Fl broker - post Ed/30 hr #1

How much can a family member give as a gift for the buyer

$15,000 to each buyer

What is covered in 22 in a mortgage

-Lenders right to call loan due if borrower defaults -Lender has right to cure & reinstate loan -Lenders right to sell prop if default

Hecm facts

-There are no income qualification requirements -FHA covers any negative balance after the sale of the home -Will continue to receive payments as long as they remain in home -No repayment requirement until they no longer live in home

When is VA funding fee waived

-Veterans receive compensation for service connected disability's -Spouses of veteran who died in service -Large down payment

The interest rate reduction finance loan program (Irrr)

0.5 funding fee, no appraisal, no income or employment verification, no COe

What is paragraph 10 of the promissory note

10

How many districts comprise the federal reserve

12

What paragraph on the promissory note describes the schedule of repayment and monthly payment amounts

3

VA DTI Ratio

41%

Which paragraph includes late charges on the promissory note

6

Deed in Lieu

A deed given to the lender to avoid foreclosure and fulfill the obligation to repay the debt; this process does not allow the borrower to remain in the house but helps avoid the costs, time, and effort associated with foreclosure.

convertible feature in arm

Allows borrowers to convert loan to a fixed rate during a specific period

If fed increases the percentage member banks must keep on reserve, what happens:

Banks have less money to use as loans Local economy slows down bc less money is available

NADL Program-Native American direct loan program

Can purchase land by the federal government on behalf of the Native American tribe . the land is reserved for the tribes use -VA is actually lending the money

CRV

Certificate of Reasonable Value- from appraisal Shelf life of 12 months

Bluewater navy Vietnam veterans act

Changed lending guidelines and funding fee requirements through 2022

Straw Buyers - nominee loans

Conceal buyers identity by using another person's name in Credit infomation

If there is a house in crisis what action with the federal reserve take?

Decrease rates

TILA

Effective 1968 Regulates advertising of credit services Requires full disclosure of key information including APR

A veteran must receive a certificate of released to be fully discharge from VA loan applications - true or false

False

Lenders mayadjust the rates at any time interest rates rise - true or false

False

The borrower who assumes a VA loan must also be a veteran - true or false

False

Which entitgeneral acts in the secondary market?

Fannie mae

Federal Open Market Committee (FOMC)

Federal Reserve committee that makes key decisions about interest rates and the growth of the United States money supply

Which act was enacted in 1968 as part of the consumer credit protection act

Federal equal credit opportunity act

harp

Home affordable refinance program/ Loan Program that broke the 80/20 ratio rule usually required as a loan to value and offered favorable interest rates

What happens when the Fed purchases government SECURITIes

Increases The influx of money and stimulates growth

interest rate

Index + margin

Title 2- fha

Insurance for the purchase of resid homes

Title I - fha

Insures for Property improvements Manufactured homes

FHA (Federal Housing Administration)

Insures loans. Established in 1934

What is par 2 of promissory note?

Interest

federal funds rate

Interest rate banks charge each other for loans- usually overnight loans

What is another name for installment sale contract

Land contract

What is paragraph five of the promissory note

Loan charges

ARM- asjustble rate mtg

Loan where interest rate is based on the economic index - consumer price index or US treasury rate

What are advances

Loans the federal home loan bank makes two member banks.

What is a non-recourse loan?

Loans with no personal liability for repayment.

Does a widow of an army corporal who died in service have a funding fee

No

If VA applicant pits more than 20% down, does applicant pay funding fee?

No

Is a jumbo loan conforming?

No

VA Funding Fee

One-time, upfront charge to the veteran receiving a VA loan ff could be reduced if the veteran provides a down payment and could be waived completely if veteran has 10% or higher VA disability. Can be included in the loan

robosigning

Pushing properties through the foreclosure process without closely reviewing the docs

What is the Truth in Lending Act?

