General Mortgage Knowledge - 2.0

request modification of the terms of the loan when it reaches maturity.

A balloon mortgage that includes a conditional refinance provision allow the borrower to

periodic cap

A limit on the amount by which the payment can change on any adjustable date from the current or previous payment amount on an ARM

hybrid ARM

A loan with a fixed period at the start that will adjust regularly after a certain period is commonly referred to as an

bridge loan

A loan with the term of less than one year that is related to a purchase or a construction of a home is known as a _____

loan modification

A permanent change to an existing loan.

table funding

A wholesale lending arrangement that permits a mortgage broker to originate, close and fund a loan using a warehouse line of credit is called

FHA total scorecard

AUS for FHA

limited

Advantages of VA loans include; 100% financing, no prepayment penalties, more lenient UW, and ___________ closing costs.

credit report and appraisal

Although no longer permitted in the mortgage marketplace due to new requirements for the assessment of repayment ability of borrowers, a "no-doc" loan historically required what documentation for loan approval?

Non QM loans

Analysis of borrower's repayment ability is still required on ___________

FHFA (Federal Housing Finance Agency

As a result of the Housing and Economic Recovery Act of 2008, Congress created __________ for oversight of the GSEs.

tax returns and in some cases business returns from the past two years

Borrowers that own more than 25 percent of a business is considered to be self employed and must provide

gross up income by 25 percent (multiply by .125)

Borrowers who earn non-taxed income (ssI, disability, etc.) are permitted to

limit the amount an interest rate or payment can adjust during any one adjustment period or over the lifetime of the loan

Caps on ARMS ______

Fannie and Freddie

Conforming loans must meet _________ requirements

fixed rate, term doesn't exceed 30 years and down payment of 3%

Conventional 97% loans must

33 and 38

Direct RHS loans may have terms of _ years

DO NOT

Do VA loans require a down payment?

arm is locked for three years then adjusts annually each year after

Explain the feature of an arm, for example 3/1

580

FHA FICO for 3.5 percent down

Mutual Mortgage Insurance Fund

FHA funds are held in

15 and 30 year

FHA loan terms

interest is calculated and added to the loan balance

HECM interest rates, borrowers don't make regular interest payment but rather ____

two appraisals with minimal exemptions

HPML require

APR , points and fees, and pre payment penalties

High Cost Mortgage loans (HOEPA loans) must meet at least one of the three thresholds

HOEPA loans - section 32 of TILA

High cost mortgage loans are known as

1.5, 2.5, or 3.5 depending on the transaction

High price mortgage loans are close ended loans secured by a principal dwelling and where the APR exceeds the APOR by

HUD establishes loan limits for FHA based on county by county limits.

How are FHA loan limits established?

HUD establishes loan limits for FHA loans based on county-by-county limits

How are FHA loan limits established?

2 year of tax returns

If borrower earned more than 25% of income from commission, they must provide

borrower

In lien theory states the _______ holds the tile to the home securing the mortgage, and when the loan is paid in full, the lien on the home is released.

three

In order for a small creditor to originate a ballon payment qualified mortgage, the small creditor must hold the loan in it's portfolio for ____ years

fully indexed rate

In the absence of caps, adjustments on an ARM loan would be determined solely by

$484,350

Jumbo limit for 1 unit properties was $453,100 but is now___________.

upfront 1% and annual fee is .35%

List the guarantee fees for RD loans

non-conforming

Loans that do not meet guidelines established by Fannie Mae and Freddie Mac are known as

Mortgage Insurance Premium

MIP stands for

balloon payment qualified mortgage

QM mortgage can't include a balloon payment unless it's a

housing expense ratio and total debt ratio

Qualifying ratios consist of

housing expense ratios and total debt ratios

Qualifying ratios consist of what two separate calculations?

US government

RHS direct is funded by

private lenders

RHS guaranteed loans are funded by

6 percent

Seller concessions are limited to _______ of sales price.

pay stubs most recent 30 days and W2 most recent 2 year period

Standard income salaried and hourly borrowers include

foreclosure

The Federal Housing Administration does not make loans; it insures loans. What does the FHA insure against?

