Section 4: The Secondary Mortgage Market

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

30 years or less

Which percentage reflects the top debt-to-income ratio limit for qualified mortgages?

43%

What is a government-sponsored enterprise? A corporation that issues home loans on the primary market A department of the U.S. Treasury that regulates the mortgage industry A government agency that makes certain borrowing easier and cheaper A private company the U.S. Congress created to make certain borrowing easier and cheaper

A private company the U.S. Congress created to make certain borrowing easier and cheaper

______ is regulated by the Federal Housing Finance Agency.

Freddie Mac

Which agency sets the guidelines for qualified mortgages? The Consumer Financial Protection Bureau The Federal Home Loan Bank The Federal Housing Finance Agency The U.S. Congress

The Consumer Financial Protection Bureau

______ sets conforming loan limits for mortgages.

The Federal Home Financing Agency

Which of the following is regulated by the Federal Housing Finance Agency?

Fannie Mae

In 2008, as a response to the 2007 financial crisis, the Federal Housing Finance Agency began acting as conservator over which institutions?

Fannie Mae and Freddie Mac

GSE-eligible Qualified Mortgage

Loan that meets all the requirements and can be purchased, insured, or guaranteed by a GSE, FHA, VA, or USDA.

Small Creditor Qualified Mortgage

Loan that meets all the requirements and is originated by a lender that makes 500 or fewer mortgages annually and has $2 billion or less in assets.

General Qualifies Loan

Loan that meets all the requirements set and has a debt-to-income ratio of 43% or less.

Which of the following is NOT a benefit government-sponsored enterprises receive? Non-profit status Relief from registering with the Securities and Exchange Commission Reprieve from paying income tax U.S. Treasury line of credit

Non-profit status

Government-Sponsored Enterprises (GSEs) were created by the U.S. Congress for what purpose?

To make a percentage of loans available to low and moderate income borrowers


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