Fl broker - post Ed/30 hr #1
How much can a family member give as a gift for the buyer
$15,000 to each buyer
What is covered in 22 in a mortgage
-Lenders right to call loan due if borrower defaults -Lender has right to cure & reinstate loan -Lenders right to sell prop if default
Hecm facts
-There are no income qualification requirements -FHA covers any negative balance after the sale of the home -Will continue to receive payments as long as they remain in home -No repayment requirement until they no longer live in home
When is VA funding fee waived
-Veterans receive compensation for service connected disability's -Spouses of veteran who died in service -Large down payment
The interest rate reduction finance loan program (Irrr)
0.5 funding fee, no appraisal, no income or employment verification, no COe
What is paragraph 10 of the promissory note
10
How many districts comprise the federal reserve
12
What paragraph on the promissory note describes the schedule of repayment and monthly payment amounts
3
VA DTI Ratio
41%
Which paragraph includes late charges on the promissory note
6
Deed in Lieu
A deed given to the lender to avoid foreclosure and fulfill the obligation to repay the debt; this process does not allow the borrower to remain in the house but helps avoid the costs, time, and effort associated with foreclosure.
convertible feature in arm
Allows borrowers to convert loan to a fixed rate during a specific period
If fed increases the percentage member banks must keep on reserve, what happens:
Banks have less money to use as loans Local economy slows down bc less money is available
NADL Program-Native American direct loan program
Can purchase land by the federal government on behalf of the Native American tribe . the land is reserved for the tribes use -VA is actually lending the money
CRV
Certificate of Reasonable Value- from appraisal Shelf life of 12 months
Bluewater navy Vietnam veterans act
Changed lending guidelines and funding fee requirements through 2022
Straw Buyers - nominee loans
Conceal buyers identity by using another person's name in Credit infomation
If there is a house in crisis what action with the federal reserve take?
Decrease rates
TILA
Effective 1968 Regulates advertising of credit services Requires full disclosure of key information including APR
A veteran must receive a certificate of released to be fully discharge from VA loan applications - true or false
False
Lenders mayadjust the rates at any time interest rates rise - true or false
False
The borrower who assumes a VA loan must also be a veteran - true or false
False
Which entitgeneral acts in the secondary market?
Fannie mae
Federal Open Market Committee (FOMC)
Federal Reserve committee that makes key decisions about interest rates and the growth of the United States money supply
Which act was enacted in 1968 as part of the consumer credit protection act
Federal equal credit opportunity act
harp
Home affordable refinance program/ Loan Program that broke the 80/20 ratio rule usually required as a loan to value and offered favorable interest rates
What happens when the Fed purchases government SECURITIes
Increases The influx of money and stimulates growth
interest rate
Index + margin
Title 2- fha
Insurance for the purchase of resid homes
Title I - fha
Insures for Property improvements Manufactured homes
FHA (Federal Housing Administration)
Insures loans. Established in 1934
What is par 2 of promissory note?
Interest
federal funds rate
Interest rate banks charge each other for loans- usually overnight loans
What is another name for installment sale contract
Land contract
What is paragraph five of the promissory note
Loan charges
ARM- asjustble rate mtg
Loan where interest rate is based on the economic index - consumer price index or US treasury rate
What are advances
Loans the federal home loan bank makes two member banks.
What is a non-recourse loan?
Loans with no personal liability for repayment.
Does a widow of an army corporal who died in service have a funding fee
No
If VA applicant pits more than 20% down, does applicant pay funding fee?
No
Is a jumbo loan conforming?
No
VA Funding Fee
One-time, upfront charge to the veteran receiving a VA loan ff could be reduced if the veteran provides a down payment and could be waived completely if veteran has 10% or higher VA disability. Can be included in the loan
robosigning
Pushing properties through the foreclosure process without closely reviewing the docs
What is the Truth in Lending Act?
