ch 6 unit 8
why and when was Fannie Mae established
1938, for the purpose of purchasing FHA loans from loan originators to provide some liquidity for government insured loans.
Participation financing:
A mortgage in which the lender participates in the income of the mortgaged property beyond a fixed return, or receives a yield on the loan in addition to the straight interest rate.
S&Ls are now regulated by the Federal Housing Finance Board (FHFB) and deposits are insured by the Deposit Insurance Fund for at least $250,000. Federal Deposit Insurance Corporation for up to $250,000 per account. Deposit Insurance Fund for at least $100,000. Federal Deposit Insurance Corporation for up to $1,000,000 per account.
Deposit Insurance Fund for at least $250,000. why; Savings and loans are regulated by the Federal Housing Finance Board (FHFB) and deposits are insured by the Deposit Insurance Fund. Deposits are insured for at least $250,000.
The Federal National Mortgage Association is authorized to purchase which of the following types of mortgage loans? FHA only VA only FHA and VA, but not conforming conventional FHA , VA, and conventional
FHA , VA, and conventional
the following about the Federal National Mortgage Association: Buys FHA loans, VA loans, and conventional loans. Largest purchaser in secondary market. FNMA is referred to "_____________"
Fannie Mae
both private companies under the conservatorship of the Federal Housing Finance Agency (FHFA) since 2008.
Fannie Mae and Freddie Mac
Bank deposits are insured by the ______________________________ for up to $250,000 per account.
Federal Deposit Insurance Corporation
Which of the following is considered a part of the secondary mortgage market? Mutual Savings Bank Assoc. (MSBA) Federal Reserve Board (FED) American Credit Union Board (ACUB) Federal Home Loan Mortgage Corporation (FHLMC)
Federal Home Loan Mortgage Corporation (FHLMC)
Which is not an agency that deals (buys loans) in the secondary market? Government National Mortgage Association Federal Home Loan Mortgage Corporation Federal Housing Administration Federal National Mortgage Association
Federal Housing Administration
Savings and Loans are now regulated by the _____________________________ and deposits are insured by the ________________________
Federal Housing Finance Board (FHFB) Deposit Insurance Fund
Major warehousing agencies in the Secondary Mortgage Market are:
Federal National Mortgage Association or *Fannie Mae* (FNMA) Government National Mortgage Association or *Ginnie Mae* (GNMA) Federal Home Loan Mortgage Corporation or *Freddie Mac* (FHLMC)
Federal Home Loan Mortgage Corporation Buys conventional loans. Referred to as "____________."
Freddie Mac
Government National Mortgage Association; Buys FHA loans or VA loans. controlled by an agency of the Department of Housing and Urban Development. Referred to as "____________"
Ginnie Mae.
To tighten the economy, the Federal Reserve would
Increase discount rates Sell securities Raise reserve requirement
All of the following were originally established to buy and sell mortgages in order to stimulate mortgage lending, except Fannie Mae (FNMA). Maggie Mae (MGIC). Freddie Mac (FHLMC). Ginnie Mae (GNMA).
Maggie Mae (MGIC).
The promissory note is: Considered to be
PERSONAL PROPERTY (readily negotiable) that can be bought and sold.
Bonds
Paper notes promising to repay money after a certain length of time with interest
The Primary Mortgage Market financing sources are:
Savings and loans Banks Insurance companies Mortgage brokers Mutual savings banks
Federal National Mortgage Association or Fannie Mae (FNMA)
Sells seasoned mortgages and deeds of trust to individual investors and financial institutions
The primary distinction/s between the primary and secondary mortgage market is? The primary market is not active in the origination of mortgage loans. The secondary market is fundamentally a holding or warehousing process. The homebuyers can get a mortgage from both primary and secondary markets. Only lenders can get loans in the primary market.
The secondary market is fundamentally a holding or warehousing process.
A commercial bank would usually make all of the following loans EXCEPT, construction. home improvement loans. loans for a mobile home. a pension fund loan.
a pension fund loan.
Reserves
are the amounts of money (assets) banks are required to keep on hand. Takes 30 to sixty days to have an effect on the market.
The Federal Reserve System ("The Fed") is a
central banking system designed to manage the nation's economy. Each of the 12 Districts is served by a Federal Reserve Bank.
_____________ is the regulator for Ginnie Mae and Freddie Mac.
department of housing and urban development (HUD)
Primary Mortgage Market
money that banks use to create loans for people
When the fed are buying bonds or selling securities, there is ________ money in the market, interest rates _________, and the economy is stimulated
more & lower
The purpose of the secondary mortgage market is to
mortgage investors buy the loans from lenders
what's a seasoned mortgage
one that has been in existence for some time and has a good record of repayment by the mortgagor.
A mortgage in which the lender participates in the income of the mortgaged property beyond a fixed return is called participation financing. coop-purchase money mortgaging (CMM). wraparound financing. co-underwriting mortgage partnering.
participation financing.
Lending Laws -
protects consumers while lending
The primary purpose of the secondary mortgage market is to improve employment in the construction industry. provide low cost mortgages to consumers. provide liquidity (funds) for the primary market. regulate the interest rates on residential mortgages.
provide liquidity (funds) for the primary market.
Discount rates are the
rate at which the "Fed" charges banks for money. This influences the economy much more quickly. Almost overnight in some areas of the country.
The Federal Reserve controls the money supply by maintaining a fund from which member banks may borrow. requiring how much of a bank's assets have to be on reserve. lending money to qualified customers. setting the maximum interest rate that can be charged.
requiring how much of a bank's assets have to be on reserve.
The two biggest money lenders of residential real estate mortgages are banks and insurance companies. mortgage brokers and mutual banks. savings and loans and banks. insurance companies and mutual savings banks.
savings and loans and banks.
When "Ginnie" and "Fannie" work together it is called the
tandem plan
Federal Reserves
the central bank of the US
warehouse agencies
they purchase a number of mortgage loans and assemble them into one or more packages of loans for resale to investors.