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Title I, Property Improvements

Loan insurance for moderate rehabilitation of properties without a purchase mortgage or refinance

579 or lower

Margo, a mother of three, is in the largest percentage of consumers with a score of _______. Margot's tried unsuccessfully to get approved for loans, but she was issued a credit card that included many extra fees and required deposits.

involuntary, specific

Mechanic's Lien, real property tax lien, special assessment loan

voluntary, specific

Mortgage lien

Mortgage compassion scam

Norman owns a home. He received an unsolicited call from a company offering to greatly reduce Norman's loan payments, for a hefty upfront fee. All they need to get started is the bank account information for the account Norman currently uses to make his payments. What might be going on here?

Length of credit history

Payment history, age of accounts, credit usage rate, inquiries, and _______ are factors considered in calculating a credit score.

Government-Sponsored Enterprises

Private companies such as Fannie Mae, Freddie Mac, Farmer Mac, and the Federal Home Loan Bank that were created by the U.S. Congress to make borrowing easier and more cost effective.

Federal Equal Credit Opportunity Act (ECOA) (1974)

Prohibits discriminatory practices by lenders

Title II Section 203(n)

Purchase of a unit in a cooperative housing project

Title II Section 203(b

Purchase of one- to four-family homes

Title II Section 223(e)

Purchase or rehabilitation of a home in an older, declining urban area

Hybrid REITs

REITs that invest in both properties and mortgages.

Mortgage REITs

REITs that invest in mortgages and mortgage backed securities

Equity REITs

REITs that invest money directly in properties

An advance

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?

Administrative Procedures Act (1946)

Regulates agencies and their roles

Home Mortgage Disclosure Act (HMDA) (1975)

Requires documentation to show that lenders are serving the housing needs of their communities

Truth in Lending Act (TILA) (1968)

Requires full disclosure of the terms and conditions of credit

Secondary Mortgage Market

Secondary mortgage market players (Fannie Mae, Freddie Mac, Ginnie Mae, etc.) purchase loans from local lenders and package and sell them as mortgage-backed securities.

Collateralized Mortgage Obligations

Security made up of mortgages and/or mortgage-backed securities and organized into tranches (security classes).

American Recovery and Reinvestment Act (ARRA) (2009)

Stimulus package created as a response to the economic crisis

The state

The appraiser of Garran's property used the Torrens system to perform a title search. Now a claim has been filed. Who or which entity will be the title guarantor?

They should look for a home in a lower price range.

The house payment Tim and Vickie are considering would give them a housing ratio of 34% and a total debt obligation of 40%. Their credit score is 640. What do they need to change to meet the underwriting requirements for an FHA loan?

Primary Mortgage Market

These are the banks, credit unions, and mortgage companies that provide loans to consumers.

External obsolescence

This could happen if a factory were put in next door that changed and impacted property value.

Calculated Cash to Close

Under which section of the Loan Estimate will you find any credits provided by the seller?

Title II Section 203(h

Victims of disasters may receive 100% financing to reconstruct or replace a damaged home if they file within one year of the disaster.

Spend billions

What did the Troubled Asset Relief Program allow the U.S. Treasury to do in response to the 2007 financial crisis?

Principal only

What does the lump sum payment at the end of an interest-only mortgage loan consist of?

It provides the lender with an accurate opinion of the property's market value.

What is the purpose of the Uniform Residential Appraisal Report?

To notify the borrower that the loan is being resold on the secondary market, and how and where to make future payments

What is the purpose of the loan transfer disclosure?

Reverse annuity mortgage

borrower receives monthly payments, or a lump-sum payment in exchange for ownership of the property. If the loan is not repaid, the bank owns the property.

involuntary, general

income tax lien, deceased persons debt, estate and inheritance tax lien

involuntary, general, and equitable

judgement lien

Wrap-around loans

junior financing instruments that "wrap around" existing debt

Title I, Purchase of Manufactured Housing

Loan insurance for purchase of a manufactured house on a developed lot, to develop a lot for a manufactured home, or both.

Loan Estimate

Loan terms, Projected payments, Costs at closing Closing cost details (loan costs, taxes, prepaids, escrow), Comparison information and other considerations

Conforming Loans

Meet all qualifying guidelines set by Fannie Mae and Freddie Mac, which include:

A short-term lake rental

What type of property is Aileen appraising if she's using the income approach?

A single-family residence built six years ago

What type of property is Valerie appraising if she's using the sales comparison approach?

Fees charged by a lender for processing or originating a loan

What's a loan origination fee?

Amount being borrowed compared to the value of a property (either the appraised value or sales price, whichever is less)

What's a loan-to-value (LTV) ratio?

All recurring (or installment) debt that will last longer than 10 months, such as monthly mortgage, car, credit, and loan payments

What's included in a total debt ratio (a.k.a., debt-to-income ratio, total obligation, back-end ratio)?

Monthly housing obligation, (principal, interest, taxes, insurance), homeowners or condo association fees

What's included in the housing ratio (a.k.a., front-end ratio)?

Recasting

What's the term for a loan modification in which the outstanding loan balance is reconfigured?

Strengthen the housing market to bolster the economy and protect consumers.

When HUD pursues actions that are designed to restore the financial health of the Federal Housing Administration, which of its goals is it supporting?

