Real Estate Finance

FHA

20% Financing

A buyer can obtain qualified mortgage

38%

Borrowers should be wary of lenders who offer mortgages at more than ______% over current market interest rates

5%

Which of the following describes a Treasury note?

A Treasury security with a maturity term between two and 10 years

Seller Jerome found financing that would include his current mortgage inside the buyer's mortgage. What type of mortgage is this?

A Wrap-around Mortgage

Collateralized Mortgage obligation

A debt security holder

Home Mortgage Disclosure Act

A federal law that requires lenders to annually disclose the number of loan applications and loans in certain areas, thus eliminating the practice of "redlining."

Deficiency judgment

A lender will file for this to recoup losses

Seller Jerome found financing that would include his current mortgage inside the buyer's mortgage. What type of Mortgage is this?

A wrap-around Mortgage

Summary of Title

Abstract of Title

If any montly installments under this note is not paid when due and remains unpaid after a date specified by notice to mortgagor, the entire principle amount outstanding and accured interest theron shall at onece become due and payable at the option of the Note holder?

Acceleration Clause

How are account number displayed in a credit reprot?

Accounts numbers are truncated for security purposes.

What do ARMS stand for

Adjustable rate mortgage

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

An Assumption

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

An Assumption

A CMA or a BPO is an example of

An informal estimate of market value

A Standerized measure for intrest rates and other costs of the loan is called?

Annual Percentage Rate

A standarized measure for interest rates and other cost of the loan is called?

Annual percentage rate

Which of the following net worth examples may a lender view most favorably?

Assets exceed liabilities

When a promissory note is sold, what is recorded in the countly land records

Assignment of the note

Which of the following is likely effect when the discount window is closed

Banks don't have acess to additional funds

USDA Farm offers

Building a new hay barn, building for farms and ranches

When borrowers started missing morgage payments how did this affect collateralized mortgage obligations

CMOs were not collecting the expected principal and interest pay ents due to the increase in defaults and foreclosures for their underllying collateral

A Short Sale

Can negatively impact the seller's credit and the lender may seek a deficiency judgment for the amount not repaid

The USDA Farm Service Agency

Can offer direct loans to farmers and ranchers. The loans are funded by congresional appropriation q

FDIC most likely will insure

Certificate of deposit

kaycie is a new employee at a mutual savings bank. During orientation she learned that mutual savings banks have limitations that are set by their

Charter

Fatima is using a VA loan to purchase a home from Sue. Sue agrees to pay Fatima's closing costs. which of the following statements is true?

Closing costs aren't considered a seller concession

If using a VA loan to purchase a home from another person and they agree to pay closing cost. Which of the following statements is true?

Closing costs aren't considered a sellers concession.

Commercial banks offer interim financing in the form of ______________, Loans

Construction

Commercial banks offer interim financing in the form of _______________, loans

Constuction

Fannie Mae

Conventional FHA insured, Va guaranteed loans

Interest only loans are a form of ___________buyer financing

Creative

Commercial banks derive most of their funds fro mortgage on

Demand and Deposits

Commercial paper as collateral is called

Discount Point

Administrative Procedure Act

Enacted in 1946

HELOC

Equity

Conventional loans from larger commercial banks

Fannie Mae

Federal Housing Finance Agency

Fannie Mae

A Government Sponsored Enterprise GSE

Fannie Mae and Freddie Mac

Fannie Mae and Freddie mac use guidelines for conforming loans set by the

Federal home Financing Agency

ARM

Fixed to Adjustable

Which agency is sponsored by the GSE

Freddie Mac Government Sponsored Enterprise

The Government National Mortgage Corporation was created in 1968 under the (HUD) and is more commonly known as

Ginnie Mae

The interest rate on FHA section 251 adjustable rate mortgage will

Go up or down, but can't change more than a maximum number of points allowed by the FHA over the life of the loan.

The interest rate on a FHA Section 251 adjustable rate mortgage will

Go up or down, but can't change more than a maxium number of points allowed by the FHA over the life of the loan.

When mortgage monthlypayment increase over time according to a set schedule this is

Growing equity

Ginnie Mae

HUD-Government nation Mortgage Corporation 1968

Veterans who use the VA's Specially Adapted housing grant must?

