real estate finance
Birth of the Federal Reserve System 1913 after several attempts
1791-1811 First Attempt at Central Banking, 1816- 1836 A Second try fails, 1908-1912 The stage is set for decentralized central bank, 1912 Woodrow Wilson as financial reformer, 1913 The Federal Reserve system is born
H.U.D When was the FHA created?
1934
Supply can be restricted by a number of factors including:
Local Government building codes and zoning ordinances regardless of their perceived value, trend to restrict supply.
Some of the most important characteristics of a savings and loan association are:
Locally owned, receives individuals savings and uses these funds to make long term amortized loans, Makes loans for constructions, purchase, repair, or refinancing of houses, state or federal chartered.
monetary policy
Monetary Policy which is the maintenance of a stable money supply that provides or growth in the economy while keeping inflation in check. The Federal Reserve is responsible for Monetary Policy in the United States.
How inflation affects real estate pricing and values
More available affordable housing means that potential buyers that may have been frightened taking on a high prices mortgage will be much more interested becoming home owners. This is often referred to as a buyers market.
Mortgage package Mortgage
Mortgage - Which is the document that pledges the property as security for repayment of the note, is recorded in the county in which the property is located.
Mortgage Originators can be broken down into 3 categories:
Mortgage Banker example wells fargo, bank of America, Chase Mortgage Brokers - Middleman correspondent lenders private lenders
Liens common example of liens include:
Mortgage and Trust Deeds, Tax Liens, Judgments, Mechanics and Material man's M&M Liens.
Lock-in Clause
Mortgage provision which prevents the loan from being paid off early.
_____ Bonds are sold by a Government entity to fund
Municipal Bond are sold by a government entity to fund.
Disclosure after Settlement Servicing Transfer Statement
Must be provided no more than 15 days after the effective date of the transfer.
Foreign Lenders
New York is #1 for Foreign Investors.
Office of the Comptroller of the Currency O.C.C.
O.C.C charters and regulates national banks
Office of consumer credit commissioner OCCC regulated real estate transactions include:
OCC regulates: Home equity loans, Secondary Mortgages, Home Improvement Loans, Property tax lien lenders.
The benefits of home ownership include:
Occupancy, Tax Benefits, Pride of Ownership, Security, Investment
Processing
Once the application is complete the file moves into the processing phase. During the this phase the loan processor will build a file that will be used to make an underwriting decision.
Open-End loan
Open end loan which has payment and advances that vary over time Example: Credit Card
The Department of The Treasury Operating Bureaus.
Operating Bureaus make up 98% of the Treasury work force.
Application includes the following six pieces of information P.E.N.C.I.L.
P- Property Information E- Estimated Value N. Name of borrower S. Social Security I. Income L. Loan Amount
RESPA Real Estate Settlement Procedures Act Section 8
Payments in excess of the reasonable value of good provided or services rendered are considered kickback... kickbacks are prohibited.
The demand for real estate is affected by: Personal preference
Personal Preference for an area is important, but fall far behind jobs and transportations in priority
United States Treasury management of Fiscal Policy
Primarily responsible for raising funds to finance the operations of the United States Government. While the Federal Reserve is responsible for the nations monetary policy, The Treasury's primary mission is the management of fiscal policy.
Seller finance or Seller back
Private lender is the seller who agrees to finance all or part of the sale for a buyer. This form of financing is often referred to as Seller financing or seller back.
V.A. Loan Who provides VA home loans?
Private lenders
Private lenders
Private lenders make up a small but important category for funding residential mortgage loans. Private lenders have a relationship with one or more originators, and selectively invest in mortgages that might not otherwise have a ready buyer in the secondary market.
CRA Community Reinvestment Act
Prohibits redlining, is the practice of refusing to provide financing in a particular area because of Location. Red lining is only for BANKS
Mortgage package promissory note
Promissory Note- is the borrowers unconditional promise to repay and includes the amount borrowed, payment amount, due date and rate of interest. The note is not generally recorded.
Promissory note is presented till after closing
Promissory note is presented till after closing
Real Estate Owned (REO)
Property acquired by a lending institution through foreclosure and held in inventory. Property wasn't sold in the Auction "front door step" at court house.
Truth in Lending Act TILA Z implemented on July 1969
Protect consumers in credit transactions by requiring clear disclosure of key terms of lending arrangements and all associated cost. TRIGGERING TERMS.
Coverage of R.E.S.P.A
2. A Manufactured home, either existing or to be placed on the real property using loan proceeds.
When was H.A.R.P offer?
2009 Home Affordable Refinance Program. The Home Affordable Refinance Program (HARP) is a federal program of the United States, set up by the Federal Housing Finance Agency in March 2009, to help underwater and near-underwater homeowners refinance their mortgages.
Front Ratio
28% x gross monthly income = Max. monthly house payments.
Back Ratio
36% x gross monthly income = Max. P.I.T.I and debts per months.
Federal Reserve, How long is the lifespan of a $ 20.00 bill
7.9 years less than 10 years
Real Estate Mortgage Investment Conduit REMIC
R.E.M.I.C a vehicle for restructuring the cash flow of mortgage pools
Real Estate Settlement Procedures Act R.E.S.P.A Section 10
R.E.S.P.A Section 10 Escrow Accounts The lender must perform an escrow account analysis once during the year and notify borrowers of any shortage. Any excess of $ 50.00 or more must be returned to the borrowers.
Real Estate Settlement Procedures Act Section 9
R.E.S.P.A Section 9 Title company, No seller of property that will be purchased with the assistance of a federally related mortgage loan shall require directly or indirectly, as a condition to selling the property, that tile insurance covering the property be purchased by the buyer from any particular tile company.
