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144 Cards in this Set

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  • Back
WHAT IS A LOAN
A transaction which a lender advances funds to a borrower with an expectation that the funds will be repaid
What is a mortgage
A lien on real property owned by the borrower that secures the promise to repay
types of loans
fixed rate mortgages
Adjustable rate mortgages
indicies
1yr tresasury
london intgerbank offerd rate LIBOR
prime 6 month CD
11th District cost of funds COFI
Special Product loans
Loans that combine aspects of fixed and variable rate mortgages- starting with a low fixed rate for seven to ten yrs then adjusting to market conditions
FHA Loans
Federal housing Aminin
Gov insured for 1st time home buyer
Loans allow borrowers to purchase a home with less down payment
Acceleration
right of mortgage lender to demand the immediate repayment of the mortgage loan balance. upon default of the mortgagor
Adjustment Interval
Time between changes in interest rate on an arm
assumption
agreement between a buyer and a seller where a buyer takes over the payments on an existing mortgage.
Amortization
loan payment by equal periodic payment calculated to pay off the debt at the end of a fixed period, including accrued interest on the outstanding balance.
Blanket mortgage
mortgage covering a least two pieces of real estate as security for the same mortgage
buy down
mortgage is subsidized by lowering the interest rate during the first few years of the loan.
mortgagor
one who applies for and recieves a loan in the form of a mortgage AKA the borrower
Certificate of Eligibility
doc given to qualified Vets entitled to apply for a VA loan, for business home or mobile home
Certificate of reasonable value CRV
appraisal issued by the va showing the propertys current market value
Cert of Vet status
given to vets who served at least 90 days of continuous service
conforming loan
Loan conforms to fannie mae and or freddie mac guidelines
Construction loan
Short term loan for builing
Debt to Income ratio
Expressd in %, when borrowers monthly payment obligation on long term debts, including the proposed monthly housing expense, is divided by his or her gross monthly income

Debt/monthly income= %
conventional loan
mortgage not insured by FHA or Guaranteed by VA
Deferred interest
Mortgage is written with a monthly payment that is less than required to satisfy the note rate, the unpaid interest is deferred by adding it to the loan balance.
due on sale clause
lender demand immediate payment on the mortgage balance if the borrower sells the home
Earnest money
Money given by a buyer to a seller as part of the purchase price to bind a transaction or assure payment
escrow
account held by the lender into which the home buyer pays money for tax or insurance paymnets. Also earnest deposits held pending loan closing
Equity
difference between Fair market value minus current indebtedness
Graduated payment mortgage(GPM)
type of flexible payment mortgage where the payments increase for a specified period of time and then level off. this type has negative amortization built into it
Guaranty
Promise to pay one party the debt owed another party if the original party fails to pay
housing exprense to income ratio
ratio expressed as a %
Housing expenses/ gross income

HEI = Total housing epense/Gross monthly income
Jumbo loan
loan larger than limits set by Fed national Mrotgage Association and Federal home Loan Mortgage Corp.

300,700 as of 9/1/02
LTV
Loan to value ratio
The loan amount/Appraised value or sale price which ever is less
MIP
Mortgage insurance premium
insurance from FHA to the lender against incurring a loss on account of the borrowers default. Funding Fee
Mortgage Insurance
Money paid to isure the mortgage when the down payment is less than 20%, Also PMI and FHA mortgage insurance
Mortgagee
Lender
Mortgagor
Borrower-homeowner
Neg Amortization
Occurs when mothly payments are not large enough to pay all the interest due on the loan.
Net effective income
Borrowers gross income minus federal income tax

