ALMOST DONE
Title I, Property Improvements
Loan insurance for moderate rehabilitation of properties without a purchase mortgage or refinance
579 or lower
Margo, a mother of three, is in the largest percentage of consumers with a score of _______. Margot's tried unsuccessfully to get approved for loans, but she was issued a credit card that included many extra fees and required deposits.
involuntary, specific
Mechanic's Lien, real property tax lien, special assessment loan
voluntary, specific
Mortgage lien
Mortgage compassion scam
Norman owns a home. He received an unsolicited call from a company offering to greatly reduce Norman's loan payments, for a hefty upfront fee. All they need to get started is the bank account information for the account Norman currently uses to make his payments. What might be going on here?
Length of credit history
Payment history, age of accounts, credit usage rate, inquiries, and _______ are factors considered in calculating a credit score.
Government-Sponsored Enterprises
Private companies such as Fannie Mae, Freddie Mac, Farmer Mac, and the Federal Home Loan Bank that were created by the U.S. Congress to make borrowing easier and more cost effective.
Federal Equal Credit Opportunity Act (ECOA) (1974)
Prohibits discriminatory practices by lenders
Title II Section 203(n)
Purchase of a unit in a cooperative housing project
Title II Section 203(b
Purchase of one- to four-family homes
Title II Section 223(e)
Purchase or rehabilitation of a home in an older, declining urban area
Hybrid REITs
REITs that invest in both properties and mortgages.
Mortgage REITs
REITs that invest in mortgages and mortgage backed securities
Equity REITs
REITs that invest money directly in properties
An advance
Regional State Bank is a member bank of the Federal Home Loan Bank. In exchange for mortgage collateral, Regional State Bank received a loan from the FHLB so it can make additional loans to consumers. What is the loan called that Regional State Bank received?
Administrative Procedures Act (1946)
Regulates agencies and their roles
Home Mortgage Disclosure Act (HMDA) (1975)
Requires documentation to show that lenders are serving the housing needs of their communities
Truth in Lending Act (TILA) (1968)
Requires full disclosure of the terms and conditions of credit
Secondary Mortgage Market
Secondary mortgage market players (Fannie Mae, Freddie Mac, Ginnie Mae, etc.) purchase loans from local lenders and package and sell them as mortgage-backed securities.
Collateralized Mortgage Obligations
Security made up of mortgages and/or mortgage-backed securities and organized into tranches (security classes).
American Recovery and Reinvestment Act (ARRA) (2009)
Stimulus package created as a response to the economic crisis
The state
The appraiser of Garran's property used the Torrens system to perform a title search. Now a claim has been filed. Who or which entity will be the title guarantor?
They should look for a home in a lower price range.
The house payment Tim and Vickie are considering would give them a housing ratio of 34% and a total debt obligation of 40%. Their credit score is 640. What do they need to change to meet the underwriting requirements for an FHA loan?
Primary Mortgage Market
These are the banks, credit unions, and mortgage companies that provide loans to consumers.
External obsolescence
This could happen if a factory were put in next door that changed and impacted property value.
Calculated Cash to Close
Under which section of the Loan Estimate will you find any credits provided by the seller?
Title II Section 203(h
Victims of disasters may receive 100% financing to reconstruct or replace a damaged home if they file within one year of the disaster.
Spend billions
What did the Troubled Asset Relief Program allow the U.S. Treasury to do in response to the 2007 financial crisis?
Principal only
What does the lump sum payment at the end of an interest-only mortgage loan consist of?
It provides the lender with an accurate opinion of the property's market value.
What is the purpose of the Uniform Residential Appraisal Report?
To notify the borrower that the loan is being resold on the secondary market, and how and where to make future payments
What is the purpose of the loan transfer disclosure?
Reverse annuity mortgage
borrower receives monthly payments, or a lump-sum payment in exchange for ownership of the property. If the loan is not repaid, the bank owns the property.
involuntary, general
income tax lien, deceased persons debt, estate and inheritance tax lien
involuntary, general, and equitable
judgement lien
Wrap-around loans
junior financing instruments that "wrap around" existing debt
Title I, Purchase of Manufactured Housing
Loan insurance for purchase of a manufactured house on a developed lot, to develop a lot for a manufactured home, or both.
Loan Estimate
Loan terms, Projected payments, Costs at closing Closing cost details (loan costs, taxes, prepaids, escrow), Comparison information and other considerations
Conforming Loans
Meet all qualifying guidelines set by Fannie Mae and Freddie Mac, which include:
A short-term lake rental
What type of property is Aileen appraising if she's using the income approach?
A single-family residence built six years ago
What type of property is Valerie appraising if she's using the sales comparison approach?
Fees charged by a lender for processing or originating a loan
What's a loan origination fee?
Amount being borrowed compared to the value of a property (either the appraised value or sales price, whichever is less)
What's a loan-to-value (LTV) ratio?
All recurring (or installment) debt that will last longer than 10 months, such as monthly mortgage, car, credit, and loan payments
What's included in a total debt ratio (a.k.a., debt-to-income ratio, total obligation, back-end ratio)?
Monthly housing obligation, (principal, interest, taxes, insurance), homeowners or condo association fees
What's included in the housing ratio (a.k.a., front-end ratio)?
Recasting
What's the term for a loan modification in which the outstanding loan balance is reconfigured?
Strengthen the housing market to bolster the economy and protect consumers.
When HUD pursues actions that are designed to restore the financial health of the Federal Housing Administration, which of its goals is it supporting?