Real Estate Settlement Procedures Act Section 9
R.E.S.P.A Section 9 Title company. Can't have a title company as a condition of the sale
ECOA Equal Credit Opportunity covers
Race, Color, Religion, National Origin, Sex, Marital Status, Age, Receipt of income form public assistance program, the good faith exercise of any rights under the Consumer Credit Protections Act.
Generation X 1965-1980
Raised in dual-career families, attended day care, feeling of insecurity about jobs
At the treasury level, funds can be raised to pay for government spending by increasing borrowing and ___
Raising taxes At the treasury level, funds can be raised to pay for government spending by increasing borrowing and raising taxes
Troubled Asset Relief Program (TARP)
A 2008 Federal government program that authorized the U.S. Treasury to loan up to $700 billion to critical financial institutions and other U.S. firms that were in extreme financial trouble and therefore at high risk of failure
A Closed-End loan is one that is funded in its entirety up front, with no additional advances anticipated.
A Closed-End loan is one that is funded in its entirety up front, with no additional advances anticipated. Example Mortgages
A __ is a person corporation or firm not otherwise in banking that provides its own funds for mortgages finance propose? a. Mortgage Broker b. Savings and loan association c. Mortgage Banker d. Commercial Banker.
A __ is a person corporation or firm not otherwise in banking that provides its own funds for mortgages finance propose? d. Commercial Banker
Encumbrance
A claim, Lien, or liability attached to and binding real property is an Encumbrance.
Lifting clause
A clause in a junior mortgage allowing a borrower to replace an existing first mortgage without disturbing the status of the junior mortgage.
Release Clause
A clause often found in a blanket loan allowing the borrower to obtain partial releases of specific lots by making required lump sum payments. Partial of the land is released
Baby Boomers
A cohort of individuals born in the United States between 1946 and 1964.
Closing Disclosure
A final closing disclosure to the consumer that must be received by the consumer 3 days before closing
Foreclosure Sale
A legal procedure by which a secured creditor causes the judicial sale of the secured real estate to pay a defaulted loan
Specific Lien
A lien affecting or attaching only to a certain, specific parcel of land or piece of property. example Mortgage
Voluntary Lien
A lien placed on property with the knowledge and consent of the property owner.
Involuntary Lien
A lien placed on property without the consent of the property owner.
General Lien
A lien that attaches to all property owned by an individual. Real and personal. Example a Judgment or and IRS Lien.
Par loan
A loan with no discount points
A loan with no discount points is know as a
A loan with no discount points is know as a Par Loan
Local Government Policy affect the economic cycles
A local community may not see the full benefit of a national economic expansion if it pursues a slow or no growth policy. A community can slow economic growth by applying restrictive zoning policies
Servicing disclosure statement
A mortgage Loan Originator who receives an application for a federal related mortgage loan is required to disclose to the borrower at the time of the application, or within three business day after its submission.
A mortgage is a pledge of real estate as security for repayment of a debt.
A mortgage is a pledge of real estate as security for repayment of a debt.
government loan (mortgage)
A mortgage that is insured by the Federal Housing Administration (FHA) or guaranteed by the Department of Veterans Affairs (VA) or the Rural Housing Service (RHS). Mortgages that are not government loans are classified as conventional loans.
How mortgage loans are priced one way is
A one-point discount is one percent of the loan amount, and is an up front payment of interest paid by borrowers to reduce the interest rate.
Mortgage Broker
A person who brings together the user of capital (borrower) and the supplier of capital (lender). For this service, a finder's fee is usually paid by the borrower.
Alienation Clause
A provision in a mortgage requiring full payment of the debt upon the transfer of title to the property, due on sale. Prevents loan assumptions.
CRA Community reinvestment act 1977
A significant Federal law that affects lenders is the Community Reinvestment Act CRA. The Fedral law was passed to ensure that banks would serve the needs o the Community in which they were chartered to do business.
A tax lien can be classified as an involuntary lien and ___ a. M&M b. Statutory c. Voluntary d. equitable
A tax lien can be classified as an involuntary lien and ___ b. Statutory
RESPA Real Estate Settlement Procedures Act Section 8
Real Estate Settlement Procedures Act RESPA Section 8 prohibits any persons who, pursuant to any agreement or understanding, gives or receives a fee or a thing of value, including payments, commission, fees, gifts, or special privileges for referral of settlement business.
Real Estate license holders often refer buyers to a number of trusted loan originators, now universally referred to as Residential Mortgage Loan Originators RMLO is mandated by SAFE ACT
Real Estate license holders often refer buyers to a number of trusted loan originators, now universally referred to as Residential Mortgage Loan Originators RMLO Mandated by SAFE ACT
Real Estate transaction regulated by the Office of Consumer Credit Commissioner include which of the following? a. home equity loans b. home improvement loans c. secondary mortgages d. all of these transactions are regulated by the OCCC
Real Estate transaction regulated by the Office of Consumer Credit Commissioner include which of the following? d. all of these transactions are regulated by the OCCC
Disclosures before settlement/ Closing Occurs Initial Escrow Account Statement
Regulation X requires the initial Escrow Settlement Statement must be provided at Settlement or within 45 calendar day of settlement.
fiscal policy
Relates to Federal Government Spending. Government spending is approved by the U.S. congress. The U.S. Treasury is responsible for raising money to support the spending decisions of the congress.
Secure and Fair Enforcement for Mortgage Licensing Act SAFE Act and NMLSR
All residential mortgage loan originators RMLOs must now be registered with the Nationwide Mortgage Licensing System and Registry NMLSR
T.I.L.A Authorization to furnish Tila-respa integrated disclosures done with every deal. There is a integrated Disclosure form TAR-2516 form
TAR-2516 form T.I.L.A Authorization to furnish Tila-respa integrated disclosures done with every deal. There is a integrated Disclosure form
Troubled Asset Relief Program (TARP)
TARP was created in 2008 to restore the nation's financial stability and restart economic growth.