Requires lenders to disclose financing terms

Loan that's offered based on home owners equity in which funds are drawn overtime and the bank gains corresponding property ownership

Reverse annuity mortgage RAM

A HECM is what type of fha loan: (Home equity conversion loan)

Reverse loans

With VA loan which Closing cost is paid by the seller

Termite report, broker fees Other costs can be negotiated

prime rate

Thanks use the federal funds rate or discount rate to borrow money from the Fed. Most banks add a percentage to that rate. this is called the prime rate

discount rate

The interest rate on the loans that the Fed makes to banks

What happens when a promissory note is sold

The promissory note is endorse to the new owner of the long

What is a potential causes for a decrease in local economy driven by the Fed

The reserve percentage is increased by the Fed

What is loan processing step of financing?

The step that determines whether or not applicant will get the loan they requested

Novation

The substitution, by agreement, of a new contract for an old one, with the rights under the old one being terminated.

An ARM will have a below market rate for the first year of the loan - true or false

True

The note converts the interest rate in the arm from fixed to adjustable.true or false

True

How much can a veteran ask for seller closing cost concessions

Up to 4%

What is a deed of trust?

Used to secure a note. A deed can carry a rider or an addendum

What is restored and partial entitlement - VA loan

Veteran has used the loan and paid it off can borrow again -If loan has not been completely paid off they may be entitled to a partial entitlement Can purchase a second home if loan has been paid

Equity Skimming

When an investor receives title to a property— often by using a straw buyer—doesn't make the mortgage payments, and usually rents out the home until foreclosure occurs.

Disintermediation

When more funds are withdrawn from financial institutions then are deposited Means banks have less money to lend to others Less credit means less spending causing a slow down in the economy

Are VA loans assumable?

Yes - because they do not have due-on-sale clauses • VA loans made prior to March 1, 1988 are assumable without the credit check of the new mortgagor • for VA loans made on or after March 1, 1988, the buyer must qualify

What happens when a mortgage lender denies a loan?

You can apply with a different lender.

RESPA (Real Estate Settlement Procedures Act)

a law requiring full disclosure of closing costs to buyer and seller. Enacted 1974 Loan estimate, closing disclosure, initial escrow statement and annual escrow statement. Include provisions for buyers who are victims of overcharging

discount window

a protection against bank runs in which the Federal Reserve stands ready to lend money to banks in trouble.

What is the borrowers statutory right of redemption

allows a borrowers to reclaim their homes after a foreclosure, but only until a certain point. In a statutory right of redemption, the borrower must pay the foreclosure sale price to reclaim their home.

Hypothecation

the action of pledging real property as security for a debt

open market operations

the buying and selling of government securities to alter the supply of money

leverage

the use of borrowed money to supplement existing funds for purposes of investment

What is form 1003

"universal form residential loan application" - an application for mortgages

Wrap-around Mortgage

A form of secondary financing for the purchase of real property. The seller extends to the buyer a junior mortgage which wraps around the existing in addition to any superior mortgages already secured by the property.

Straight Loan

A loan in which only interest is paid during the term of the loan, with the entire principal amount due with the final interest payment.

HOEAPA-Home ownership in equity protection act

Amends tila Requires full disclosure of key information as well as pre-loan counseling. Restricts fees

Streamline Refinance-fha

An option for borrowers who want to take advantage of low interest rates

What happens when fed decreases the percentage that member banks must keep on reserve?

Banks keep less money in reserve therefore local economy gets better bc more money is available

What is paragraph four of the promissory note

Borrorowers right to pre-pay

What is paragraph six in the promissory note

Borrowers failure to pay as required

What is a conforming loan

Conforms to FNMA/FDMC guidelines

commercial paper

Consumers and business owners need funds to purchase personal property or to meet short term needs, banks make loans to these consumers Used as a collateral

How do you calculate fully index rate

Current index plus margin

What does it mean if the Fed increases reserve requirements

Member banks must keep more assets on deposit at the reserve bank

Cap rate formula

NOI / Purchase Price A way of quickly valuing income producing properties in comparison to other properties

Which type of participation agreement involves more than one mortgagee as owner of a finance instrument in which each receives an equal share of the mortgage payment?

