section 2- mod 5

Credit unions are exempt from:

federal taxation.

Lenders are regulated based on:

fiduciary responsibilities to its customers.

A __________ is not a U.S. citizen, but is temporarily residing in the United States.

foreign national

Life insurance companies are a major supplier of money for:

large commercial loans to developers and builders.

Using the wholesale approach, the more loans a lender purchases, the:

larger the profits through the servicing of revenue.

All of the following are ways to classify lenders, except: fiduciary. semi-fiduciary. non-fiduciary. pseudo-fiduciary.

pseudo-fiduciary.

What is a retirement fund reserved to pay money or benefits to workers upon retirement?

A pension fund

Which of the following is a responsibility of mortgage brokers? Qualifying borrowers Taking applications Sending completed loan packages to the wholesale lender All of the choices apply.

All

Generally speaking, what is the main objective of private investors?

Both the safety of the loan and a high return on their investment

Who contributes to employee pension plans?

Employees and employers

__________ participate in financing real estate by carrying back loans on their own property and by investing in security instruments (mortgages and deeds of trust).

Private individuals

A __________ is a municipal bond issued to finance public works, such as bridges or tunnels or sewer systems. The bond is supported directly by the revenues of the project, such as user fees and other charges generated by a particular public works project.

revenue bond

A developer wants a long-term $3,000,000 loan to purchase and rehabilitate an existing shopping center. What institutional lender is a major supplier of money for large commercial loans to developers and builders?

Life insurance company

__________ operate similarly to savings and loan associations and are located primarily in the northeastern section of the United States.

Mutual savings banks

Which of the following is NOT a type of thrift institution? Savings bank Savings and loan association Mutual savings bank REIT

REIT

What do REITs invest in?

Real estate and mortgages

Sam, a real estate instructor, explains a particular loan origination method to his class. In this method, lenders deal directly with the borrower and perform all the steps necessary during the origination and funding of the loan. What origination process is Sam describing?

Retail loan origination

What is the first step when a mortgage company wants to utilize a warehouse line?

Submitting a pre-funding loan package

Who supervises the activities of credit unions?

The National Credit Union Association Board

How are pension funds similar to life insurance companies?

They are a direct source of funds for developers and builders

Which statement is correct regarding credit unions?

They are owned and operated by their members

Which of the following is not true regarding a credit union? It is a cooperative, non-profit organization They are owned and operated by their members Members typically share a common affiliation They offer the highest interest rates, but lowest fees

They offer the highest interest rates, but lowest fees

What is a financial institution that is legally allowed to accept deposits from consumers?

A depository institution

Foreign national loans are similar to standard U.S. loans, except that the required down payment is generally larger. Generally speaking, the required down payment rate is approximately:

30%

REITs are subject to a number of special requirements, one of which is that REITs must annually distribute at least __________ of their taxable income in the form of dividends to shareholders.

90%

Foreign national loans are similar to standard U.S. loans, except that the required down payment is generally larger. Generally speaking, the required down payment rate is approximately:

Third party originators (TPOs)

How do life insurance companies obtain funds to create loans?

Through insurance premiums

What is the principal obligation of commercial banks?

To generate profit for shareholders

How are contributions in a pension fund used?

To purchase investments for the pension plan

__________ are debt obligations issued by the U.S. Department of the Treasury, and they are considered one of the safest investments because they are backed by the full faith and credit of the U.S. government.

U.S. Treasury securities

Many federal agencies and Government Sponsored Enterprises (GSEs) raise money by issuing securities, called agency bonds. Which of the following agencies issues agency bonds? Fannie Mae Freddie Mac Sallie Mae All of the choices apply.

all

Non-fiduciary lenders are: non-depository institutions. relatively free from government regulations. private lenders. All of the choices apply

all

Which of the following is a non-fiduciary lender? Private loan companies Private investors Foreign lenders All of the choices apply

all

During the loan origination process, a retail lender is responsible for all of the following, except: completing the application with the borrower. ordering employment, income, and deposit verifications. preparing the loan for underwriting. appraising the property.

appraising the property

Usually niche lenders work with foreign nationals because:

both they do not have social security numbers and their American credit history may be minimal or nonexistent

Large pension funds, such as those held by the state for the benefit of public employees, often guarantee the repayment of millions of dollars in bank loans used to:

build low-income and moderate-income housing.

Some banks require commercial borrowers to keep a certain amount of money on deposit as a requirement of the loan agreement. These deposits are known as:

compensating balances.

Real estate __________ involves the pooling of funds by multiple investors in a real estate project.

crowdfunding

Which of the following is something a credit union cannot do? Make home loans Make commercial loans Issue credit cards Develop real estate

develop real estate

Mortgage brokers are responsible for all of the following tasks, except: qualifying borrowers. taking applications. disbursing money. sending completed loan packages to the wholesale lender.

disbursing money.

Non-fiduciary lenders differ from fiduciary lenders because they:

do not take deposits.

A __________ is usually a third party originator who originates loans for a sponsor.

loan correspondent

Securities issued by local governmental subdivisions, such as cities, towns, villages, counties, or special districts are generally referred to as:

municipal securities.

REITs provide a similar structure to that of:

mutual funds.

All of the following is true regarding credit unions, except they: accept deposits in a variety of accounts. offer savings accounts or time deposits. offer money market accounts. options, credit default swaps, and other speculative financial products.

options, credit default swaps, and other speculative financial products.

Which of the following specializes primarily in consumer and commercial loans? Savings banks Life insurance companies Credit unions Thrifts

savings bank

The proliferation of niche lenders offering foreign national loans is largely due to:

the demand for real estate loans to people who are not American citizens.

The most important benefit to the wholesale lender is:

the large number of mortgage loans that may be acquired more economically than if the lender originated the loans.

All of the following are true regarding loans made by life insurance companies, except: they have low interest rates. they have the lowest loan-to-value ratios. they usually originate loans in the single family residential market. they have stricter underwriting guidelines.

they usually originate loans in the single family residential market.

Mortgage brokers are __________ and not lenders.

third party originators (TPOs)

Mortgage brokers and loan correspondents act as:

third party originators.

How can an investor purchase a share of a REIT?

via stock market

When a lender acquires a processed loan from a mortgage loan originator, it is called __________ mortgage lending.

wholesale

After the loan has been transferred to the wholesale lender and has been funded either before the transfer or by the wholesale lender, it:

will be held in the lender's portfolio or sold in the secondary loan market.