NEI=Gross income-Fed Income tax
Non comforming loan
loan doesnt conform to fannie mae or freddie mac guidelines.
Origination Fee
Fee charged by a lender to prepare loan docs, make credit checks, inspect and sometimes appraise a property, usually computed as a % of the face value of the loan
PITI
Principle interest taxes insurance
Pledged account mortgage
Moeny is placed in a pledged savings account and this fucnd plus earned interest is gradually used to reduce mortgage payments
points
loan discount points
Prepaid interst assessed at the closing by the lender. Each point is equal to 1 percent of the loan amount
prepaymnet
a privilege in a mortgage permitting the borrower to make payments in advance of their due date
Pre payment penalty
Money charged for the early repayment of a debt
Principle
the amount of debt, not counting interest, left on a loan
PMI
Private mortgage insurance
Refinance
Obtaining a new mrtgage loan on a property already owened. Often to replace axisting loans on the propery
simple interest
Interst which is computed only on the pinciple balance
Second mortgage
Mortgage which is subordinate to another loan
Shared aprreciation mortgage
SAM-another party other than the borrower shares in the appreciation of the property
subprime loan
a mortgage which is granted to a borrower whose assets, credit history, crdit score or other characteristics are not sufficient to qualify for a conforming loan
underwriting
the decision whether to make a loan to a potential home buyer based on credit, employment,assets, and other factors, and the mathciing of this risk to an appropriate rate and term or loan amount
Ecoa
Equal Credit Opportunity act
Prohibits discrimination against an applicant for credit because of age sex marital status religion race clolor national origin or reciept of public assistance
FCRA
Fair Credit Reporting Act:
i)Establishes method to correct mistakes on an idividuals credit report
ii)Requires that the credit report be kept confidential and can only be used for legitimate business reasons
The predatory lending law relates to what type of mortgage
all closed end mortgages
the PLA is what type of law
Usury Law
what kind of fee is no a permitted charge under the PLA
Processing fee
when should a 3rd party fee be included in the 5% under the PLA
When there is an ABA
miscellaneous fees
up to .25% of the loan amount or 150.00 which ever is greater
what is a bona fide 3rd party fee
a fee where you have no affiliated business arrangement nor make any profit
NC law prohibits a prepayment penalty on loan amounts of
100,000
on a 100k loan what is the max miscellaneous fee
250.00
what fee can a broker charge in NC
Application fee
what fee is not permitted in NC
Processing fee
What is the max amount a borker can charge in NC
5 points
When can a discount point be charged in NC
as a bona fide rate buy down
is flipping allowed in NC
NO
What is Flipping
Refi a loan with no reasonable tangible net benefit to the borrower
what is an example of a prohibited act in NOrth carolina
Refi a loan to make a fee with no reasonable tangible net benefit to the borrower
what kind of statement would make a loan fall under the high cost loan provision of the PLA
Originating a loan of 250k with a prepayment penalty which exceeds 30 months
How much of a fee can be charged on a 20k loan
1000
what constitutes a high cost loan
prepayment penalties of 1%in the aggregate of amount prepaid
example statement of a high cost loan that is not true
all subprime loans in NC are high cost loans
under High Cost provisions of the PLA which type of loan is included
Loan on a primary residence
in NC a prepayment penalty can be charged on which of the following loan amounts
100K
If you have a ABA with a provider of services, give example of statement that could be true
the fee must be included in the 5%
who is exempt from the Mortgage lending act
a seller who receives no more than 5 purchase money mortgage in a single year
how many mortgage brokers can you work for
one
example of a true statement under the MLA
loan officers are required to notify the commissioner when their employment status changes
when does your license expire
june 30th
annual fee for loan officer license renuewal
50.00
annual fee for mortgage lender license renewal
500
annual fee for mortgage broker renewal
500
a mortgage broker can have as many brances as he wants, but each branch must have a branch license
