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49 Cards in this Set

  • Front
  • Back
Maintains sound credit conditions, helps counteract inflation/deflation tredns, creates favorable economic climate
federal reserve system
the federal reserve system divides the counry into __ __ __
12 federal reserve districts, each served by federal reser bank
made up of lenders that originate mortgage laons

-these lenders make money available directly to borrowers

-once loans are made they are sold to investors
primary mortgage market
insitutions known as fudicuiary lenders bc of their obligations to proec and preserve their depositor funds
savings associations/thrifts/commercial banks
fiduciary lenders are subject to standarsds and regulations established by the government agencies such as ___ and ___
federal depoosit insurance coproation FDIC and the office of thrift supervision OTS
large sums of moeny from the premiums paid by their policyholder

-invest money in large, ong term loans that finance commercial, industrial and larer multifamily properties rather than single fam morgage
insurance companies
usually ave large amounts of money available for investment
pension funds
originate mortgage laons with money belonging to insurance companies, pension funds, and invdividulas , and with funds of thier own
mortgage banking companies
NOT lenders

-locate pontential borrowers, process preliminary loan applications, and submit for final apprival
mortgage brokers
re sells eexisting mortages and morgage back securiteies created by primary maket lenders
secondary morgage market
there are three secondary market:
Fannie Mae (FNMA

Ginnie Mae (GSE)

Freddie Mac (FHLMC)
-originally named federal national mortgage association

-privately owned corp, considered quasi governmental

-block or pool or forgages from a lender in exchange for morgage backed securities

-oldest and largest

-FHA VA conventional laons
fannie mae (FNMA)
-orginally called government national mortgage association
-eistas as a coproation wihtout capital stock

-division of HUD

-administer special assistance program

-FHA and VA laons
ginnie mae (GNMA)
can join forces in times of tight moeny and high interest rates through their tandem plan
fannie mae and ginnie mae
-originally the federal home loan mortgage corp

-conventional laons

does not guarantee
freddie mac FHLMC
-loan that is not backed

-viewed as the most secure bc it LTV.
conventional loan
ration of debt to value is
LTV
FHA was created in 1934 under national housing act to :
encourage improvement housing standards and conditions,

provide adequate home financing system through insurance of housing credit

-exert a stabilizing influence on mortgage market
FHA, which operates under HUD, neigher builds homes nor lends money to purchase single fam homes, raither it ___
insures loans on real property made by approved lending insistutions
does the FHA insure property?
no it insures lenders against loss in case of borrower defualt
most popular FHA prgram is
title 11, secton 203
requiremets of FHA:
pay a one time morgage insurance premium

aproved FHA appraiser
authorized to guarantee laons to purchase or construct home for eligible verterans
department of verterans affair (VA) under the servicemens readustment act of 1944
assit veternas in financing the purchase of homes with little or no down payment at low interset rate
GI loans
the VA will issue a __ __ __ __ fior the property being purchaed, statng its current market value based on VA approved appraisal
certificate of reasonable value
-offers programs to help purchase or operate family farms

-generally areas with population of fewer than 10,000 that are not suburbs of urban areas

-low to income and moderate income

interest as low as 1 %,depending on borrows income

-repayment period 40 years
Rural Economic and Community Development Services
owner financing given at the time purchase to faciliate the sale and refers to the insturment given by the purchaser to a seller who take back a note and mortgage for part or all of the purchase price
purchase moeny mortgage
includes real estate and alll fixtures

-extensiviley furnished condo

-includes kitchen, fridge, dishwater

-packaged both "real and personal" property
package loans
covers more than one parcel of land

-subdiviosion developments

-partial release clasue
blanket mortgage
release of any one lot or parcel from the lien by repaying a definite amount of loan at closing without triggering a due on sale claus
partial release claus
also known as overriding or all inclusiving mortgage

-2 loans into one
wraparound mortgage
act as a line of credit or equity line allowing the mortgagee to make addition future advances of funds to the mortagor

-home equity laons
open end mortgages
-finance construction of improvements

-commits full amount but makes partial installment payments

-most dangerous

-installemnt payments made to general conttractor
construction loans
in a construction loan, the borrower is expected to arrange for a __ laon that will repay or take out work completeted
permanent laon, end loan, take out loan
used for financing large commerical or industrial plants

-used for business purpose, sold to invester, leased back, receives cash
sale and leaseback
way to lower the initial interest rate on mortage/deed of trust

-lump sum is paid in cash to lender at closing

most common is 3-2-1
buydown
source of funds for homewoners who wish to finance the purchase of expensive items

consoldate existing insallment loans on credit card

pay for medical, education
home equity loans
regular payments madde to borrower

based on equity of homeowner

62 older

fixed income
reverse annuity mortgages (RAM)
-proposed monthly housing exense can usually be no more than 28 percent month gross income

no more than 36 percent buyers gross income
conventiional conforming loans
loan limit in meckelnburg is:
335,000 3.5% down
uses same 2 ratios (income debt) as conventional loans

however; max proposed expense is 29

monthly dept income is 41%
FHA loans
uses total montly debt to income ration

set 41% borrowers montly income

-uses residual income method
VA loans
requires that credit insitiutions inform borrowers of the true cost of obtiing credit so that borrowers can compare cost of various lenders

-applies to loans 25,000 or less
regulation Z
requires consumer be fully infomred of all finance charges and annual interest
regulation Z
in the case of mortgage loan made to finance purchase of a dwelling, the lender must compute and disclose ___
APR annual percentage rate but doesnt have to indicate the total interest payable during the term of the loan
penalties from regulation Z for noncompliace with advertising:
up to 10,000 for engaging unfair practice

creditor may be liable for twice amount min 100-max1000

willful violation is a misdeameanor pnishable by fine up to 5000
lenders must have reason why credit was denied in ___ days
30
-under the equal credit opportunity
___ gives the right to check their own credit reports and demand mistakes be made
fair credit reporting act
created to ensure that the buyer and seller in a residential transactin involving a new first morgage laon have knowledge of all setlement cost
RESPA real estate settlement procedures act