Texas Department of Housing and Community Affairs TDHCA
TDHCA is an agency responsible for affordable housing, housing related and community service programs and the regulation o the state's manufactured housing industry.
Supply can be restricted by a number of factors including:
Taxation affects the supply of real estate both by income tax policy and the level of property tax. taxes on real property are referred to as AD Valorem Texas According to value
Out of the three theories of ownership of mortgage properties exist though out the United States: In Title theory states, In a Lien Theory State, Intermediary Theory State.
Texas is a In Title theory states, Non judicial foreclosure state.
Interstate Land Sales Full Disclosure Act
The Act is currently administered by the Consumer Financial protection CFPB. Developers are required to provide east purchaser with a disclosure document as known as Property Report.
Under The Dodd-Frank Wall Street reform and Consumer Protection Act The Consumer Financial Protection Bureau CFPB
The Consumer Financial Protection Bureau CFPB was established The Bureau has the authority to examine and enforce consumer protections regulations for all mortgage related businesses large non bank financial companies and banks and credit unions with assets greater than 10 billion.
The Dodd-Frank Wall Street Reform and Consumer Protection Act, signed into law on 2010 established the _____ a. office of Consumer credit commissioner b. consumer financial protection bureau c. community development block program
The Dodd-Frank Wall Street Reform and Consumer Protection Act, signed into law on 2010 established the _____ b. Consumer Financial Protection Bureau
Section 8 of R.E.S.P.A and Regulation X Prohibition against kickbacks and unearned fees
The Estimated charge or range of charges generally made by such provider
H.U.D Who funds the FHA?
The FHA funds itself
Open Market Operations
The Fed's most flexible and often-used tool of monetary policy is open market operations for buying or selling government security.
The Housing and economic recovery act was enacted in __ and created the Federal Housing Finance Agency FHFA. a. 1938 b. 1968 c. 1992 d. 2008
The Housing and economic recovery act was enacted in __ and created the Federal Housing Finance Agency d. 2008
Most mortgage brokers specialize as the Middle man between the borrower and the lender. The Mortgage broker negotiates sells or arranges loans to be delivered to large investors.
The Large Investors assign large blocks of loans into Loan Pools as collateral to back mortgage-back securities.
Truth in lending act TILA/Real Estate Settlement Procedures ACT R.E.S.P.A- Integrated Disclosures
The TRID rule mandated the use of tow disclosures: The three-page The Loan Estimate L.E. The five page Closing Disclosure C.D.
A deed of trust is a three party instrument whose parties include:
The borrower also known as the mortgagor who is the party who signed the promissory note The lender also known as the mortgagee who is extending credit to the borrower. The trustee who is the a third party fiduciary to whom title is transferred.
The borrower is known as the mortgagor.
The borrower is known as the mortgagor. The mortgagor get the key to the door.
Internal Revenue Service (IRS)
The branch of the U.S. Treasury Department in charge of collecting taxes
The community reinvestment act, enacted in ___, ensures that banks serve the needs of the community in which they were chartered. a. 1995 b. 2010 c. 1977 d. 1974
The community reinvestment act, enacted in ___, ensures that banks serve the needs of the community in which they were chartered. c. 1977
Section 8 of R.E.S.P.A and Regulation X Prohibition against kickbacks and unearned fees
The consumer is not required to use any particular provider of settlement services, that is the consumer is not steered or required to use and affiliated entity providing mortgages or other settlement.
Closing
The consummation of a contractual real estate transaction in which all appropriate documents are signed and the proceeds of the mortgage loan are then disbursed by the lender is call closing.
The Federal reserve system
The country's central banking system, which is responsible for the nation's monetary policy by regulating the supply of money and interest rates
Record Retention requirements for the TILA-RESPA rule
The creditor or servicer if applicable, must retain the post-consummations escrow cancellation notice and the post consummation partial payment policy disclosure for 2 years.
The department of the Treasury is organized into tow major components The Departmental Offices and the Operating bureaus.
The department of the Treasury is organized into tow major components The Departmental Offices and the Operating bureaus.
Underwriting
The detailed process of evaluating a borrower's loan application to determine the risk involved for the lender is defined as underwriting.
The federal reserve sets reserved requirements for all commercial, savings banks, savings and loans.
The federal reserve sets reserved requirements for all commercial, savings banks, savings and loans.
The secondary mortgage market was designed to provide greater liquidity to the residential real estate market, primarily by ___ a. The sale of mortgage loans as investments b. Loaning money to primary market lenders c. Charging additional interest to borrowers
The secondary mortgage market was designed to provide greater liquidity to the residential real estate market, primarily by ___ a. The sale of mortgage loans investments.
There are no TREC Promulgated form for selling property on a contract for deed.
There are no TREC Promulgated form for selling property on a contract for deed.
Reverse Mortgage
An arrangement where the lender agrees to pay money to an elderly homeowner, either regularly or occasionally, and to be repaid from the homeowner's equity when he or she sells the home or obtains other financing.
An easement for ingress and egress is known as _________. a. encumbrance b. lien c. debt d. judgment
An easement for ingress and egress is known as encumbrance
The monetary Policies of the Federal Reserve affect the availability of funds and interest rates.
As inflation becomes a concern in the national economy, the Federal Reserve pursues policies that increase rates and constrict the economy. As economic activity declines, the Federal Reserve does just the opposite by pursuing policies that reduce rates and stimulate employment.
cont. Fiscal Policy
At the Treasury level, funds can be raised to pay for government spending by Raising taxes, Increasing borrowing.