The state
When the Torrens system is used to perform a title search, who acts as title guarantor in case a claim is filed?
Prime rate
Which interest rate do banks use to offer consumer loans?
It's a specific involuntary lien.
Which of the following describes a mechanic's lien?
Liability After Foreclosure
Which of the following is part of the Other Disclosures section?
The funds are often used for home renovations or to fund a college education.
Which of these best describes a home equity loan?
Home equity loan
lump-sum loan based on accrued equity
Construction loan
open ended; funds are withdrawn at specific construction phases; usually converted to long-term financing when construction is complete.
Home Equity Line of Credit
open-ended loan based on equity, revolving line of credit for a specified number of years
Federal Reserve System
12 reserve district banks, each managed by a board of directors. Board of Governors, seven members appointed by president and confirmed by Senate
Credit union
A bank-like money cooperative where its members can borrow from pooled deposits at low interest rates.
junior lien on the property.
A homeowner has been paying her mortgage for several years and has built up equity. She decides to take out a home equity line of credit because she needs some cash. This credit will create A
New loan
A refinance is always a ______.
Federal Home Loan Bank
Advances (or loans) its member banks money in exchange for collateral (usually mortgages)
Pay loan-related closing costs
Besides interest paid over the life of the loan, what responsibility does the buyer have to the lender in a real estate transaction that requires financing?
General and specific
Boris is an appraiser working for the Smith family. They've hired him to perform an appraisal on their six-bedroom house. What two types of data will Boris gather?
Promissory Note
Borrower's promise to repay, Includes amount of principal, interest rate, schedule of repayment, borrower's signature, date of signing
Fannie Mae
Can purchase any type of loan, but primarily deals with conventional loans from commercial banks
Freddie Mac
Can purchase any type of loan, but primarily deals with conventional loans from thrifts
That the borrower and seller names, the property address, and the sales price are accurate and spelled correctly
Cassie is helping her buyer client, Gus, prepare for closing. What should she encourage him to verify as soon as he receives the form?
Cheyenne will pay less in capital gains taxes by receiving the proceeds from the sale over time, rather than in a lump sum.
Cheyenne is selling the family farm via an installment contract. What is one advantage of selling the farm this way?
FHA, VA, or conventional
Commander Halfback retires after 25 years of service in the Coast Guard. He is looking to buy a home. What type of loan should he use?
740-799
Consumers in the _______ range have an above-average credit score. They tend to qualify for better interest rates than those in the "acceptable" category.
Community Reinvestment Act (CRA)(1977)
Created in response to the practice of redlining
Dodd-Frank Wall Street Reform and Consumer Protection Act (2010)
Creates stricter regulation of financial services industry
Title II, Section 203(n)
Dana and Phil have evaluated their situation, and have decided to purchase a unit in a cooperative housing project. Which FHA loan program might work for them?
Housing and Economic Recovery Act (HERA) (2008)
Designed to address the subprime mortgage crisis. Provisions included the SAFE Mortgage Licensing Act and the Mortgage Disclosure Improvement Act
Yes, for Native Americans on trust lands
Does the VA make direct loans?
Real Estate Settlement Procedures Act (RESPA) (1974)
Eliminates kickbacks and referral fees among settlement service providers
Loan amount, down payment requirement, loan-to-value ratio, and housing debt-to-income ratio
Freddie Mac and Fannie Mae set guidelines for conforming loans. Which of these are qualifying guidelines?
Ginnie Mae
Guarantees MBSs that contain loans insured or guaranteed by a U.S. government agency
(Amount financed / property value) x 100
How do you calculate LTV?
Loan amount x origination rate (divide a percentage by 100 to obtain the rate, so an origination fee of 2% is the same as 0.02)
How do you calculate a loan origination fee?
([Principal + interest + taxes + insurance + association fees] / monthly gross income) x 100
How do you calculate the housing ratio?
(Total of monthly debt obligations / monthly gross income) x 100
How do you calculate total debt ratio?
A neutral third party
In a deed of trust, who is the trustee?
A transfer between parent and child
In which of the following situations is a lender prohibited from enforcing an alienation clause?
Recovery
In which phase of the real estate market cycle would you expect to see property under valued and a large supply of homes on the market?
Partnership among mortgagees
In which type of partnership does each mortgagee receive a share of the mortgage payment?
Closing Disclosure
Loan terms, Projected payments, Costs at closing, Closing cost details & totals, Comparison of amounts on Loan Estimate with Closing Disclosure, Summary of borrow- er/seller transaction details, Additional loan disclosures, Loan calculations, Contact information
Maggie will take over Jim's loan payments without telling his lender she's doing so.
Maggie has a neighbor, Jim, who is facing foreclosure. She likes Jim and wants to help him out, so they agree to do a "subject to" purchase. What does this mean?
Involuntary, general
Susan's cat bit and scratched her neighbor, who's suing Susan. The lawsuit resulted in a judgment against her. Susan does not want to pay the neighbor according to the judgment, so the court placed a lien against her property. How is this lien classified?
Home Affordable Refinance Program (HARP
Which of the following programs broke the normal 80/20 ratio rule usually required as a loan-to-value and offered favorable interest rates?
Moratorium (or forbearance)
Which term describes a lender temporarily agreeing to suspend payments to help the borrower get caught up?
Mortgage REIT
Which type of real estate investment trust derives a portion of its income from interest dividends?
Through a funding fee charged to most borrowers
How does the VA fund the mortgage guarantee program so that lenders can be reimbursed for any losses from borrower default?