Chapter 4 - The Secondary Mortgage Market
Ginnie Mae was created under the...? A Urban Development Act of 1968 B Dodd-Frank Act of 2010 C Federal Housing Finance Act of 1971 D Fair Housing Act of 1968
A Urban Development Act of 1968
This is a U.S. government agency that purchases FHA and VA mortgages...? FDIC HUD Farmer Mac Ginnie Mae
Ginnie Mae
Ginnie Mae
a nickname for Government National Mortgage Association (GNMA), a U.S. government agency that purchases FHA and VA mortgages.
A mortgage made without governmental underwriting is referred to as a/an...? A Conventional loan B Unconventional loan C FHA insured loan D VA loan
A Conventional loan
In this loan type, the principal balance of the loan increases over time...? A Negative amortization loans B Fully amortizing loans C Fixed interest rate loan D All of the above
A Negative amortization loans
Adjustable Rate Mortgage (ARM)
A mortgage loan which bears interest at a rate subject to change during the term of the loan, predetermined or otherwise.
Underwriting
The criteria with which a lender determines the credit worthiness in order to qualify them for the loan.
Conforming Loan
Those loans processed on uniform loan forms according to FNMA/FHLMC guidelines.
Private mortgage insurance is not needed if the borrower makes a down payment of at least...? A 20 Percent (%) B 10 Percent (%) C 5 Percent (%) D 3.5 Percent (%)
A 20 Percent (%)
Which of the following provides liquidity for lenders in the primary mortgage market...? A All of the above B Freddie Mac C Fannie Mae D Ginnie Mae
A All of the above
Which of the following purchases agricultural loans...? A Farmer Mac B Ginnie Mae C Freddie Mac D Fannie Mae
A Farmer Mac
Which of the following is paid on FHA insured loans where the borrower puts down a minimum down payment...? A MIP B PMI C ADA D ARM
A MIP
This occurs when monthly installment payments are insufficient to pay the interest accruing on the principal balance, so that the unpaid interest must be added to the principal due...? A Negative amortization B Amortization C Variable balance D Reverse amortization
A Negative amortization
Non-conforming Loan
A loan that does not meet the guidelines of Government Sponsored Enterprises (GSE), such as Fannie Mae or Freddie Mac.
Fixed Interest Rate Loan
A loan where the interest rate does not fluctuate during the term of the loan.
Jumbo Loan
A loan whose amount is above conventional conforming loan limits set by Fannie Mae and Freddie Mac.
Conventional Loan
A mortgage securing a loan made by investors without governmental underwriting, i.e., which is not FHA insured or VA guaranteed. This type of loan is customarily made by a bank or savings and loan association.
Freddie Mac
A nickname for Federal Home Loan Mortgage Corporation (FHLMC), a corporation wholly owned by the Federal Home Loan Bank System that purchases FHA, VA, and conventional mortgages.
Credit Score
A number assigned to a person that indicates to lenders their capacity to repay a loan.
A mortgage loan which bears interest at a rate subject to change during the term of the loan, predetermined or otherwise, is known as a/an...? Adjustable Rate Mortgage Fixed Interest Rate Loan Term Loan Straight Loan
Adjustable Rate Mortgage
Which of the following operates in the secondary mortgage market...? Fannie Mae Freddie Mac Ginnie Mae All of the above
All of the above
Fannie Mae
An acronym nickname for Federal National Mortgage Association (FNMA), a privately owned corporation that purchases FHA, VA, and conventional mortgages.
Which of the following operates in the primary mortgage market...? Commercial banks Fannie Mae Freddie Mac Ginnie Mae
Commercial banks
Loans processed on uniform loan forms according to FNMA/FHLMC guidelines are known as...? Conforming loans Conventional loans Non-conforming loans Private loans
Conforming loans
This is a number assigned to a person that indicates to lenders their capacity to repay a loan...? Credit score Underwriting score Loan estimate score Financial score
Credit score
Conforming loans must meet the guidelines of...? FDIC Wall street Fannie Mae RESPA
Fannie Mae
The Federal National Mortgage Association is also known as...? Freddie Mac Fannie Mae Farmer Mac Ginnie Mae
Fannie Mae
This is a privately owned corporation that purchases FHA, VA, and conventional mortgages...? Freddie Mac Fannie Mae Farmer Mac Ginnie Mae
Fannie Mae
Freddie Mac is also known as the...? Government National Mortgage Association Federal National Mortgage Association Federal Home Loan Mortgage Corporation Federal Housing Finance Association
Federal Home Loan Mortgage Corporation
A loan whose amount is above conventional conforming loan limits set by Fannie Mae and Freddie Mac is known as a...? ARM Commercial loan Term loan Jumbo loan
Jumbo loan
The secondary mortgage market offers ...........for the primary mortgage market? Loans Insurance Liquidity Warranties
Liquidity
Negative Amortization
Occurs when monthly installment payments are insufficient to pay the interest accruing on the principal balance, so that the unpaid interest must be added to the principal due.
Justin obtained a mortgage from his local bank in order to purchase a new house. Justin was operating in the...? Primary mortgage market Secondary mortgage market Front-end mortgage market Back-end mortgage market
Primary mortgage market
The marketplace whereby the loans that were originated in the primary mortgage market are bought and sold is known as the...? Front-end mortgage market Secondary mortgage market Back-end mortgage market Stock market
Secondary mortgage market