The Fed uses three Primary Monetary policy told to influence the cost and availability of credit:
Three Primary monetary tools are: Open Market operations, the discount rate, reserve requirements.
Community Development Block Grants C.D.B.G
C.D.B.G. created in 1974 to assist states and communities, combining a variety of old, narrow, categorical programs; its is one of the oldest of the federal black grant programs
Consumer Financial Protection Bureau C.F.P.B ALL MORGAGE LOANS
C.F.P.B Regulation X which implements the Real Estate Settlement Procedures ACT RESPA ensures that consumers through out the nations are provided with more helpful information about the most of the mortgage settlement and protected form unnecessarily high settlement charges cause by certain abusive practices.
Gift
Cannot be from agent
Four C's lenders have referred to:
Character the measure of willingness to make on time payments, Capacity the measure currently earnings and job history, Credit Scores from Experian, Equifax and Transunion. Capital the sum of all assets, Collateral is the Value that can be pledge as security for repayment of the loan.
Four C's of Credit
Character, Capacity, Capital and Collateral
Office of the Comptroller of the Currency (OCC)
Charters, regulates, and supervises national banks and federal savings, associations as well as federal branches and agencies of foreign banks.
Servicing
Collecting monthly payments, maintaining records of payments and balances, collecting and paying taxes and insurance and managing escrow and impound funds, remitting funds to the note holder, and following up on delinquencies is defined as Servicing
Major H.U.D. Program
Community Development Block Grants C.D.B.G, Home Investment Partnerships program, Rental assistance, Public or subsidized housing, Fair Housing public education and enforcement, Ginnie Mae.
Conforming vs Jumbo Loan
Conforming Loan limits for Fannie Mae and Freddie Mac Conforming- the dollar amount falls on or under the dollar amount Jumbo - The dollar amount if above the dollar amount
REIT Real Estate Investment Trust deals with Commercial
Congress created REITs in the U.S. in 1960 to make it possible for small investors to invest in larger commercial properties by purchasing shares in the organization that owns the real estate.
Congress created the Federal Housing Administration in?
Congress created the Federal Housing Administration in 1934
Supply can be restricted by a number of factors including:
Construction cost as labor and material cost increase, supply may be constricted.
Loan Estimate Form
Delivered 3 business days after receiving consumer's loan application
Servicing disclosure statement is federally related
Disclosure must be given within 3 days whether the servicing of the loan may be assigned, sold or transferred, A written acknowledgment that the applicant has read and understood the disclosure, evidenced by the signature of the application
Section 8 of RESPA and Regulation X Prohibition against kickbacks and unearned fees
Disclosure/Notice is given to consumer at the or before the time each referral is made. The disclosure must be provided on a separate piece of paper no later than the time of each referral or if the lender requires use of a particular provider, the time of the loan application.
The __ is the interest rate a reserve bank charges eligible financial institutions to borrow funds on the a short-term basis
Discount rate. The Discount rate is the interest rate a reserve bank charges eligible financial institutions to borrow funds on the a short-term basis
Interest rate are affected by a number of factors that impact real estate
During periods of high inflation, lenders are less willing to commit to long-term mortgages with the fear that holding a portfolio of below market mortgage is a risky business for them.
Equal Credit Opportunity Act ECOA
ECOA originally passed in 1974 ensures that all consumers are given an equal chance to obtain credit. The ECOA covers all creditors who regularly extend credit and impacts professionals, such as residential mortgage loan originators who are involved in granting credit.
The country's economic performance is influenced by may factors
Economic performance abroad, fiscal policy determined by the legislative and executive branches of the government, and monetary policy carried out by the federal reserve.
Supply can be restricted by a number of factors including:
Economics affect supply in that the monetary policies of the federal reserve and the fiscal policies of the United States Congress affect the availability of funds in the market place.
Which of the following is NOT a function of the Department of the Treasury?
Enforcing Federal Finance and tax laws
Mortgage Banker
Entities which provide their own funds for the purpose of providing mortgage financing, selling or arranging loans to be delivered to larger investor.
Established in 1968, __________ operates a mortgage-backed securities program designed to facilitate the flow of capital into the housing industry. a. Freddie mac b. Ginnie Mae c. Fannie Mae d. Farmer Mac
Established in 1968, __________ operates a mortgage-backed securities program designed to facilitate the flow of capital into the housing industry. b. Ginnie Mae
Monetary inflation
Excess of money supply in the market the result is Monetary Inflation. Often this is caused when government Central Bank try to make up for an economic shortfall and print more money, then infuse it into they system even though the market for goods and services doesn't not necessarily increase at the same time.
Exemptions from R.E.S.P.A
Exemptions: Secured by parcel 25 acres or more, whither or no the property is improved. Temporary Loans Such as construction loans. ect.
secondary market
Exists for the purchase and sale of EXISTING MORTGAGES to investors. It is designed to provide greater liquidity to the residential real estate market by providing for the a steady supply of funds from investors.
3 major credit data repositories
Experian, Equifax and TransUnion
The Federal Deposit Insurance Corporation FDIC
F.D.I.C. preserves and promotes public confidence in the U.S. financial system by insuring deposits in banks and thrift institutions for up to $250,000.00 by identifying, monitoring and addressing risk to the deposit insurance funds.
Federal Housing Administration F.H.A 1930
F.H.A 1930's marked The US government first Major Direct Involvement is the residential in the residential finance market
Federal Open Market Committee (FOMC)
F.O.M.C sets the fed's monetary policy, which is carried out through the trading desk of the Federal Reserve Bank of New York.
The fair credit reporting act FCRA
FCRA Fair Credit Reporting ACT sometimes called the Fair Credit Reporting Dispute Act. is a federal law designed to protect consumes against unfair credit reporting practices and protect credit privacy.
