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46 Cards in this Set

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Are conventional loans guaranteed are insured by governement agencies?
No
Who provides PMI?
private companies. MGIC Mortgage Guaranty insurance Corp.
Who determines the max. loan amounts on conventional loans?
The lender.
Who sets the limits for loans bought by Freddie and Fannie
Fdmc and fnma
What are loans called that exceeds fnma and fdmc limits?
Jumbo or non-conforming loans.
What is an escrow account?
Money paid each month to cover property taxes, homeowner's insurance, and PMi(if financed).
2 requirements for secondary financing.
At least 10% of the sales price meust be paid to the borrower in cash.
Must not exceed the amount of cash invested by the borrower.
When are appraisals for conventional loans made?
After a submitted loan application and signed sales contract.
What repairs are to be made per the appraisal on a conventional loan?
Only structural repairs.
When is cosmetic repair work required for a conventional loan?
If PMI is required.
How is PMI calculated?
As a percentage of the loan.
How is PMI calculated when paid in cash?
90% loan=2% premium of loan amount.
95%=2.5%
How is PMI calculated when financed?
1/4% or .0025 of loan amount. =annually
What are FHA loans?
Insures loans.
What are 3 main purposes of FHA loans?
promote improved housing standards. assist in the stabilization of the mortgage market. provide mortgage loan insurance.
What is the name for premium's charged to FHA loans?
MIP Mortgage insurance premiums.
How much of a cash investment do FHA loans require?
3% of appraised value of sales price whichever is less.
Who sets the FHA max. loan amount.
the fha
How long are appraisals good for government loans?
existing=6 months, new construction = 12 months
Name 3 FHA programs for loans.
Standard 203b, Veterans, sect. 245 GMP
Are 2nd mortgages allowed with FHA loans.
Only with FHA approval or after the loan is made.
What is the maximum entitlement for a VA loan?
$60K.
What is the maximum VA Loan amount?
None set by law.
Another name for a VA appraisal report.
Certificate of Reasonable Value.
What is RMFA?
Ga. Residential Mortgage Fraud Act. Increases penalties currently in place that are imposed on licensees found guilty of committing mortgage fraud.
What activities are considered mortgage fraud?
making false statements or representations.
receiving proceeds/funds in connection with closings.
filing false documents.
What entities are authorized to conduct investigations for mortgage fraud.
DA's and the Attorney General of the State.
What is the max. punishment for mortgage fraud?
1-10 years. nte $5000.
What is the max. punishment for a pattern of mortgage fraud?
3-20yrs. nte $100,000.
What does RICO do?
Includes mortgage fraud as a racketeering violation.
What is the punishment according to RICO?
5-20 years. $25K or triple the amount gained.
What is another name for the Federal Consumer Credit Protection Act?
Truth in lending Act.
What is the Truth in Lending Act?
requires full disclosure of the cost of credit. Allows borrowers to rescind transactions in some circumstances.
Who administers the Truth in Lending Act?
The FTC under Regulation Z
What types of transactions are excluded from the Truth in Lending Act?
business or commercial loans.
loans to govt. agencies.
loans over $25K when secured by personal property.
loans made without finance charges including interest and paid with four or fewer installments.
residential properties containing more than 4 units.
What are the 2 most important disclosures in a real estate transaction?
totoal of all credit charges over the life of the loan.
APR.
How long does one have to rescind a transaction according to the Truth in Lending law?
until midnight of the tird day following closing or delivery of the credit statement.
According to the Consumer Credit Act which items may be listed without anything else?
cash price and APR
What are the penalties for violating the Truth in Lending act?
criminal 1 yre in jail $5k.
civil 2X financing charge/ $1K max.
actual court fees, etc.
What does RESPA do?
gives infor. to buyers on the nature and costs of the settlement process so they can shop for settlement services.
What types of loans are covered by RESPA?
federal governement; savings and loans; loans sold to FNMA, FDMC, gnma.
loans by lenders who invest $1m. annually.
What are the benefits of RESPA?
HUD info. book to borrower.
Lender gives borrower good faith estimate of all closing costs.
When is the Hud info. booklet given to the consumer?
@ application or mailed within 3 days.
What are the exceptions to using HUD-1?
Gborrowers pay no costs or costs are fixed.
What does RESPA prohibit?
kickbacks and unreasonable excrow accoutns
What are the 2 types of loan assumptions?
assuming and agreeing to pay