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49 Cards in this Set
- Front
- Back
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Maintains sound credit conditions, helps counteract inflation/deflation tredns, creates favorable economic climate
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federal reserve system
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the federal reserve system divides the counry into __ __ __
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12 federal reserve districts, each served by federal reser bank
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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
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insitutions known as fudicuiary lenders bc of their obligations to proec and preserve their depositor funds
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savings associations/thrifts/commercial banks
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fiduciary lenders are subject to standarsds and regulations established by the government agencies such as ___ and ___
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federal depoosit insurance coproation FDIC and the office of thrift supervision OTS
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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
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usually ave large amounts of money available for investment
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pension funds
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originate mortgage laons with money belonging to insurance companies, pension funds, and invdividulas , and with funds of thier own
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mortgage banking companies
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NOT lenders
-locate pontential borrowers, process preliminary loan applications, and submit for final apprival |
mortgage brokers
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re sells eexisting mortages and morgage back securiteies created by primary maket lenders
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secondary morgage market
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there are three secondary market:
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Fannie Mae (FNMA
Ginnie Mae (GSE) Freddie Mac (FHLMC) |
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-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)
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-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)
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can join forces in times of tight moeny and high interest rates through their tandem plan
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fannie mae and ginnie mae
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-originally the federal home loan mortgage corp
-conventional laons does not guarantee |
freddie mac FHLMC
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-loan that is not backed
-viewed as the most secure bc it LTV. |
conventional loan
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ration of debt to value is
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LTV
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FHA was created in 1934 under national housing act to :
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encourage improvement housing standards and conditions,
provide adequate home financing system through insurance of housing credit -exert a stabilizing influence on mortgage market |
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FHA, which operates under HUD, neigher builds homes nor lends money to purchase single fam homes, raither it ___
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insures loans on real property made by approved lending insistutions
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does the FHA insure property?
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no it insures lenders against loss in case of borrower defualt
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most popular FHA prgram is
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title 11, secton 203
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requiremets of FHA:
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pay a one time morgage insurance premium
aproved FHA appraiser |
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authorized to guarantee laons to purchase or construct home for eligible verterans
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department of verterans affair (VA) under the servicemens readustment act of 1944
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assit veternas in financing the purchase of homes with little or no down payment at low interset rate
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GI loans
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the VA will issue a __ __ __ __ fior the property being purchaed, statng its current market value based on VA approved appraisal
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certificate of reasonable value
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-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
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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
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purchase moeny mortgage
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includes real estate and alll fixtures
-extensiviley furnished condo -includes kitchen, fridge, dishwater -packaged both "real and personal" property |
package loans
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covers more than one parcel of land
-subdiviosion developments -partial release clasue |
blanket mortgage
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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
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partial release claus
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also known as overriding or all inclusiving mortgage
-2 loans into one |
wraparound mortgage
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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
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-finance construction of improvements
-commits full amount but makes partial installment payments -most dangerous -installemnt payments made to general conttractor |
construction loans
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in a construction loan, the borrower is expected to arrange for a __ laon that will repay or take out work completeted
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permanent laon, end loan, take out loan
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used for financing large commerical or industrial plants
-used for business purpose, sold to invester, leased back, receives cash |
sale and leaseback
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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
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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
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regular payments madde to borrower
based on equity of homeowner 62 older fixed income |
reverse annuity mortgages (RAM)
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-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
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loan limit in meckelnburg is:
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335,000 3.5% down
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uses same 2 ratios (income debt) as conventional loans
however; max proposed expense is 29 monthly dept income is 41% |
FHA loans
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uses total montly debt to income ration
set 41% borrowers montly income -uses residual income method |
VA loans
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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
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requires consumer be fully infomred of all finance charges and annual interest
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regulation Z
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in the case of mortgage loan made to finance purchase of a dwelling, the lender must compute and disclose ___
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APR annual percentage rate but doesnt have to indicate the total interest payable during the term of the loan
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penalties from regulation Z for noncompliace with advertising:
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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 |
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lenders must have reason why credit was denied in ___ days
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30
-under the equal credit opportunity |
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___ gives the right to check their own credit reports and demand mistakes be made
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fair credit reporting act
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created to ensure that the buyer and seller in a residential transactin involving a new first morgage laon have knowledge of all setlement cost
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RESPA real estate settlement procedures act
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