Partnership Among mortgagees

What type of partnership does each mortgagee receive a share of the mortgage payment

Partnership among mortgagees

What type of partnership is there more than one mortgage or as owner

Partnership among mortgagors

What type of partnership is a real estate mortgage investment conduit

Partnership between mortgagees

What type of partnership is a cooperative

Partnership between mortgagors

margin

Percentage (points)charged by lender above index rate Has cap

How do you calculate va funding fee

Percentage of loan amount Manufactured home funding feet is 1%

What happens when the Fed sells government securities

Shrinks the amount of available funds for lending and slows growth

What is the purpose of the federal reserve system

The Fed regulates the US depository institutions

When does a loan estimate expire

10 days

How long does a bank provide Kendra with a loan estimate when she applies

3 bus days

What type of fee does Fannie Mae pay a loan originator for a loan

A collection fee

Who is trustee in a deed of trust

A neutral 3rd party That holds title into loan is paid

Who is the trustee in a deed of trust

A neutral third-party

Direct Endorsement Program

A program in which lenders are able to process FHA insurance applications without prior approval of the FHA

HECM

A reverse mortgage. The Home Equity Conversion Mortgage is specifically a government reverse mortgage program. If more equity is paid out then remains the homeowner doesn't have to make up the difference

What is the cash out refinance va program

Allows homeowner to receive cash from the equity of their home

What's another name for a land contract

An installment sale contract

What are securities?

Financial Assets that companies sell to raise capital. Investors purchase them hoping to earn a high rate of return. Long and short term debt instruments

What happens during the oversupply phase

Homes sell for high higher prices lots of buyers and new construction

What qualifying ratios are used in a VA loan

Housing ratio and total debt obligation

Applying caprate to net operating income is a way to determining a properties

Investment

Mechanic's Lein (Construction lein)

Involuntary and specific lein

How can a FH a loan fire pay the annual mortgage insurance premium

Pay 1/12 of a monthly separate from his mortgage payment

Who holds legal title when mortgage is used

Property owner

If a loan has been foreclosed on which lean takes priority

Property tax and then first in first paid

What type of market when you see a property undervalued and a large supply of homes in the market

Recovery

Alienation Clause (Due on Sale Clause)

Says you must repay your mortgage if you sell your home to a new owner (loan is not assumable)

When the treasury collects few were fun than what is needed to pay the government bills what will they do

Sell securities

RESPA prefer Hibbetts kickbacks between which parties

Settlement service providers

Which agency sets the guidelines for qualified mortgages

The consumer financial protection bureau

Security instruments that pledge property as collateral for a loan

The mortgage and the deed of trust

A short term security issued by the treasury that has a maturity of one year or less is called

Treasury bill

Which program allowed US treasury to spend billions of dollars to stabilize The financial system, boost credit market, help families avoid foreclosure and promote economic growth?

Troubled asset relief program

What are factors of money

Unit of value, store of value, medium of exchange.

What is recasting of a loan?

When an outstanding loan balance is reconfigured

Mutual banks are created to serve who during the mid-19 century

Workers

In a deed of trust who is the beneficiary

lender

VA - RESIDUAL INCOME

Amount of net income remaining after deducting all debts and bills then taking that number and look further into geographic area and number of family members

What is in paragraph eight of the promissory note

Applications of person under this note

What is a VA certificate a reasonable value

Appraisal report fr VA certified appraiser

CRV (certificate of reasonable value)

Appraisal required on VA loans.

Dintermediation

Banks are seeing more withdrawals than deposit

What is paragraph one of a promissory note

Borrowers promise to pay

Property flipping occurs when:

Bought, Appraised for more than it's worth and sold within a short time frame. Kickbacks are common place

Silent Second

Buyer negotiates a second mortgage with the seller but its not disclosed to the lender

Which of the following is included in hMDA data

Census tract information

What loan typically takes the longest to close

Commercial

What do you do to determine debt coverage ratio

Divide net income by debt service

When a promissory note is sold how is ownership transfered

Endorsement by seller of the note

Who regulates reserve requirements and rules and regulations of banks

FHLBanks