Federal Deposits Insurance Corporation FDIC
FDIC preserves and promotes public confidence in the U.S. financial system by insuring deposits in banks and thrift institutions for up to $250,000.00
Federal housing administration
FHA the 1930s mark the government's first major direct involvement in the residential finance market
conforming
FHF Maximum Conforming Loan Limits for Fannie Mae and Freddie Mac - if the dollar amount falls on or under the Maximum base conforming loan limits for properties. Per General Loan Limits Chart
FHFA Maximum Conforming Loan Limits for Fannie Mae and Freddie Mac
FHFA uses an October to October percentage increase/decrease in average housing prices in the Monthly Interest Rate Survey.
Federal Home Loan Bank FHLB System
FHLB Federal home loan banks are a system of regional banks from which local lending institutions everywhere in America borrow funds to finance housing, economic development, infrastructure and jobs.
Major participants in the SECONDARY Market
Fannie Mae also known as the Federal National Mortgage Association, Freddie Mac Also known as the Federal Home Loan Mortgage Corporation and Ginnie Mae the Government National Mortgage Association are the largest entities in the secondary mortgage market.
Federal Fair Housing Hud's programs to prevent housing discrimination through public education and enforcement are administered by the Assistant Secretary for Fair housing and Equal Opportunity F.H.E.O.
Federal Fair Housing statues prohibit housing discrimination based on race, color, national origin, sex, religion, families with children and disabilities.
The demand for real estate is affected by: Federal Government Policy
Federal Government Policy effects demand in several ways, federal income tax policy favors home ownership by allowing the deductions of home mortgage interest and property taxes and Federal Reserve monetary policies can expand or constrict.
Freddie Mac
Federal Home Loan Mortgage Corporation
Fannie Mae
Federal National Mortgage Association- It address imbalances of mortgage credit among regions of the U.S by making funds available to capital deficient areas of the country to finance new mortgage originations.
Monetary Policy is managed by the FEDERAL RESERVE
Federal Reserve decisions that shape the economy by influencing interest rates and the supply of money
Truth in Lending Act (TILA) enacted on May 29, 1968
Federal government regulates the lending practices of mortgage lenders through this act.
The supply of money has an impact on economic cycles and real estate values.
Federal, State and local government borrow large sums of money every year. This borrowing on the part of the government affects the supply of funds that are available to non-governmental borrowers, including business and consumer.
Home Mortgage Disclaimer Act H.M.D.A
Home Mortgage Disclaimer Act H.M.D.A was enacted by congress in 1975 and was implement by the Federal Reserve Boards Reg. C in 2011 Reg. requires lending institutions to report public loan data. Transferred to the Consumer Financial Protection Bureau CFPB
Veterans Loan Programs VLB Programs
Home loan program, Texas Veterans Land Loans, Housing assistance Program, Home improvement loan, Texas Home Equity Loans.
Office of public and Indian Housing
Hud assists low income households with rental subsidies in the private sector primarily through Section 8 certificates and vouchers, through the Office of Public and Indian Housing.
federal funds rate
Is the rate that the Federal Reserve charges banks for unsecured loans, most of the which are for a very short term sometimes over night. Banks use these short term loans to meet their liquidity requirements when withdrawals threaten to exceed cahd on hands
Municipal bonds are:
Issued by local governments to raise money for roads, bridges and other construction projects
Supply can be restricted by a number of factors including:
Land Cost, Construction, Taxation, Economics, Local Government Building codes and zoning
Supply can be restricted by a number of factors including:
Land cost may increase as land for residential properties becomes scarce as the cost of vacant land are available for developments increases.
Through which avenue does the U.S. Treasury promote economic growth?
Legislation tax cuts to stimulate the economy, Policies that support job creation, giving grants to government enterprises.
Life insurance companies are funded by premiums paid by those insured.
Life insurance companies are funded by premiums paid by those insured.
The demand for real estate is affected by: Transportation Systems
Transportation systems have a direct effect on value. The expansion of a freeway or light rail system makes residential development of raw land feasible.
Fiscal Policy is under U.S. Treasury
U.S. Treasury- which relates to Federal Government Spending. Government spending is approved by the U.S. Congress. The U.S. Treasury is responsible for raising money to support the spending decision for congress by raisin taxes and increasing borrowing.
U.S Department Of Agriculture USDA 502 loan
USDA The program offers 100% financing zero down payment for qualified borrowers. Only used for Primary residences only. No Second homes or investors finance
U.S. Department of Agriculture (USDA)
USDA U.S department of agriculture Rural Development Guaranteed Housing Loan program, more commonly referred to as a USDA Loan or Section 502 Loan.
Correspondent Lender
Usually smaller in scale than mortgage bankers or brokers, these lenders typically extend loans with their own funds, at their own risk.
Texas Veterans Loan Program VLB
VLB home loan program The Texas Veteran's Land Board Housing Assistance program is a benefit that every buyer with a Military background should consider.
What percentage of net income does an Estate REIT distribute to the investors in the form of dividends? D. 95 - 100 %
What percentage of net income does an Estate REIT distribute to the investors in the form of dividends? D. 95 - 100 %
Real Estate Bonds
When an individual purchases stock in a corporation, he or she acquires an ownership interest in the firm. Stocks are therefore known as equity investment because the owner of the stock has an ownership interest.
Monetary inflation
When there is an excess of money supply in the market the result is monetary inflation.
How inflation affects real estate pricing and values
When there is high demand for housing and not enough housing available for purchase, then the housing prices will rise.
