Oregon 30-Hour Real Estate Finance Course Week 2

American Recovery and Reinvestment Act (ARRA)

A $787 billion federal government package intended to stimulate economic growth during the recession of 2008-2009

Consumer Financial Protection Bureau (CFPB)

A U.S. government agency that helps protect consumers by regulating financial products and services, like mortgages, credit cards, and student loans.

trigger term

A term that, if used in advertising a loan product, requires the disclosure of all other terms

Securities

All of the investments, including stocks, bonds, mutual funds, options, and commodities, that are traded.

The ______ was a response to the practice of redlining and was enacted in 1977.

Community Reinvestment Act

Farmer Mac is an entity that ______ for agricultural property loans, rural utility loans, and certain loans guaranteed by the U. S. Department of Agriculture.

Creates a secondary market

The ______ was enacted in 2010 to create stricter regulation of the financial services industry to reduce costs for consumers from (for instance), undisclosed kickbacks.

Dodd-Frank Wall Street Reform and Consumer Protection Act

How is Regulation Z related to the Equal Credit Opportunity Act?

Enforcement

The Farm Credit System is overseen by the ______, an agency of the federal government.

Farm Credit Administration

USDA Rural Development Program

Funds housing and service projects in rural areas.

Farm Credit Administration (FCA)

Helped farmers refinance their mortgages in order to keep their farms

Farm Credit System Insurance Corporation

Insures the timely repayment of principal and interest on FCS debt securities

The CFPB uses education to accomplish its mission, such as the ______ publications.

Know Before You Owe

Regulation Z

Lenders must provide residential loan borrowers with all important information related to the loan, such as APR

RESPA (Real Estate Settlement Procedures Act)

Lenders must provide written disclosure of estimated settlement costs to borrowers.

stimulus package

Money allocated by governments to financial institutions and selected industries to prevent their collapse and reinvigorate economic growth

What HMDA data is available about loans?

Mortgage applications, loan amount, type of loan, and loan purpose

The Dodd-Frank Act created the CFPB in part to regulate ______, which were among the largest originators of subprime mortgages prior to the financial crisis of 2007‒2008.

Non-bank lenders

What two types of property information are included in HMDA data?

Occupancy & Property Type

USDA Farm Service Agency

Offers direct loans to farmers and ranchers funded through congressional appropriation.

Government Sponsored Enterprises (GSEs)

Organizations created by the federal government to help increase loan opportunities for homebuyers.

Equal Credit Opportunity Act (ECOA)

Prohibits lenders from denying credit to applicants on the basis of protected class status

Community Reinvestment Act (CRA)

Requires financial institutions to invest in the communities they serve

Home Mortgage Disclosure Act (HMDA)

Requires financial institutions to report their mortgage data

Truth in Lending Act (TILA) 1968

Requires lenders to make full disclosure of the terms and conditions of credit

Secondary Morgage Market

Resale marketplace for existing loans

Joyce and Danny purchased a home in 2009 for $280,000. They received a homebuyer credit of $8,000. Their friends Margie and Scott purchased a home in 2010 for $320,000. Margie and Scott didn't receive a homebuyer credit. Why not?

The homebuyer credit was part of the stimulus package enacted in 2009 and was only effective between January and December of 2009.

Mortgage Disclosure Improvement Act (MDIA)

This act amends TILA to require specific timing related to disclosures that give consumers time to think about the loan they're about to obtain

Consumers who feel they've experienced lending discrimination can file a complaint with HUD.

True

Farmer Mac buys agricultural loans from lenders to pool and sell in the secondary market as securities.

True

The ______ requires specific disclosures and was enacted in 1968 as part of the Consumer Credit Protection Act.

Truth in Lending Act

Which government program assists rural Americans by offering loans, grants, and loan guarantees for housing?

USDA Rural Development

USDA

United States Department of Agriculture

The Mortgage Disclosure Improvement Act gives applicants a three-day ______ to review and approve the Loan Estimate and Closing Disclosure form.

Waiting Period

The American Recovery and Reinvestment Act provided mortgage assistance to ______.

Wounded servicemen and servicewomen

Farm Credit System (FCS)

a government-sponsored enterprise that provides financing to purchase rural homes through a network of financial cooperatives.

mortgage loan originators (MLOs)

a person or institution that helps a prospective borrower get the right mortgage for a real estate transaction.

Subprime

borrowers with a poor credit history or none at al

The Housing and Economic Recovery Act of 2008 (HERA)

created to address the subprime mortgage crisis

Redlining

discriminatory lending practice wherein loans are not granted in certain geographic locations based on the ethnic and economic characteristics of the area

Annual Percentage Rate (APR)

interest rate for an entire year, along with any costs or fees associated with your loan

The Federal Farm Credit Banks Funding Corporation

is an entity owned by the Farm Credit System banks that markets the securities the banks sell to raise loan funds.

subprime lending

lending to home buyers who don't meet the usual criteria for being able to afford their payments

guaranteed loans

loans made by a financial institution that the government will repay if the borrower stops making payments

Farmer Mac (Federal Agricultural Mortgage Corporation)

provides financing of agricultural real estate and rural housing loans and liquidity to agricultural and rural housing lenders

Secure and Fair Enforcement for Mortgage Licensing Act (SAFE)

sets a minimum standard for licensing and registering mortgage loan originators (MLOs)

Liquidity

the ease with which an asset can be converted into cash

right of rescission

the right of a consumer to cancel certain types of loans