The state

When the Torrens system is used to perform a title search, who acts as title guarantor in case a claim is filed?

Prime rate

Which interest rate do banks use to offer consumer loans?

It's a specific involuntary lien.

Which of the following describes a mechanic's lien?

Liability After Foreclosure

Which of the following is part of the Other Disclosures section?

The funds are often used for home renovations or to fund a college education.

Which of these best describes a home equity loan?

Home equity loan

lump-sum loan based on accrued equity

Construction loan

open ended; funds are withdrawn at specific construction phases; usually converted to long-term financing when construction is complete.

Home Equity Line of Credit

open-ended loan based on equity, revolving line of credit for a specified number of years

Federal Reserve System

12 reserve district banks, each managed by a board of directors. Board of Governors, seven members appointed by president and confirmed by Senate

Credit union

A bank-like money cooperative where its members can borrow from pooled deposits at low interest rates.

junior lien on the property.

A homeowner has been paying her mortgage for several years and has built up equity. She decides to take out a home equity line of credit because she needs some cash. This credit will create A

New loan

A refinance is always a ______.

Federal Home Loan Bank

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

Pay loan-related closing costs

Besides interest paid over the life of the loan, what responsibility does the buyer have to the lender in a real estate transaction that requires financing?

General and specific

Boris is an appraiser working for the Smith family. They've hired him to perform an appraisal on their six-bedroom house. What two types of data will Boris gather?

Promissory Note

Borrower's promise to repay, Includes amount of principal, interest rate, schedule of repayment, borrower's signature, date of signing

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 thrifts

That the borrower and seller names, the property address, and the sales price are accurate and spelled correctly

Cassie is helping her buyer client, Gus, prepare for closing. What should she encourage him to verify as soon as he receives the form?

Cheyenne will pay less in capital gains taxes by receiving the proceeds from the sale over time, rather than in a lump sum.

Cheyenne is selling the family farm via an installment contract. What is one advantage of selling the farm this way?

FHA, VA, or conventional

Commander Halfback retires after 25 years of service in the Coast Guard. He is looking to buy a home. What type of loan should he use?

740-799

Consumers in the _______ range have an above-average credit score. They tend to qualify for better interest rates than those in the "acceptable" category.

Community Reinvestment Act (CRA)(1977)

Created in response to the practice of redlining

Dodd-Frank Wall Street Reform and Consumer Protection Act (2010)

Creates stricter regulation of financial services industry

Title II, Section 203(n)

Dana and Phil have evaluated their situation, and have decided to purchase a unit in a cooperative housing project. Which FHA loan program might work for them?

Housing and Economic Recovery Act (HERA) (2008)

Designed to address the subprime mortgage crisis. Provisions included the SAFE Mortgage Licensing Act and the Mortgage Disclosure Improvement Act

Yes, for Native Americans on trust lands

Does the VA make direct loans?

Real Estate Settlement Procedures Act (RESPA) (1974)

Eliminates kickbacks and referral fees among settlement service providers

Loan amount, down payment requirement, loan-to-value ratio, and housing debt-to-income ratio

Freddie Mac and Fannie Mae set guidelines for conforming loans. Which of these are qualifying guidelines?

Ginnie Mae

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

(Amount financed / property value) x 100

How do you calculate LTV?

Loan amount x origination rate (divide a percentage by 100 to obtain the rate, so an origination fee of 2% is the same as 0.02)

How do you calculate a loan origination fee?

([Principal + interest + taxes + insurance + association fees] / monthly gross income) x 100

How do you calculate the housing ratio?

(Total of monthly debt obligations / monthly gross income) x 100

How do you calculate total debt ratio?

A neutral third party

In a deed of trust, who is the trustee?

A transfer between parent and child

In which of the following situations is a lender prohibited from enforcing an alienation clause?

Recovery

In which phase of the real estate market cycle would you expect to see property under valued and a large supply of homes on the market?

Partnership among mortgagees

In which type of partnership does each mortgagee receive a share of the mortgage payment?

Closing Disclosure

Loan terms, Projected payments, Costs at closing, Closing cost details & totals, Comparison of amounts on Loan Estimate with Closing Disclosure, Summary of borrow- er/seller transaction details, Additional loan disclosures, Loan calculations, Contact information

Maggie will take over Jim's loan payments without telling his lender she's doing so.

Maggie has a neighbor, Jim, who is facing foreclosure. She likes Jim and wants to help him out, so they agree to do a "subject to" purchase. What does this mean?

Involuntary, general

Susan's cat bit and scratched her neighbor, who's suing Susan. The lawsuit resulted in a judgment against her. Susan does not want to pay the neighbor according to the judgment, so the court placed a lien against her property. How is this lien classified?

Home Affordable Refinance Program (HARP

Which of the following programs broke the normal 80/20 ratio rule usually required as a loan-to-value and offered favorable interest rates?

Moratorium (or forbearance)

Which term describes a lender temporarily agreeing to suspend payments to help the borrower get caught up?

Mortgage REIT

Which type of real estate investment trust derives a portion of its income from interest dividends?

Through a funding fee charged to most borrowers

How does the VA fund the mortgage guarantee program so that lenders can be reimbursed for any losses from borrower default?


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