Chapter 4
Private mortgage insurance is not needed if the borrower makes a down payment of at least...?
20 Percent (%)
Assuming that the appraised value of the house is $205,000, what is the LTV?
80% (Percent)
Which of the following is paid on FHA insured loans where the borrower puts down a minimum down payment...?
MIP
Secondary Mortgage Market
The marketplace whereby the loans that were originated in the primary mortgage market are bought and sold.
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
Which of the following operates in the primary mortgage market...?
Commercial banks
This is a number assigned to a person that indicates to lenders their capacity to repay a loan...?
Credit score
Which of the following operates in the secondary mortgage market...?
Fannie Mae Freddie Mac Ginnie Mae
Which of the following purchases agricultural loans...?
Farmer Mac
This is a U.S. government agency that purchases FHA and VA mortgages...?
Ginnie Mae
Which of the following statements best characterizes a reason for the Iuros and the Redemanns to use the Short Sale Addendum?
The Iuros are unable to keep up the payments.
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.
The criteria with which a lender determines the credit worthiness in order to qualify them for the loan is referred to as...?
Underwriting
Ginnie Mae was created under the...?
Urban Development Act of 1968
A loan whose amount is above conventional conforming loan limits set by Fannie Mae and Freddie Mac is known as a...?
Jumbo loan
The secondary mortgage market offers ...........for the primary mortgage market?
Liquidity
The marketplace whereby the loans that were originated in the primary mortgage market are bought and sold is known as the...?
Secondary mortgage market
Primary Mortgage Market
The marketplace whereby loans are originated.
Ginnie Mae
a nickname for Government National Mortgage Association (GNMA), a U.S. government agency that purchases FHA and VA mortgages.
Assuming that the interest rate factor is 6.90582, what is the approximate monthly P&I mortgage amount for the loan for which the Redemanns will be applying?
1139.46
How much will the Redemanns have to make per month to afford the payments in question 3 above if Thrift Lending is using a 28% housing expense ratio?
4069.5
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.
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.
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.
Fannie Mae
An acronym nickname for Federal National Mortgage Association (FNMA), a privately owned corporation that purchases FHA, VA, and conventional mortgages.
Loans processed on uniform loan forms according to FNMA/FHLMC guidelines are known as...?
Conforming loans
A mortgage made without governmental underwriting is referred to as a/an...?
Conventional loan
Conforming loans must meet the guidelines of...?
Fannie Mae
The Federal National Mortgage Association is also known as...?
Fannie Mae
This is a privately owned corporation that purchases FHA, VA, and conventional mortgages...?
Fannie Mae
Freddie Mac is also known as the...?
Federal Home Loan Mortgage Corporation
A loan where the interest rate does not fluctuate during the term of the loan is known as a...?
Fixed Interest Rate Loan
Which of the following provides liquidity for lenders in the primary mortgage market...?
Freddie Mac Fannie Mae Ginnie Mae
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...?
Negative amortization
In this loan type, the principal balance of the loan increases over time...?
Negative amortization loans
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
Who the grantor under the Deed of Trust?
The Redemanns