Requires lenders to disclose financing terms
Loan that's offered based on home owners equity in which funds are drawn overtime and the bank gains corresponding property ownership
Reverse annuity mortgage RAM
A HECM is what type of fha loan: (Home equity conversion loan)
Reverse loans
With VA loan which Closing cost is paid by the seller
Termite report, broker fees Other costs can be negotiated
prime rate
Thanks use the federal funds rate or discount rate to borrow money from the Fed. Most banks add a percentage to that rate. this is called the prime rate
discount rate
The interest rate on the loans that the Fed makes to banks
What happens when a promissory note is sold
The promissory note is endorse to the new owner of the long
What is a potential causes for a decrease in local economy driven by the Fed
The reserve percentage is increased by the Fed
What is loan processing step of financing?
The step that determines whether or not applicant will get the loan they requested
Novation
The substitution, by agreement, of a new contract for an old one, with the rights under the old one being terminated.
An ARM will have a below market rate for the first year of the loan - true or false
True
The note converts the interest rate in the arm from fixed to adjustable.true or false
True
How much can a veteran ask for seller closing cost concessions
Up to 4%
What is a deed of trust?
Used to secure a note. A deed can carry a rider or an addendum
What is restored and partial entitlement - VA loan
Veteran has used the loan and paid it off can borrow again -If loan has not been completely paid off they may be entitled to a partial entitlement Can purchase a second home if loan has been paid
Equity Skimming
When an investor receives title to a property— often by using a straw buyer—doesn't make the mortgage payments, and usually rents out the home until foreclosure occurs.
Disintermediation
When more funds are withdrawn from financial institutions then are deposited Means banks have less money to lend to others Less credit means less spending causing a slow down in the economy
Are VA loans assumable?
Yes - because they do not have due-on-sale clauses • VA loans made prior to March 1, 1988 are assumable without the credit check of the new mortgagor • for VA loans made on or after March 1, 1988, the buyer must qualify
What happens when a mortgage lender denies a loan?
You can apply with a different lender.
RESPA (Real Estate Settlement Procedures Act)
a law requiring full disclosure of closing costs to buyer and seller. Enacted 1974 Loan estimate, closing disclosure, initial escrow statement and annual escrow statement. Include provisions for buyers who are victims of overcharging
discount window
a protection against bank runs in which the Federal Reserve stands ready to lend money to banks in trouble.
What is the borrowers statutory right of redemption
allows a borrowers to reclaim their homes after a foreclosure, but only until a certain point. In a statutory right of redemption, the borrower must pay the foreclosure sale price to reclaim their home.
Hypothecation
the action of pledging real property as security for a debt
open market operations
the buying and selling of government securities to alter the supply of money
leverage
the use of borrowed money to supplement existing funds for purposes of investment
What is form 1003
"universal form residential loan application" - an application for mortgages
Wrap-around Mortgage
A form of secondary financing for the purchase of real property. The seller extends to the buyer a junior mortgage which wraps around the existing in addition to any superior mortgages already secured by the property.
Straight Loan
A loan in which only interest is paid during the term of the loan, with the entire principal amount due with the final interest payment.
HOEAPA-Home ownership in equity protection act
Amends tila Requires full disclosure of key information as well as pre-loan counseling. Restricts fees
Streamline Refinance-fha
An option for borrowers who want to take advantage of low interest rates
What happens when fed decreases the percentage that member banks must keep on reserve?
Banks keep less money in reserve therefore local economy gets better bc more money is available
What is paragraph four of the promissory note
Borrorowers right to pre-pay
What is paragraph six in the promissory note
Borrowers failure to pay as required
What is a conforming loan
Conforms to FNMA/FDMC guidelines
commercial paper
Consumers and business owners need funds to purchase personal property or to meet short term needs, banks make loans to these consumers Used as a collateral
How do you calculate fully index rate
Current index plus margin
What does it mean if the Fed increases reserve requirements
Member banks must keep more assets on deposit at the reserve bank
Cap rate formula
NOI / Purchase Price A way of quickly valuing income producing properties in comparison to other properties
Which type of participation agreement involves more than one mortgagee as owner of a finance instrument in which each receives an equal share of the mortgage payment?
