Sources of Financing in GA

Which of the following types of properties may be eligible for purchase by Freddie Mac?

A triplex purchased as a primary residence

Which of the following is an example of a loan that originated in the primary mortgage market?

ABC Bank loan

Federal Home Loan Bank (FHLB)

Advances (or loans) its member banks money in exchange for collateral (usually mortgages)

Savings and loan associations

Also called thrifts, these specialize in taking in savings deposits and then lending out through mortgages and other loans. They're required to keep their commercial lending at or under 20%, so they're very much tied to consumers and mortgage loans.

Commercial banks

Bank of America, Chase, Citigroup, and the like—make consumer and business loans, offer investment products, and take deposits.

Mortgage Banker

Can have varying interest rates Stay involved with the loan for its entire lifecycle Most are private enterprises Paid through fees from origination and servicing loans Originate their loans Loan offerings limited to those offered in-house

Ginnie Mae

Guarantees MBSs that contain loans insured or guaranteed by a U.S. government agency

Kathy decided to borrow funds from her retirement account to fund the down payment on her new house. Which of the following is true about this loan?

If Kathy's loan is through an employer-sponsored pension plan and she loses her job, the loan will become payable immediately.

How does Ginnie Mae function differently than Fannie Mae and Freddie Mac?

It doesn't buy loans or issue mortgage-backed securities.

Credit unions

Member-based cooperatives that provide credit for auto loans and home loans. They take deposits and offer savings vehicles, money markets, and the like. Their rates tend to be pretty competitive.

Which of the following types of residential dwellings do life insurance companies purchase from the secondary mortgage market?

Single-family on one lot

Investment groups

Some of these lend specifically to people who want to avoid conventional financing, such as other investors.

Insurance companies

Some of these, like Nationwide, also finance mortgage loans.

Mortgage lenders

These include mortgage bankers, mortgage brokers, and mortgage loan originators, and concentrate on mortgage lending.

Seller financing

This may be an option in which a buyer obtains financing from the property seller.

Mortgage Broker

Work with many lenders Many potential interest rates Don't service the loan beyond placement Get paid a placement fee for matching borrower with a lender Seldom invest in a loan

Mortgage bankers

actually do the lending. They have in-house loan processors and underwriters. Wells Fargo Mortgage is an example. Mortgage bankers can close fairly quickly because they fund their own loans, but their choice of offerings is narrow because it's limited to their own products.

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?

an advance

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 smaller lending institutions (thrifts).

When Fannie Mae purchases a loan, they pay the loan originator a(n) ______ fee.

collection

Which of the following is a form of commercial bank revenue related to mortgage financing?

demand deposits

primary mortgage market

is where lenders and borrowers come together to originate, negotiate the terms of, and fund a mortgage loan. A primary lender may be your hometown bank, a national chain bank, a private mortgage lender, or any one of several other lenders

Which of the following are types of computerized loan origination systems (CLOs)?

open and closed

Farmer Mac

purchases agricultural loans and loans from rural lenders.

mortgage brokers

work with multiple lenders to search for and negotiate the best deal for a particular borrower's circumstances. They don't loan the money out themselves, so they're not tied to a specific suite of loan products.