based on county by county limits.
How are FHA loan limits established?
HUD establishes loan limits for FHA loans based on county-by-county limits
How are FHA loan limits established?
2 year of tax returns
If borrower earned more than 25% of income from commission, they must provide
borrower
In lien theory states the _______ holds the tile to the home securing the mortgage, and when the loan is paid in full, the lien on the home is released.
three
In order for a small creditor to originate a ballon payment qualified mortgage, the small creditor must hold the loan in it's portfolio for ____ years
fully indexed rate
In the absence of caps, adjustments on an ARM loan would be determined solely by
$484,350
Jumbo limit for 1 unit properties was $453,100 but is now___________.
upfront 1% and annual fee is .35%
List the guarantee fees for RD loans
non-conforming
Loans that do not meet guidelines established by Fannie Mae and Freddie Mac are known as
Mortgage Insurance Premium
MIP stands for
balloon payment qualified mortgage
QM mortgage can't include a balloon payment unless it's a
housing expense ratio and total debt ratio
Qualifying ratios consist of
housing expense ratios and total debt ratios
Qualifying ratios consist of what two separate calculations?
US government
RHS direct is funded by
private lenders
RHS guaranteed loans are funded by
6 percent
Seller concessions are limited to _______ of sales price.
pay stubs most recent 30 days and W2 most recent 2 year period
Standard income salaried and hourly borrowers include
foreclosure
The Federal Housing Administration does not make loans; it insures loans. What does the FHA insure against?
30 year mortgage
The SAFE act defines a "nontraditional mortgage product" as any loan other than _____
Examines whether the collateral and applicant meet lender guidelines
The UW process _________
scrutinization
The ____ process allows lenders to transfer active loans to another entity in exchange for funds to make more loans.
total monthly debts (including housing expenses plus other debts) to monthly gross income
The back-end ratio compares
promissory note
The lending document that contains the contractual terms for repaying a home loan is the
conditional refinance provision
The risk of a balloon mortgage may be minimized by including a
Interest Rate Reduction Refinance
The term IRRRL refers to __________
1.75 percent of the loan amount.
UFMIP for FHA loans is
safe harbor qualified mortgages
VA guaranteed or insured loans that are made in compliance with VA standards are ________
15, 20, 25, and 30
VA loan terms
assumable
VA loans are
tax lien
What information, if found during a title search, is likely to prevent the completion of a transaction to refinance a first mortgage?
to help borrowers purchase homes if they do not have a significant down payment
What is the purpose for PMI?
after the first three years of the loan term
When a fixed rate qualified mortgage included a prepayment penalty, that penalty may not be charged
6%
When the borrower makes a down payment between 10% and 24.9% on a Conventional, Conforming loan, what is the most a seller can contribute?
mortgage
Which document connects the promissory note to the collateral?
VA
Which loan program considers residual income in qualification
single purpose mortgage
Which reverse mortgage is the least expensive type?
High Price Mortgage Insurance
Which transactions do not have Home Counseling requirements
the United States government
Who funds direct VA loans
adjustment frequency
_____ establishes how often an adjustment to the interest rate can occur.
residual income analysis
_____ is used to determine whether the veteran has adequate monthly residual income to meet living expenses after established monthly expenses.
IRRRLS
______ does not automatically have conclusive presumption of compliance
high cost mortgage under HOEPA
________ can't be a balloon payment
Note or Promissory Note
____________ is the borrower's promise to repay the loan.
negative amortization
____________ occurs when the mortgage payment is not sufficient to pay the interest currently due.
ballon mortgage
a ________ loan amortizes over a set period of time and matures at an earlier date.
seller carry back
a transaction in which the seller provides all or most of the financing
direct is 33 and 38, and guaranteed is 30 years
all RD loan terms
prepayment penalty
charge paid by the borrower when repaying loan principal earlier than required by the amortization schedule.
encumbrance
claim against a property that can affect the ability to transfer title.
620
conventional FICO
higher interest rate
creditors pass on a loan level price adjustment to consumers in the form of a
margin
fixed number not subject to change during the term of the loan
power of sale clause
foreclosure is the sale of a property after a borrower's defaults on payments. What is the exact procedure the lender follows in order to foreclose is dependent on the absents or presence of _____
1.25%
funding fee for subsequent users who are making a down payment of 10% or higher
2.15
funding fee percent for first time users who aren't making a down payment
1.5
funding fee percent for first users making a down payment between 5% and less than 10%
3.3
funding fee percent for subsequent users with no down payment
the lender must manually UW
if you get a "refer" on your FHA scorecard
earnest money
money paid by the buyer to the seller at the time of entering into a contract to indicate intent and ability to carry out the contract is called
85%
on a HELOC, the borrower can get up to _______ of the appraised value of the home minus the amount owed on any first mortgage.
occupancy fraud
one of the most common forms of mortgage fraud is
lifetime rate caps
the amount by which an interest rate change over the loan term
entitlement
the amount the government will guarantee to a lender is known as the veterans
rate ceiling
the lifetime cap is also known as the
lifetime rate cap
the rate ceiling is also known as
index
the starting point
default
the upfront guarantee fee on an RD loan serves in the event of
single purpose, HECM, and proprietary mortgage
three types of reverse mortgages
41%
total DTI or back end DTI for VA loans