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32 Cards in this Set
- Front
- Back
the real estate financing market has 3 basic components: |
Govt influences, The Federal Reserve The primary mortgage market the secondary mortgage market |
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The federal reserve |
regulates the flow of money and interest rates in the marketplace through its member banks by controlling the rate charged for loans it make to those banks |
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discount rate |
interest rates set by The Federal Reserve that member banks are charged when they borrow money through the Fed |
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What happens when discount rates rise? |
interest rates rise |
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primary mortgage market |
made up of lenders that originate mortgage loans |
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secondary mortgage market |
where loans are bought and sold only after they have been funded |
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Fannie Mae |
buys from a lender a block and pool of mortgages that may be used as collateral for mortgage backed securities |
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Freddie Mac |
provides a secondary market for mortgage loans , primarily conventional |
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Farmer Mac |
privately owned and publicly traded to create a secondary market for agricultural mortgage and rural utilities loans and the portion of agricultural and rural development loans guarantee by the US |
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conventional loans |
is viewed as the most secure loan because their ltv ratio is normally lower. i does not require any federal sponsored insurance or guaranty |
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What is PMI |
private mortgage insurance. It protects the top portion of a loan u |
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FHA insured loan |
a loan insured by The federal housing administration and made by an approved lender in accordance with FHA regulations |
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assumption rule |
when a qualified buyer assumes an existing FHA insured loan |
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VA loan |
guaranteed loans for eligible veterans to purchase a home |
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what is CRV |
CRV stands for certificate of reasonable value and it states the propertys current value based on a VA approved appraiser |
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package loan |
a loan that includes real and personal property |
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blanket loan |
covers more than one parcel or lot |
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wraparound loan |
enables a borrower with an existing mortgage loan to obtain additional financing from a second lender without paying off the first loan |
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open end loan |
a mortgage loan that is expandable by increments up to a maximum dollar amount with the full loan being secured by the same original mortgage |
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construction loan |
made to finance the construction of improvements on real estate |
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sale and leaseback |
used to finance large industrial and commercial properties |
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buydown |
way to temporarily lower the interest rate on a mortgage or deed |
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home equity loans |
source of funds that takes advantage of the equity built up in the home |
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Reg Z |
enacted by the govt to enforce the truth in land act, requires that credit institutions inform borrowers of the true cost of obtaining credit |
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creditor |
a person who extends consumer credit more than times each year |
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3 business day right of recession |
the buyer has 3 business days to rescind the transaction by notifying the lender |
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equal credit opportunity act |
prohibits discrimination during the lending process |
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Community Reinvestment Act of 1977 |
under this act financial institutions are expected to meet the deposit and credit needs of their community for low income and moderate income housing |
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R/E settlement procedures act (RESPA) |
is designed to ensure that both buyer and seller are fully informed of all costs related to the closing transactios |
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What does the acronym HELOC stand for |
home equity line of credit |
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the conservatorship of Fannie Mae and Freddie Mac is the responsibility of who |
Federal housing finance agency |
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funds for FHA insured loans are usually provided by |
approved lenders |