Have permanent and total service connected disability

Wendy is buying a house from Tom. Tom helps Wendy out by paying for 2-1 buydown. The lender has given Wendy an interest rate of 5% . Which of the following describes what the buydown will do to Wendy's interest rate?

Her rate will be 3% for the first year 4% the second year and 5% after that.

Recovery Phase in real estate market

High but stabilized unemployment and a high number of foreclosures

Historically, what do property values tend to do over a long period of time

Increase

Only ____________, is paid until the end of a straight mortgae loan term, when the principal is repaid in full

Interest

Which of the following is a true statement about deducting interest on mortgages taken out in tax years between 2018 to 2025?

Interest on the first $750,000 of mortgage debt is deductible for married couples filing jointly or $375,000 for couples filing separately

Whats the purpose of a typical subordination agreement

It allows a junior mortgage to move into first lien position

HUD's Good Neighbor program

It allows qualified individual to buy a home at a 50% discount with a $100 down payment

Which of the following best describes a Blanket Lien

It gives lenders the ability to recover loses due to a foreclosure sale from any current or future property the borrower owns.

Which of the following describes a blanket Lien?

It gives lenders the ability to recover losses due to a foreclosure sale from any current or future property the borrower owns until the losses are recovered.

what is the purpose of the loan estimate

It gives the buyers an idea of loan so they will be able to make an informed decision about the loan.

Subordination agreeement?

Junior Mortgage to move into first position

Services performed by a third party that the lender selects

Loan Estimate form "Includes fees for

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

Loans insured or guaranteed by U.S. government agencies

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

Loans insured or guranteed by US Government Agencies

When a ARM makes its initial adjustment, it does so to its fully indexed rate?

Margin plus index

Liens can be

Mechanic's and materialman's or junior liens

Store of value, unit of account, and what other factor define money?

Medium exchange

How much of a mutual savings banks assets come from saving accounts?

More than 70%

Lock In clause

Mortgage provision which prevents the loan from being paid off early.

The Dodd-Frank Act is created 2007-2008 and responsible for subprime loans

Non-bank lenders

Your neighbor is a nurse does she qualify for the Good Neighbor program?

Not unless she is a EMT, only EMT are qualified along with fire fighters, teachers, law enforcement

Jac is selling his unencumbered property to Shem and is acting as his lender in the transaction What type of finance instrument can Jacob use for the loan agreement?

Note with mortgage note with deed of trust, contract for a deed

SAFE-Act requires that mortgage loan originatiors

Obtain a license

A qualified mortgage is

One that meets certain lending standards

Whts another name for the Homeowners Protection Act

PMI Act of 1998 Homeowners protection act

What takes place in the secondary market

Packaging loans into mortgage backed securities MBS and sold to investors

Listing in the contract "At closing" or Before closing"

Page 2 closing disclosure the amount is to be paid

Which of the following can a lender do if a borrower fails to keep homeowners insurance on the collateral property?

Place lender-acquired insurance on the property and bill the borrower

Local Government involved

Planning

Which of the following best describes the state of the market during the over supply phase in real estate cycle

Properties selling for more than their appraised value many buyers in the market and lots of new construction

The Home Mortgage Disclosure Act

Protects demographic information not be shared with anyone.

Mortgage REIT

Real Estate Investment Trust involves residential and commercial properties

Two examples of loan adjustments or modifications are moratorium and

Recasting-Reconfiguing

Which of the following made mortgages attractve to investments?

Rising home prices, prior to the 2007 financial collapse

Hugh works as a loan officer at a bank. Because of the _____________, he must be registered with the nation wide Mortgage Licensing System

SAFE ACT

Hugh works as a loan officer at a bank. Because of the ____________,He must be registered with the Nation wide Mortgage Licensing System?

