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46 Cards in this Set
- Front
- Back
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Are conventional loans guaranteed are insured by governement agencies?
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No
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Who provides PMI?
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private companies. MGIC Mortgage Guaranty insurance Corp.
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Who determines the max. loan amounts on conventional loans?
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The lender.
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Who sets the limits for loans bought by Freddie and Fannie
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Fdmc and fnma
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What are loans called that exceeds fnma and fdmc limits?
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Jumbo or non-conforming loans.
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What is an escrow account?
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Money paid each month to cover property taxes, homeowner's insurance, and PMi(if financed).
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2 requirements for secondary financing.
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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. |
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When are appraisals for conventional loans made?
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After a submitted loan application and signed sales contract.
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What repairs are to be made per the appraisal on a conventional loan?
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Only structural repairs.
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When is cosmetic repair work required for a conventional loan?
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If PMI is required.
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How is PMI calculated?
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As a percentage of the loan.
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How is PMI calculated when paid in cash?
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90% loan=2% premium of loan amount.
95%=2.5% |
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How is PMI calculated when financed?
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1/4% or .0025 of loan amount. =annually
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What are FHA loans?
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Insures loans.
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What are 3 main purposes of FHA loans?
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promote improved housing standards. assist in the stabilization of the mortgage market. provide mortgage loan insurance.
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What is the name for premium's charged to FHA loans?
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MIP Mortgage insurance premiums.
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How much of a cash investment do FHA loans require?
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3% of appraised value of sales price whichever is less.
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Who sets the FHA max. loan amount.
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the fha
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How long are appraisals good for government loans?
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existing=6 months, new construction = 12 months
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Name 3 FHA programs for loans.
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Standard 203b, Veterans, sect. 245 GMP
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Are 2nd mortgages allowed with FHA loans.
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Only with FHA approval or after the loan is made.
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What is the maximum entitlement for a VA loan?
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$60K.
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What is the maximum VA Loan amount?
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None set by law.
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Another name for a VA appraisal report.
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Certificate of Reasonable Value.
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What is RMFA?
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Ga. Residential Mortgage Fraud Act. Increases penalties currently in place that are imposed on licensees found guilty of committing mortgage fraud.
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What activities are considered mortgage fraud?
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making false statements or representations.
receiving proceeds/funds in connection with closings. filing false documents. |
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What entities are authorized to conduct investigations for mortgage fraud.
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DA's and the Attorney General of the State.
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What is the max. punishment for mortgage fraud?
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1-10 years. nte $5000.
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What is the max. punishment for a pattern of mortgage fraud?
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3-20yrs. nte $100,000.
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What does RICO do?
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Includes mortgage fraud as a racketeering violation.
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What is the punishment according to RICO?
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5-20 years. $25K or triple the amount gained.
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What is another name for the Federal Consumer Credit Protection Act?
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Truth in lending Act.
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What is the Truth in Lending Act?
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requires full disclosure of the cost of credit. Allows borrowers to rescind transactions in some circumstances.
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Who administers the Truth in Lending Act?
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The FTC under Regulation Z
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What types of transactions are excluded from the Truth in Lending Act?
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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. |
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What are the 2 most important disclosures in a real estate transaction?
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totoal of all credit charges over the life of the loan.
APR. |
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How long does one have to rescind a transaction according to the Truth in Lending law?
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until midnight of the tird day following closing or delivery of the credit statement.
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According to the Consumer Credit Act which items may be listed without anything else?
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cash price and APR
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What are the penalties for violating the Truth in Lending act?
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criminal 1 yre in jail $5k.
civil 2X financing charge/ $1K max. actual court fees, etc. |
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What does RESPA do?
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gives infor. to buyers on the nature and costs of the settlement process so they can shop for settlement services.
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What types of loans are covered by RESPA?
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federal governement; savings and loans; loans sold to FNMA, FDMC, gnma.
loans by lenders who invest $1m. annually. |
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What are the benefits of RESPA?
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HUD info. book to borrower.
Lender gives borrower good faith estimate of all closing costs. |
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When is the Hud info. booklet given to the consumer?
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@ application or mailed within 3 days.
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What are the exceptions to using HUD-1?
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Gborrowers pay no costs or costs are fixed.
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What does RESPA prohibit?
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kickbacks and unreasonable excrow accoutns
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What are the 2 types of loan assumptions?
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assuming and agreeing to pay
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