Unit 1: The Primary Mortgage Market and Institutional Funding Sources

loan servicing

Collects mortgage payments, processes tax and insurance payments, and prepares records for other lenders

loan origination

Collects origination fees, discount points, and monthly interest payments from borrowers

interim

Construction loans are a type of _______ financing.

preparing tax records

How does a lender in the primary mortgage market earn money when a loan is originated?

non recourse clause

In a foreclosure or short sale, one clause in the security instrument may save a borrower from that evil deficiency judgment. What clause is it?

primary mortgage market

In which market do lenders that originate real estate loans operate?

private

Mortgage bankers are mostly ______ enterprises.

packaging and selling loans

Sells the flow of principal and interest to investors

surety

Under the SAFE Act, every mortgage loan originator must be fully licensed and carry a mortgage ______ bond.

demand deposits

What's the primary source of funds for commercial banks?

short sale

in this, the lender will report any amount forgiven on the loan to the IRS on a 1099

construction loan

local company wants to build a new office building. What type of loan will it most likely be seeking from its commercial bank?

deficiency judgment

this allows the lender to recover losses incurred in the foreclosure process.

blanket lien

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