Which act increased the insurance coverage on all federally insured credit union accounts up to $250,000.00? a. community reinvestment act b. equal credit opportunity act c. SAFE act d. Dodd-Frank Wall Street
Which act increased the insurance coverage on all federally insured credit union accounts up to $250,000.00? d. Dodd-Frank Wall Street
Which of the following types of liens is one that is freely given, usually as collateral for a loan. a. Voluntary Lien b. Involuntary Lien c. Specific Lien d. Statutory Lien
Which of the following types of liens is one that is freely given, usually as collateral for a loan. a. Voluntary Lien
Which statement regarding savings loans is INCORRECT? a. Savings and loans make loans for construction b. Savings and loans have no state or federal charters c. Savings and loans are usually locally owned and privately managed.
Which statement regarding savings loans is INCORRECT? c. Savings and loans are usually locally owned and privately managed.
Acceleration Clause
a statement in a credit contract that requires you to repay the entire loan immediately if you miss a payment
Ad valorem
according to value
supply and demand
an economic concept that states that the price of a good rises and falls depending on how many people want it demand and depending on how much of the good is available supply
The twelve Federal Home Loan Bank Act
are a system of regional banks from which local lending institutions everywhere in America borrow funds to finance housing economic development, infrastructure and jobs.
supply and demand
are perhaps the primary determinants of real estate values. When the demand for real estate is high and the supply low, prices in the market place go up. Likewise, prices decline when the supply is high and demand is low. The real estate market doesn't not respond as quickly to changes in supply and demand as other products because of lag time
The Department of The Treasury Department Office
are primarily responsible for the formulations of policy and management of the departments as a whole, while carry out the specific operations assigned to the department.
Late payment penalty
are provisions of real estate notes and provide for the charging of a late fee when a payment is made beyond its due date.
Secure and Fair Enforcement for Mortgage Licensing Act SAFE Act was signed in 2008
by President Bush This constitutes a major new housing law that is designed to assist with the recovery and the revitalization of America's residential housing market; from modernization of the Federal Housing Administration FHA.
Mechanic's and Materialman's lien
can be found on a open tile, tile company help find a M&M Lien
Which refinancing option does HARP offer?
change from an adjustable to a fixed rate mortgage, lower interest rates, shorter term loan.
Rate and Discount points
charged on a loan are a function of many factors, including the prevailing rates in the market the type of property being financed, the term of the loan and the borrowers credit, income and down payment.
residential mortgages are divided into two categories
conventional loans and government loans
TEXAS HOME EQUITY LOANS HELOC
in 2003 the 78th Texas Legislature adopted and voters approved a constitutional amendment which addressed certain concerns pertaining to home equity loans and allowed home equity lines of credit.
character
is a measure of willingness of a borrower to make on time payments.
A contract of Deed also known as a land contract, same is owner finance
is a sales contract between buyer and seller. In the contract the buyer agrees to make regular payment to the seller. Tile stays in the sellers name till all payment are made.
One-point discount
is an up front payment of interest paid by borrowers to reduce the interest rate on the loan
demand-pull inflation
is created when there is more money in the market and less goods for sale.
Fiat Money
is currency that is not backed by any precious metals at all. By 1971, all currency in the united states was converted to fait money.
Secure and Fair Enforcement for Mortgage Licensing Act SAFE Act
is designed to enhance consumer protection and reduce fraud.
United States Treasury
is primarily responsible for raising funds to finance the operations of the United Stated Government, While the Federal Reserve is responsible for the nation's monetary policy, the Treasury's primary mission is the management of fiscal policy.
collateral
is something of value that can be pledge as security for repayment of the loan
Federal Reserve System
is the central banking system of the United States, The Federal Reserve most critical role is to keep the economy healthy through the proper application of monetary policy.
Back Ratio
is the ratio of the borrowers total recurring monthly debts, including such obligations as the house payments, payments on all installments debts, monthly payments on all junior liens.
Capaital
is the sum of all assests that borrower has accumulated
monetary policy
is to influence the country's economic performance in order to promote stable prices, maximum sustainable employment, and steady economic growth.
Front Ratio
is used to qualify a borrower for a loan based upon the proposed house payment and his or her gross monthly income GMI. The house payments is the monthly payment of principal, interest, taxes and insurance P.I.TI. In conventional lending, a font ratio of 28 % means that the house payment P.I.T.I cannot exceed 28% of the borrowers gross monthly income
Portfolio loan
loan not intended for resale on the secondary market. Lend lends the money at their own risk.
the basic function of the department of the Treasury include:
managing federal finances, collecting taxes duties and monies paid, currency and coinage, managing government accounts and public debt, supervising, advising on domestic and international financial, monetary, economic, trade and tax policy, enforcing federal finance, and tax laws, investigating and prosecuting tax evaders.
Servicing disclosure statement
may be sent by hand delivery or if the applicant agrees by fax, e-mail or other electronic means.
cost-push inflation
occurs when the costs of production and offering services increase, thereby causing manufacturers and tradespeople/vendors to raise their prices accordingly.
According to the Taxpayer Bill of Rights, taxpayers have the right to:
pay no more than the correct amount of tax, be informed, privacy
Common occurrences that can result in foreclosure include
payment delinquency, failure to pay property taxes, failure to maintain the mortgage property, failure to keep the property properly insured, and in Texas failure to pay your home owners associations dues.
Generation Z Digital Natives Millennials 1981-1997
people in this group were born into a world that already was full of electronic gadgets and digital technologies such as the Internet and social networks
The lower the rate offered the borrower, the higher the charge for discount points.
repeat: The lower the rate offered the borrower, the higher the charge for discount points.
Secure and Fair Enforcement for Mortgage Licensing Act (SAFE Act)
seeks to project consumer from incompetency, fraud, and other abuses by ensuring that individuals acting as RMLOs receive.