true
the branch manager must meet the three year experience requirement
if they are running a branch office
requiremnet for licensure
must take 8hrs per year of approved continuing education
RESPA is regulated by
HUDS office of consumer regulatory affairs
TIL is known as
Reg Z
The commissioner is
Joseph A Smith Jr.
Another name for a borrower on a morgage is
MORTGAGOR
PAYMENT AND TERMS ARE ON WHAT DOCUMENT
THE NOTE
MARGIN IS ADDED TO WHAT
THE INDEX TO DETERMINE THE RATE FOR THE ADJUSTMENT PERIOD
HOW MANY DAYS DO YOU HAVE TO NOTIFY OF JOB CHANGE
15 DAYS
MAX FINE FOR USURY IS
10K PER VIOLATION
MANE ONE AREA WHERE DICRIMINATION IS PROHIBITED IN TAKING A CREDIT APPLICATION
AGE, RACE, GENDER, RELIGION
FAIR HOUSING ACT IS ASSOCIATDED WITH
DISCRIMINATION IN A REAL ESTATE TRANSACTION
THE CORE OF THE APPRAISAL IS
MARKET VALUE
APR
ANNUAL PERCENTAGE RATE
ANOTHER NAME FOR APR
ADJUSTED OR ACTUAL RATE
SETTLEMENT COSTS AND YOU , IS GIVEN
WITH IN 3 BUSINESS DAYS AFTER APPLICATION
CHARM BOOK(CONSUMER HANDBOOK ON ADJUSTABEL RATE MAORTTGAGES) BOOKLET IS GIVEN WHEN
WITH IN 3 BUSINESS DAYS AFTER APPLICATION (TRIGGERED BY THE MENTION OF AN ARM)
LATE RENEWAL FEE
250
LICENSE IS NO LONGER VALID WHEN
909 DAYS PAST JUNE 30TH
WHEN DOES A SELLER HAVE TO OBTAIN A LOAN OFFICER LICENSE
WEHN HE/SHE SELLS MORE THAN 5 HOUSES ANNUALLY
WHAT CAN YOU NOT FINANCE IN A HIGH COST LOAN
POINTS AND FEES
CALCULATE ONE MONTH;S INTEREST ON A NOTE ON 120k AT 10%
12000X.12=1000
CALCULATE MONTHLY INCOME ON 28/36
120K LOAN 10% INTEREST
PHI PAYS ON A LOAN DEFAULT
A SPECIFIED PART OF THE LOAN THAT THE BORROWER STILL OWES
DEFINE MORTGAGE BROKER
TO TAKE OR OFFER TO TAKE A MORTGAGE APPLICATION FOR MONEY OR GAIN
DEFINE LOAN OFFICER
TO ACT AS A MORTGAGE BROKER
WHAT INCOME CAN AN APPLICANT NOT DISCLOSE ON A 1003
CHILD SUPPORT
WHEN ARE YOU REQ BY nc LAW TO SEE THAT THE BORROWER GETS HOME OWNERSHIP COUNSELING
ON A HIGH COST LOAN
WHEN ARE YOU REQ BY LAW TO MAKE SURE THAT A LOAN IS A BENEFIT TO THE BORROWER
ON A REFIE
WEHN IS YOUR LICESNE EFFECTIVE
WHEN YOU HAVE THE ACTUAL LICENSE IN YOUR HAND
WHEN IS THE TIL GIVEN
WITH IN 3 BUSINESS DAYS OF APPLICATION
ECOA PHOHIBITS WHAT
LENDERS FROM DICOURAGING ANYONE FORM SEEKING A LOAN APPLICATION
VOE STAND FOR
VERIFICATION OF EMPLOYMENT
PMI PROTECTS WHO
THE LENDER
HOW DO YOU CALCULATE MONTHLY INCOME
WEEKLY SALARY MULTIPLIED BY 52 AND THEN DIVIDED BY 12
DISCOUNT POINTS RELATE TO
THE INTEREST RATE
DIFINE REVERSE MORTGAGE
ENABLE OLD HOME OWNERE TO CONVERT EQUITY INTO CASH USING A VARIETY OF PAYMENT OPTIONS TO ADDRESS THEIR SPECIFIC FINANC NEED
APR INCLUDES WHAT
BROKER FEES AND POINTS
WHAT INFORMATION ABOUT DEBT INS INCLUEDED ON THE 1003
BALANCE, TOTAL OF PAYMENTS, AND THE MOTHLY NOTE
FROM WHOM MAY A LOAN OFFICER RECEIVE COMMISIONS
ONLY FORM THE BORKER FOR WHOM HE WORKS
WHAT DOES THE UNDERWRITER DO
ASSES RISK FOR THE LENDER ON
1.CREDIT WORTHYNESS
2.ABILITY OF THE CUSTOMER TO PAY
3.THE VALUE OF THE PROPERY
IF A CREDIT REPORT IS 12.00 WHAT CAN YOU CHARGER
12.00
CALCULATE AMORTIZATION ON LOAN AMOUNTS GIVEN
MAKE UP SOME NUMBERS
WHAT TYPE OF LOAN HAS A FUNDING FEE
N/a
WHE IS THE MOENY FOR TAXES AND INSURANCE HELD
ESCROW
HOW MUCH OF A CUSHION CAN AN ESCROW ACCOUNT HAVE
1/6 OF THE ANNUAL CHARGES FOR TAXES AND INSURANCE
BONO FIDE MEANS
GOOD FAITH, REAL
WHICH FEE IS PERMITTED IN nc
APPRAISAL FEE
WHICH FEES CAN A BROKER CHARGE IN nc
LOAN APPLICATION FEE
WHAT FEE IS NOT PERMITTED
UNDERWRITING FEE
WAHT IS MAX AMOUNT A BROKER CAN CHARGE IN nc
UP TO 5 POINTS INCLUDING ALLOWABLE FEES
WHICH LOANS CAN NOT HAVE A PREPAYMENT PROVISION
LOANS UP TO 150k
WHAN CAN DISCOUNT POINT BE CHARGED ON A LOAN
WHEN IT RESULTS IN A BONA FIDE REDUCTION OIN THE INTEREST RATE OF THE LOAN
WHAT IS LOAN FLIPPING
REFI A LOAN PRIOR TO ONE YEAR WITH NO REASONABLE TANGIBLE NET BENEFIT TO THE BORROWER
WHAT MAKES A LOAN A HIGH COST LOAN IN NC
A PREPAYMENT PENALTY WHICH EXCEEDS 30MONTHS
WHAT IS NOT PROHIBITED ACT IN NC
CLOSING A LOAN ON SUNDAY
WHICH IS NOTA ACONSIDERATION IN DERTERMING WHERTHER A LOAN IS A HIGH COST LOAN
THE DEBT TO INCOME RATION OF THE BORROWERW
WHAT FEE IS UNLAWFUL TO INCLUDE IN A MORTGAGE LOAN
CREDIT LIFE FEES
WHAT IS PERMITTED BY NC LAW
CHARGING A BROKER FEE
WHICH OF THE FOLLOWING IS NOT PROHIBITED IN nc ON A HIGH COST LOAN
HOME OWNERSHIP COUNSELING
WHAT TYPE OF LOAN IS NOT INCLUDED IN USURY LAWS OR NC;S USERY LAW
INVESTMENT PROPERTY LOAN