Safe Act

Long and short term debt instuments are called

Securities

What is the most common structure for a CMO

Sequential Pay

Mechanics lien

Specific and involuntary

The FHA _________________, program allows a borrower to refinance an FHA loan without verifying income or assets

Streamline Financing

How much of the monthly payment is principle and intrest

Subtract the taxes and insurance from the montly payment to get the amount for principal plus interest

Moratorium

Temporary Suspension

Which act requirs that individual making more than five " owner financed" loans per year obtain a residential mortgage loan origination license

The Texas Safe Act

Evaluates Loan Application

The Underwriter

The signature lines on the multi-state Fannie Mae promissory not are set up for

The borrower to sign

The FHA Energy Efficient Mortgage allows modifications such as solar panels as long as

The cost of the modification is within limits based on the value of the home

The annual MIP is recalcullated each year using __________?

The end of year loan balance after the next 11 payments

Acceleration Clause

The lender can call the loan due and payable if the borrower defaults on the loan

Right of Recission

The lender has three buisness day or the latter of either the date that the loan application is submitted or the date the disclosure is made, during which the borrower can cancel their loan.

What does it mean when the insurance company uses participation financing?

The life insurance company paticipates by taking partial ownership of the project in exchange for funding the loan.

the annual MIP is recalculate each year using

Then end of year loan balance, plus the balance after the 11 payments

Mutual savings banks prefer to keep their lending activities in their immediate geographic area. Why

They prefer to personally monitor loans they issue.

Which of the following statements is true about national lending intuitions?

They sell packaged loans to investors

What is a reason a borrower would choose to split or piggy aback loan option

To avoid going over the conforming loan limit

What is the purpose of the fixed adjustable rate note

To convert the interest rate from fixed to adjustable

When you recieve a loan Estimate from your lender what is the purpose of this document

To detail the estimated closing costs for the Loan

Which of the following statements is true about the Federal Reserve

Twelve district banks comprise the FED, with 14 year terms

Troubled Asset Relief Program

U.S. treasury to spend hundreds billions of dollars to stabilize, financial system boost credit markets to help familile avoid foreclosure and promote economic growth.

Voluntarily conveys his property to his lender

Voluntary conveyance of a deed

A lapse in property insuurance coverage can result in borrower dfault because it leaves the lend

Vulnerable

In what situation would the U. S. Treasury be most willing to sell securities

When the government bills exceed income collected

Mutual savings banks were created to serve ______________, during the mid 19th century?

Workers

Mutual savings banks were created to serve during the mid 19th Century

Workers during the industrial expansion of the mid 19th century

Non-Recourse Mortgage

a clause that prohibits the lender from suing the borrower for unpaid amounts if foreclosure occurs

Partnerships among mortgagees

a partnership each mortgagee receive a share of the mortgage payment

When a bank becomes insolvent what methods are used

assumption and pay out

A tax free gift

cant be more than $15,000 to any individual annually

Private loan companies may

charge higher fees and need collateral to secure the loan

What role did CMO's play in the financial crisis of 2007

fThey increased market speculation

Lien Holders are paid from the

from the after the auction is held if; the sale doesn't tnet enough to repay all lien holders, they are repaid in order of priority. Some junior lien holders may not get anything

Loans create

future cash income

43% of a debt to income ratio

is unwavereing

When mortgage packages are sold

it provides additional cash flow for new loans

Mutual saving banks lending activities are limited by

its Charter and vary from state to state

HUD's Housing Choice Voucher program helps

low income tenants with rental assistance that is paid directly to the landlord.

The FHA has a mission

of stabilizing the mortgage market

Freddie Mac

only considers the total debt to income ratio

FHA Loan

only requires a down payment of 3.5%

FHA

provides mortgage insurance for home loans

Paid by others "L" on a contract Indicates

the creditor pays the item at consumation

With a interest only payment

the interest only last for a few years and then when the loan term is over the borrower has to repay the entir principal. This is a Lump Sum payment. Some time people will refinance the loan when this happens.

Fannie Mae considers

total and housing debt to income ratio

To fund you children college education you can use the

use a loan based on the equity amount available is a home equity loan

HAMP, Home Affordable Modification Program

was created as part of the Homeowner Affordibility and Stability plan

Junior Lien

when a second loan places a lien against property already pledged as collateral, it creates a ?

Echo Boomers

when generations financed their homes due to also having other debt obligations

Negative items in a credit report

you would most likely see Lien

What is the acronym for the legislation that requires lenders to make full disclosure of the terms and conditions of cred

TILA Truth in Lending Act