Great Recession
severe economic downturn that lasted from late 2007 through mid-2009
Real Estate Mortgage Investment Conduit (REMIC)
the two largest issuers of REIMICs are Freddie Mac and Fannie Mae. REIMIC are complex investment vehicles that have important tax consequences, and are generally purchased by sophisticated investors who understand the risk.
If a Triggering Term is used
there must be a Disclaimer
Secure and Fair Enforcement for Mortgage Licensing Act SAFE Act was signed in 2008
to foreclosure prevention and enhancing consumer protections. The Safe and Secure Fair Enforcement for Mortgage Licensing Act. SAFE is a key component of HERA
HUDS Program Community Development Block CDBG
to help communities with economic developments, job opportunities and housing rehabilitations
United State Mint
was created by congress in 1792 and became part of the Department of the Treasury in 1873. The primary mission of the United States Mint is to serve the American people by manufacturing, distributing, and circulating precious metal coins.
Government National Mortgage Association Ginnie Mae
was established in the United States in 1968 to promote home ownership.
Interstate Land Sales Full Disclosure Act
was passed by Congress in 1968. The Act was passed to protect consumers from fraud in the sale or lease of land.
The Dodd-Frank Wall Street reform and Consumer Protection Act
was signed into law by president OBAMA in 2010, in response to the worst financial crisis in the United States since the Great Depression.
The most single most important determination of value in residential real estate is the size of the employment market.
while potential buyers have preferences regarding location, climate, scenic views and other desirable characteristic, jobs drive the demand for housing in most markets.
The department of the Treasury is organized into two Major Components
1. The departmental Offices 2. The Operations Bureaus.
Federal Open Market Committee F.O.M.C
Sets the Fed's monetary policy, which is carried out through the Trading Desk of the Federal Reserve Bank of New York
yield
The return is a YIELD and it represents the money earned on an investment.
Monetary Policy The fed uses 3 primary monetary policy tools to influence the cost and availability of credit.
1. Open market operations 2. the discount rate 3. reserve requirements
Mortgage Lending Activities order:
1. Origination 2. Send to Originator R.M.L.O 3. Processing the loan 4. Underwriting evaluating the application 5. Closing/Settlement all documents are signed and submitted 6. Funding funds transferred to tile or escrow company. 7. Servicing
coverage of R.E.S.PA
1. A one-to-four family structure including individual units of condominiums and cooperatives, either existing or to be constructed on the real property, using loan proceeds.
RESPA Real Estate Settlement Procedures Act ABA Affiliated business Arrangement
Affiliated Business Arrangement ABA to permit affiliated business arrangements ABA under certain conditions , while retaining the general prohibitions against the giving and taking of referral fee.
Residential Lending are divided into two broad categories:
Conventional Loans and government loans. conventional Loans- all loans that have no federal government guarantees or insurance. Government loans are F.H.A, VA, and USDA
Credit Unions are not for profit organizations that exist to serve their members. Unlike banks, credit unions return surplus income to their members in the form of dividends.
Credit Unions are not for profit organizations that exist to serve their members. Unlike banks, credit unions return surplus income to their members in the form of dividends.
What is fiat money?
Currency that is not backed by any precious metals.
Gift
Gift funds are most often used for down payments funds. Any Funds provided as a gift must be accompanied by a letter from the gifting party, stating the amount of the gift and that the gift isn't a loan.
HUD's Program Ginne Mae
Ginne Mae a wholly owned federal corporation within HUD, pioneered the mortgage-backed security. These government backed securities lower market interest rates and create homeownership incentives.
Ginnie Mae
Government National Mortgage Association
The Supply Demand for real estate is affected by:
Growth in employment, Transportation systems, Personal Preference, Availability to Credit, Federal Government Policy.
TEXAS HOME EQUITY LOANS- Home Equity Line of Credit HELOC
HELOC Home equity line of Credit, as form of an open-end account that may be debited form time to time under which credit may be extended from time to time.
Home Mortgage Disclaimer ACT HMDA
HMDA Data collection of Ethnicity, Race and Sex under appendix b to regulation c provides instructions how to collect ethnicity, race and sex information.
Home Mortgage Disclaimer Act HMDA
HMDA data collected on or after 2018, covered institutions will collect, record, and report additional information about originations of purchases of and application for covered loans.
HUDS Program FHA The Federal Housing Administration- The lenders bear less risk because FHA will pay a claim to the lender in the event of a homeowners default.
HUDS Program FHA The Federal Housing Administration- The lenders bear less risk because FHA will pay a claim to the lender in the event of a homeowners default.
HUDS Program FHA insures mortgages on single-family and multifamily homes including manufactured homes and hospitals.
HUDS Program FHA insures mortgages on single-family and multifamily homes including manufactured homes and hospitals.
HUDS Program The Federal Housing Administration FHA is insured by the Federal Government
HUDS Program The Federal Housing Administration FHA is insured by the Federal Government
In order to qualify for exemption from capital gains, the property must have been the primary residence for two of the previous _____ years
In order to qualify for exemption from capital gains, the property must have been the primary residence for two of the previous 5 years.
Two commonly used definitions of money from the Federal Reserve: M1
M1: is defined as the sum of currency held by the public and transaction deposits at depository institutions, which are financial institutions that obtain their funds mainly through deposits from the public, such as commercial banks savings and loan associations, savings banks and credit unions.
Two commonly used definitions of money from the Federal Reserve: M2
M2: is defined as M1 plus savings, deposits, small denomination time deposits, those issued in amounts of less than $100,000.00 and retail money market mutual fund shares.
Majority of loans are sold in the secondary market, some loans may be Retained as Portfolio Loans.
Majority of loans are sold in the secondary market, may of them are Retained as Portfolio Loans.
