The CE shop - Finance

What must a qualified mortgage's loan term limit be?

30 years or less

In a deed of trust, who is the trustee?

A neutral third party. The trustee is the one who holds the trust on behalf of the beneficiary (the lender).

What's the acronym for the legislation that established processes and procedures for how federal agencies propose and enforce regulations?

APA

APA

Administrative Procedure Act

Which of the following individuals would qualify to purchase a home under the Good Neighbor Program?

An emergency medical technician. The Good Neighbor Next Door program offers specific FHA-foreclosed properties to individuals who are law enforcement officers, K-12 teachers, firefighters, and EMTs for a 50% discount and only $100 down. The owner must also occupy the home after the purchase.

Freddie Mac targets which type of loans to purchase?

Conventional

Mike's been friends with Tim since college. They often work together: Mike flips houses and Tim's an appraiser that he uses frequently. It works out great for both friends and Mike definitely gets a better appraised value on the flips Tim handles. For every appraisal Tim handles for him, Mike gives him a $100 gift card. In what illegal practice does it sound like they're engaging?

Falsely inflating appraisals. An inflated appraisal occurs when an appraiser intentionally submits a misleading report to a lender that indicates an inflated property value. Inflated appraisals are illegal and can get both of these guys in trouble.

Which entities usually acts in the secondary market?

Fannie Mae

what resource will give you reports and statistics include house price index, foreclosures, and refinancing?

Federal Housing Finance Agency

The Government National Mortgage Corporation was created in 1968 under the Department of Housing and Urban Development (HUD) and is more commonly known as ______.

Ginnie Mae. Ginnie Mae was created as the Government National Mortgage Corporation in 1968 under the Department of Housing and Urban Development (HUD).

Which of the following best describes a blanket lien?

It gives lenders the ability to recover losses due to a foreclosure sale from any current or future property the borrower owns. Blanket liens give lenders the ability to recover losses sustained in the foreclosure process by placing liens against current and future property held by borrower who defaulted until those losses are recovered.

Which of the following best describes the non-judicial foreclosure process?

It may be used if the deed of trust includes a power-of-sale clause.

What is another description for a mechanics lien?

It's a specific involuntary lien

Which type of real estate investment trust involves both residential and commercial properties?

Mortgage REIT. Mortgage REITs finance both residential and commercial properties

What percentage of closing costs can be included in a VA loan?

None. Closing costs may not be included in the loan, but the borrower may negotiate with the seller to pay these.

The ______ clause allows the borrower to pre-pay principal on the loan at any time without penalty.

Pre-payment.

What is the act that requires this licensing identification to be available to consumers?

SAFE Act. The Secure and Fair Enforcement for Mortgage Licensing Act (SAFE Act) requires that mortgage loan originators obtain a license that consumers can identify and research.

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

That the borrower and seller names, the property address, and the sales price are accurate and spelled correctly. The borrower and seller names and the property address must be accurate.

What's another name for the Homeowner's Protection Act?

The PMI Act of 1998 Also called the Homeowners protection act

What does it mean when a life insurance company uses participation financing?

The life insurance company participates by taking partial ownership of the project in exchange for funding the loan. Often, a life insurance company will take partial ownership of a project in exchange for providing the financing.

What's one reason a borrower would choose a split—or piggyback—loan option?

To avoid going over the conforming loan limit

Mutual savings banks were created to serve ______ during the mid-19th century.

Workers. Mutual savings banks are primarily concentrated along the East Coast and were created to serve workers during the industrial expansion of the mid-19th century.

The American Recovery and Reinvestment Act provided mortgage assistance to ______.

Wounded servicemen and servicewomen. Mortgage assistance for wounded servicemen and servicewomen was part of the ARRA.

Which statement best describes the most common approach used to reconcile the three appraisal approaches?

The appraiser may weigh one or two approaches more heavily than the others, as appropriate for the property type. Appraisers may weigh one or two approaches more heavily. Most often, appraisers will use a weighted average.

Page one of the Loan Estimate includes a section called "Costs at Closing." The amount shown as estimated cash to close is ______.

The estimated amount the client will pay by cashier's check or wire transfer at closing. The estimated cash to close amount is what the borrower should expect to bring to closing in the form of a wire transfer or cashier's check.

Which government program assists rural Americans by offering loans, grants, and loan guarantees for housing?

USDA Rural Development. The USDA Rural Development Program assists rural Americans by offering loans, grants, and loan guarantees for housing (as well as economic development, health care, first responder services and equipment, and water, electric, and communications infrastructure).