30 year mortgage

The SAFE act defines a "nontraditional mortgage product" as any loan other than _____

Examines whether the collateral and applicant meet lender guidelines

The UW process _________

scrutinization

The ____ process allows lenders to transfer active loans to another entity in exchange for funds to make more loans.

total monthly debts (including housing expenses plus other debts) to monthly gross income

The back-end ratio compares

promissory note

The lending document that contains the contractual terms for repaying a home loan is the

conditional refinance provision

The risk of a balloon mortgage may be minimized by including a

Interest Rate Reduction Refinance

The term IRRRL refers to __________

1.75 percent of the loan amount.

UFMIP for FHA loans is

safe harbor qualified mortgages

VA guaranteed or insured loans that are made in compliance with VA standards are ________

15, 20, 25, and 30

VA loan terms

assumable

VA loans are

tax lien

What information, if found during a title search, is likely to prevent the completion of a transaction to refinance a first mortgage?

to help borrowers purchase homes if they do not have a significant down payment

What is the purpose for PMI?

after the first three years of the loan term

When a fixed rate qualified mortgage included a prepayment penalty, that penalty may not be charged

6%

When the borrower makes a down payment between 10% and 24.9% on a Conventional, Conforming loan, what is the most a seller can contribute?

mortgage

Which document connects the promissory note to the collateral?

VA

Which loan program considers residual income in qualification

single purpose mortgage

Which reverse mortgage is the least expensive type?

High Price Mortgage Insurance

Which transactions do not have Home Counseling requirements

the United States government

Who funds direct VA loans

adjustment frequency

_____ establishes how often an adjustment to the interest rate can occur.

residual income analysis

_____ is used to determine whether the veteran has adequate monthly residual income to meet living expenses after established monthly expenses.

IRRRLS

______ does not automatically have conclusive presumption of compliance

high cost mortgage under HOEPA

________ can't be a balloon payment

Note or Promissory Note

____________ is the borrower's promise to repay the loan.

negative amortization

____________ occurs when the mortgage payment is not sufficient to pay the interest currently due.

ballon mortgage

a ________ loan amortizes over a set period of time and matures at an earlier date.

seller carry back

a transaction in which the seller provides all or most of the financing

direct is 33 and 38, and guaranteed is 30 years

all RD loan terms

prepayment penalty

charge paid by the borrower when repaying loan principal earlier than required by the amortization schedule.

encumbrance

claim against a property that can affect the ability to transfer title.

620

conventional FICO

higher interest rate

creditors pass on a loan level price adjustment to consumers in the form of a

margin

fixed number not subject to change during the term of the loan

power of sale clause

foreclosure is the sale of a property after a borrower's defaults on payments. What is the exact procedure the lender follows in order to foreclose is dependent on the absents or presence of _____

1.25%

funding fee for subsequent users who are making a down payment of 10% or higher

2.15

funding fee percent for first time users who aren't making a down payment

1.5

funding fee percent for first users making a down payment between 5% and less than 10%

3.3

funding fee percent for subsequent users with no down payment

the lender must manually UW

if you get a "refer" on your FHA scorecard

earnest money

money paid by the buyer to the seller at the time of entering into a contract to indicate intent and ability to carry out the contract is called

85%

on a HELOC, the borrower can get up to _______ of the appraised value of the home minus the amount owed on any first mortgage.

occupancy fraud

one of the most common forms of mortgage fraud is

lifetime rate caps

the amount by which an interest rate change over the loan term

entitlement

the amount the government will guarantee to a lender is known as the veterans

rate ceiling

the lifetime cap is also known as the

lifetime rate cap

the rate ceiling is also known as

index

the starting point

default

the upfront guarantee fee on an RD loan serves in the event of

single purpose, HECM, and proprietary mortgage

three types of reverse mortgages

41%

total DTI or back end DTI for VA loans