Partnership Among mortgagees
What type of partnership does each mortgagee receive a share of the mortgage payment
Partnership among mortgagees
What type of partnership is there more than one mortgage or as owner
Partnership among mortgagors
What type of partnership is a real estate mortgage investment conduit
Partnership between mortgagees
What type of partnership is a cooperative
Partnership between mortgagors
margin
Percentage (points)charged by lender above index rate Has cap
How do you calculate va funding fee
Percentage of loan amount Manufactured home funding feet is 1%
What happens when the Fed sells government securities
Shrinks the amount of available funds for lending and slows growth
What is the purpose of the federal reserve system
The Fed regulates the US depository institutions
When does a loan estimate expire
10 days
How long does a bank provide Kendra with a loan estimate when she applies
3 bus days
What type of fee does Fannie Mae pay a loan originator for a loan
A collection fee
Who is trustee in a deed of trust
A neutral 3rd party That holds title into loan is paid
Who is the trustee in a deed of trust
A neutral third-party
Direct Endorsement Program
A program in which lenders are able to process FHA insurance applications without prior approval of the FHA
HECM
A reverse mortgage. The Home Equity Conversion Mortgage is specifically a government reverse mortgage program. If more equity is paid out then remains the homeowner doesn't have to make up the difference
What is the cash out refinance va program
Allows homeowner to receive cash from the equity of their home
What's another name for a land contract
An installment sale contract
What are securities?
Financial Assets that companies sell to raise capital. Investors purchase them hoping to earn a high rate of return. Long and short term debt instruments
What happens during the oversupply phase
Homes sell for high higher prices lots of buyers and new construction
What qualifying ratios are used in a VA loan
Housing ratio and total debt obligation
Applying caprate to net operating income is a way to determining a properties
Investment
Mechanic's Lein (Construction lein)
Involuntary and specific lein
How can a FH a loan fire pay the annual mortgage insurance premium
Pay 1/12 of a monthly separate from his mortgage payment
Who holds legal title when mortgage is used
Property owner
If a loan has been foreclosed on which lean takes priority
Property tax and then first in first paid
What type of market when you see a property undervalued and a large supply of homes in the market
Recovery
Alienation Clause (Due on Sale Clause)
Says you must repay your mortgage if you sell your home to a new owner (loan is not assumable)
When the treasury collects few were fun than what is needed to pay the government bills what will they do
Sell securities
RESPA prefer Hibbetts kickbacks between which parties
Settlement service providers
Which agency sets the guidelines for qualified mortgages
The consumer financial protection bureau
Security instruments that pledge property as collateral for a loan
The mortgage and the deed of trust
A short term security issued by the treasury that has a maturity of one year or less is called
Treasury bill
Which program allowed US treasury to spend billions of dollars to stabilize The financial system, boost credit market, help families avoid foreclosure and promote economic growth?
Troubled asset relief program
What are factors of money
Unit of value, store of value, medium of exchange.
What is recasting of a loan?
When an outstanding loan balance is reconfigured
Mutual banks are created to serve who during the mid-19 century
Workers
In a deed of trust who is the beneficiary
lender
VA - RESIDUAL INCOME
Amount of net income remaining after deducting all debts and bills then taking that number and look further into geographic area and number of family members
What is in paragraph eight of the promissory note
Applications of person under this note
What is a VA certificate a reasonable value
Appraisal report fr VA certified appraiser
CRV (certificate of reasonable value)
Appraisal required on VA loans.
Dintermediation
Banks are seeing more withdrawals than deposit
What is paragraph one of a promissory note
Borrowers promise to pay
Property flipping occurs when:
Bought, Appraised for more than it's worth and sold within a short time frame. Kickbacks are common place
Silent Second
Buyer negotiates a second mortgage with the seller but its not disclosed to the lender
Which of the following is included in hMDA data
Census tract information
What loan typically takes the longest to close
Commercial
What do you do to determine debt coverage ratio
Divide net income by debt service
When a promissory note is sold how is ownership transfered
Endorsement by seller of the note
Who regulates reserve requirements and rules and regulations of banks
FHLBanks