Reading...
Play button
Play button
Use LEFT and RIGHT arrow keys to navigate between flashcards;
Use UP and DOWN arrow keys to flip the card;
H to show hint;
A reads text to speech;
41 Cards in this Set
- Front
- Back
|
Adjustable Rate Mortgage (ARM)
|
A loan which allows for the interest rate to adjust periodically in relationship to a predetermined index based on the maintenance of a pre-established margin
|
|
|
Amortized Loan
|
A loan in which the principal as well as the interest is payable in monthly or other periodic installments over the term of the loan page 261
|
|
|
Balloon Payment
|
A final payment of a mortgage loan that is considerably larger than the required periodic payments because the loan amount was not fully amortized page 261
|
|
|
Blanket Loan
|
A mortgage covering more than one parcel of real estate, providing for each parcel's partial release from the mortgage lien upon repayment of a definite portion of the debt page 272
|
|
|
Buydown
|
A financing technique used to reduce the monthly payments for the first few years of a loan. funds in the form of discount points are given to the lender by the builder or seller to buy down or lower the effective interest rate paid by the buyer, thus reducing the monthly payments for a set time. 274
|
|
|
Community Reinvestment Act of 1977 (CRA)
|
Under the act, financial institutions are expected to meet the deposit and credit needs of their communities;participate and invest in local community development and rehabilitation projects; and participate in loan programs for housing, small businesses, and small farms 277
|
|
|
Computerized loan origination system (CLO)
|
An electronic network for handling loan applications through remote computer terminals linked to various lenders' computers 278
|
|
|
Construction Loan
|
a short-term loan usually made during the construction phase of a building project
|
|
|
Conventional Loan
|
A loan that requires no insurance or guarantee page 264
|
|
|
Equal Credit Opportunity Act (ECOA)
|
the federal law that prohibits discrimination in the extension of credit because of race, color, religion, national origin, sex, age, or marital status
|
|
|
Fannie Mae
|
a quasi-government agency established to purchase any kind of mortgage loans in the secondary mortgage market from the primary lenders
|
|
|
Farm Credit System (Farm Credit)
|
A federal agency of the Department of Agricultural that offers programs to help families purchase or operate family farms 271
|
|
|
Farm Service Agency (FSA)
|
An agency of the federal government that provides credit assistance to farmers and other inividuals who live in rural areas 271
|
|
|
Farmer Mac
|
A government sponsored enterprise that operates similarly to Fannie Mae and Freddie Mac but for agricultural loans. page 272
|
|
|
Federal Deposit Insurance Corp. FDIC
|
An independent federal agency that insures the deposits in commercial banks 258
|
|
|
Federal Funds Rate
|
Rate recommended by the federal reserve for the member banks to charge each other on short term loans These rates form the basis on which the banks determine the percentage rate of interest they will charge their loan customers.
|
|
|
Federal Reserve System
|
The country's central banking system which is responsible for the nation's monetary policy by regulating the supply of money and interest rates 256
|
|
|
FHA Loan
|
A loan insured by the Federal Housing Administration and made by an approved lender in accordance with the FHA's regulations 268
|
|
|
Freddie Mac
|
a corporation established to purchase primarily conventional mortgage loans in the secondary mortgage market
|
|
|
Ginnie Mae
|
a government agency that plays an important role in the secondary market; it sells mortgage-backed securities that are backed by pools of FHA and VA loans
|
|
|
Growing-equity mortgage:
|
a loan in which the monthly payments increase annually, with the increased amount being used to reduce directly the principal balance outstanding and thus shorthen the overall term of the loan
|
|
|
Home equity loan:
|
a loan under which a property owner uses his/her residence as collateral and can then draw funds up to a prearranged amount against the property
|
|
|
Index Method
|
The appraisal method of estimating building costs by multiplying the original cost of the property by a percentage factor to adjust for current construction costs 344
|
|
|
Interest only mortgage
|
A mortgage that only requires the payment of interest for a stated period of time with the principal due at the end of the term 261
|
|
|
Loan-to-value-ratio
|
the relationship between the amount of the mortgage loan and the value of the real estate being pledged as collateral
|
|
|
Margin
|
can't find in book
|
|
|
Office of Thrift Supervision
|
monitors and regulates the savings and loan industry
|
|
|
Open End Loan
|
a mortgage loan that is expandable by increments up to a maximum dollar amount, the full loan being secured by the same original mortgage
|
|
|
Package Loan
|
a real estate loan used to finance the purchase of both real and personal property
|
|
|
Primary mortgage market:
|
the mortgage market in which loans are originated, consisting of lenders such as commercial banks, savings and loan associations, and mutual saving banks
|
|
|
Private Mortgage Insurance
|
insurance provided by private carrier that protects a lender against a loss in the event of a foreclosure and deficiency
|
|
|
Purchase-money Mortgage (PMM)
|
a note secured by a mortgage or deed of trust given by a buyer, as a borrower, to a seller, as a lender, as a part of the purchase price of the real estate
|
|
|
Regulation Z
|
implements the Truth-in-Lending Act requiring the credit institutions inform borrows of the true cost of obtaining credit
|
|
|
Reverse Annuity Mortgage (RAM)
|
a loan under which a homeowner receives monthly payments based on his/her accumulated equity rather than a lump sum
|
|
|
Sale and Lease Back
|
a transaction in which an owner sells his/her improved property and, as part of the same transaction, signs a long-term lease to remain in possession of the premises
|
|
|
Secondary Martgage market
|
Secotndary mortgage market— a market for the purchase and sale of existing mortgages, designed to provide greater liquidity for mortgages
|
|
|
Straight Loan
|
A loan in which only interest is paid during the term of the loan, with the entire principal amount due with the final interest payment page 261
|
|
|
Trigger Terms
|
Specific credit terms, such as down payment, monthly payment, and amount of finance charge or term of loan page 276
|
|
|
Truth in Lending Act
|
the federal act that requires that credit institutions inform borrows of the true cost of obtaining credit
|
|
|
VA Loan
|
A mortgage loan on approved property made to a qualified veteran by an authorizedd lender and guaranteed by the Department of Veterans Affairs in order to limit the lender's possible loss page 270
|
|
|
Wraparound loan
|
A method of refinancing in which the new mortgage is placed in a secondary, or subordinate, position; the new mortgage includes both the unpaid principal balance of the first mortgage and whatever additional sums are advanced by the lender. In essence it is an additional mortgage in which another lender refinances a borrower by lending an amount over the existing first mortgage amount without distrubing the existence of the first mortgage page 273
|