The basic functions of the Department of the Treasury include:
Managing federal finances, collecting taxes, currency and coinage, managing government account, supervising national banks and thrift institutions, advising on domestic and international financial, monetary, economic, trade and tax policy, enforcing federal finance and tax laws, investigating and prosecuting tax evaders.
HUDS Program Rental Assistance
Rental Assistance for low-income individuals and families
Mortgage rates are affected by events in the global financial market.
Repeat: Mortgage rates are affected by events in the global financial market.
RMLOs Registered Mortgage Loan Originator must be registered or licensed with Texas SML. Registered RMLOs are individuals who are associated with depository institutions such as banks and Federally insured credit unions.
Repeat: RMLOs Registered Mortgage Loan Originator must be registered or licensed with Texas SML. Registered RMLOs are individuals who are associated with depository institutions such as banks and Federally insured credit unions.
Annual Escrow Statement
Required by RESPA, this disclosure on the amounts needed to cover escrow disbursements is due annually. Within 30 days of the completion of the computation year.
Texas Department of Savings and Mortgage Lending SML
SML Texas Department of Savings and Mortgage Lending is an agency of the state of Texas and is subject to the oversight and under the jurisdiction of the Finance Commission of Texas
Texas Department of Savings and Mortgage Lending SML regulatory responsibility
SML responsibility in two key areas: 1. The Chartering, regulation and supervision of the states thrift industry, Saving and Loan. 2. The licensing/registration and regulation of the state's mortgage industry.
Primary mortgages and Secondary Mortgages
Secondary mortgages are subordinate to the Primary Mortgage. Primary go first.
R.E.S.P.A Regulation X Section 8 Prohibition against kickbacks and unearned fees
Sect. 8 Prohibition against kickbacks and unearned fees The only thing of value that is received form the arrangement other than reasonable payments for goods, facilities or services actually furnished.
R.E.S.P.A regulation X Penalties for Section 8 Violations
Sect. 8 Prohibition against kickbacks and unearned fees. any person who violate the prohibitions of limitations of RESPA section 8 shall be fined not more than $10,000.00 or imprisoned for not more than one year.
U.S.D.A. Loan The single family housing direct home is also known as?
Section 502 Direct Loan Program
Federal Funds Rate F.F.R.
The interest rate banks charge one another on overnight loans made out of their excess reserves. The FFR is the interest rate targeted by the FEd through it's open market operations.
The lender is know as the mortgagee
The lender is know as the mortgagee. Mortgagee gets the Fee. Mortgagee gets the Money money money
The market where borrowers and mortgage lenders come together to create and negotiate terms of a mortgage transactions is called Primary Mortgage Market.
The market where borrowers and mortgage lenders come together to create and negotiate terms of a mortgage transactions is called Primary Mortgage Market.
The money the mortgage company uses comes from the sale of _____
The money of mortgage company uses comes from the sale of Bonds.
mortgage companies
The money that mortgage companies use to make loans comes from the sale of bonds, which is considered a business transaction, not a savings account deposit procedure.
Real Estate Settlement Procedures X Penalties
The penalty imposed shall be $100.00 and in the Case of any penalty determined the $100,000.00 limitations shall not be apply.
Federal reserve, According to the site, what is the prime rate?
The prime rate is an interest rate determined by individual banks.
Funding
The process of transferring funds to a title or escrow company for disbursement is called funding
Interstate Land Sales Full Disclosure Act.
The purchase agreement gives the purchaser a seven-day period in which the purchase can be canceled.
Federal Home Loan Bank Act
a law, enacted in 1931, that lowered home mortgage rates and allowed farmers to refinance their loans and avoid foreclosure
A loan with no discount points is known as a
a loan with no discount points is known as a par loan
capacity
a measure of financial ability to repay a loan, through current earnings and job stability
Conventional Loan
a mortgage agreement that does not have government backing and that is offered through a commercial bank or mortgage broker
Assumption Clause
a new borrower to take over the payments on an existing loan, under specified terms and conditions. The loan with Credit approval.
record retention requirements for the TILA-RESPA
for all other evidence of compliance with the Integrated Disclosure provisions of Regulation's Z creditors must maintain records for 3 years.
The demand for real estate is affected by: Growth
growth in employment, transportation systems, personal preference, availability of credit, federal government policy
The demand for real estate is affected by: The availability of credit
has a direct impact on demand. the pool of available buyers expands in times o easy credit and contracts when credit standards are tightened.
US Department of Agriculture USDA 502 loan
has only one loan repayment plan, offering 30 year fixed rate mortgage only.
Record retention requirement for the TILA-RESPA Rule
the creditor must retain copies of the closing disclosure and all documents related to the closing disclosure for 5 years after consummation.
Final R.E.S.P.A-T.I.L.A integrated disclosures 3 pages - Loan Estimate and Closing Disclosure 5 page
the final rule mandates the use of 2 disclosures, the three page Loan Estimate which replaced the Good Faith Estimate G.F.E and the initial Truth in Lending Disclosure, and the Five page closing disclosure which replaced that help consumers to understand the key features, cost, and risks of the mortgage for which they are applying.
The lower the rate offered by borrower
the higher the charge for discount points
federal funds rate
the interest rate banks charge each other for overnight loans
Encumbrance
the legal method of removing an encumbrance is to obtain a release. Must work with the title company for a release.
discount rate
the minimum interest rate set by the Federal Reserve for lending to other banks.
Primary Mortgage Market
the mortgage market in which loans are originated, consisting of lenders such as commercial banks, savings associations, and mutual savings banks.
reserve requirement
the percentage of deposits that banking institutions must hold in reserve
origination
the process of creating a new mortgage loan, including all steps taken by a lender to attract and qualify a borrower, are considered Origination
