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66 Cards in this Set
- Front
- Back
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Intermediation
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Pooling the savings of many people.
When a financial institution acts as go-between for savers-depositors and borrowers. |
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Disintermediation
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Sudden Flow of funds out of thrift institutions and into general money markets
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Reintermediation
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Flow of funds into thrift institutions from general money market
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Fractional Reserve Banking
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Money "created" by the banking system through monetary policy
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Monetary Policy
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Policies of the Federal Reserve System that increase or decrease the supply of money in an effort to achieve designated economic goals
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Fiscal Policy
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Programs by the federal government that are intended to influence economic activity by making changes to government expenditures and taxation, implemented by the U.S. Treasury
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Trustor
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A borrower under a trust deed, who deeds property to trustee as security for the repayment of debt
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Trustee
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Third party who keeps title of property from Trustor as security until promissory note is repaid
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Beneficiary
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A lender under a note secured by a deed of trust
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Deed of Trust (Trust Deed)
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Instrument by which title to real estate is transferred to a third-party trustee as security for repayment of a real estate loan.
Used in California instead of a mortgage. |
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Amortized Loan
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A loan that is completely paid off, interest and principle, by a series of regular payments that are equal or near equal.
Also, called level-payment loan. |
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Ballon Payment
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One installment payment on an amortized note that is at least double the amount of a regular installment.
This is frequently a final payment on the due date. |
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Discount Rate
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The interest rate that the Federal Reserve Bank charges local member banks for funds they borrow.
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Prime Rate
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Interest rate individual banks charge their most creditworthy preferred corporate customers
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Easy Money
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Loose money policy of the Federal Reserve Board, indicating increased availability of money in circulation.
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Tight Money
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A situation in which the demand for money exceeds the supply, causing interest rates to increase and borrower qualifications to be tightened.
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Federal Fund Rates
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The rate one bank charges another bank for overnight use of excess reserves.
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Federal Reserve System
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Central banking system of the United States consisting of 12 Federal Reserve Banks and the Federal Reserve Board, which sets monetary policy.
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Installment Note
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A loan providing for payment of the principle in two or more installments.
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Installment Sales Contract
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A sale in which legal title to the property remains with the seller until terms agreed upon have been satisfied.
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Five-Step Financing Process
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The process of borrowing money that includes:
1. Application 2. Qualifying borrower and property 3. Processing documents 4. Closing 5. Servicing loan |
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Open-Market Operations
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Federal Reserve actions to influence the money supply by selling or buying government securities.
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Reserve Requirement
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The amount of reserve funds that banks and thrift institutions must set aside in order to protect depositors; it may be raised or lowered by the Federal Reserve.
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Straight Note
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"Interest Only Note"
A straight non-amortizing loan, in which only interest is paid. Interest can be paid periodically or at maturity, when principal is paid in lump sum. |
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Bridge Loan
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A loan that bridges the gap between two loans, usually for a short period.
"Swing Loan" |
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Commercial Bank
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A financial institution chartered by a state or federal government to receive, lend, and safeguard money and other items of value.
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Institutional Lender
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A savings banks, commercial bank, or insurance company that deals in real estate loans.
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Interim Loan
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Any short term financing, such as a Swing Loan, or a loan used to finance construction, due to the completion of the construction, which is usually paid off with the proceeds of a Take-Out Loan.
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Life Insurance Company
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A business that collects a person's savings by selling contracts (policies) paid for through periodic premiums and providing cash payment upon death.
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Loan-to-Value Ratio
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The amount of loan, expressed as a percentage of a property's value or sales price, whichever is lower.
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Correspondent
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An abbreviated term meaning mortgage loan correspondent. Applies when a mortgage company originates a loan for a investor.
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Equity Particiaption
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When a lender receives partial ownership interest in the project in order to increase its return on the loan.
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Federal Deposit Insurance Company (FDIC)
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Insures accounts at member banks up to $100,000
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Federal Home Loan Mortgage Corporation (FHLMC)
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An agency known as Freddie Mac, which provides a secondary market for savings banks and other institutions.
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Federal Housing Finance Board (FHFB)
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Federal agency that regulates the 12 Federal Home Loan Banks
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Federal Reserve Bank Board (FRBB)
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An agency that oversees the Federal Reserve System, regulates commercial banks, and regulates the flow of money and credit.
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Financial Institutions Reform, Recovery, and Enforcement Act (FIRREA)
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Federal law that restructured deposit insurance funds and regulatory system for thrifts.
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Financial Intermediary
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A depository that pools funds of clients and depositors and invests them into real estate loans.
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Home Mortgage Disclosure Act (HMDA)
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Requirements of the Community Reinvestment Act (CRA) including having lender retain borrowers information from which any discriminatory acts can be determined.
Primary information source is Fannie Mae/Freddie Mac loan application (known as the 1003), including borrower's ethnicity, race, and sex. If no info provided, info noted based on visual observation or surname. |
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Commercial Bank
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A financial institution chartered by a state or federal government to receive, lend, and safeguard money and other items of value.
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Institutional Lender
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A savings banks, commercial bank, or insurance company that deals in real estate loans.
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Interim Loan
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Any short term financing, such as a Swing Loan, or a loan used to finance construction, due to the completion of the construction, which is usually paid off with the proceeds of a Take-Out Loan.
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Life Insurance Company
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A business that collects a person's savings by selling contracts (policies) paid for through periodic premiums and providing cash payment upon death.
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Loan-to-Value Ratio
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The amount of loan, expressed as a percentage of a property's value or sales price, whichever is lower.
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Lock-in Clause
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A provision that prohibits paying off a loan before a specified date.
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Mutual Savings Bank
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A savings bank originated in the New England states in which the depositors place their savings with the right to borrow money for home loans.
There are no mutual savings banks in California. |
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Office of Thrift Supervisors (OTS)
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A branch of the U.S. Treasury that regulates all federally insured savings banks.
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Pension Funds
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Public and private retirement savings funds held in trust, which can be invested in real estate loans, stocks, or government securities.
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Rate Lock
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"Lock-in Loan"
Lender's written guarantee that the rate quoted will be good for a specific period of time. |
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Savings Association Insurance Fund (SAIF)
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Administered by the FDIC to insure deposits at savings banks and federal savings banks.
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Correspondent
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An abbreviated term meaning mortgage loan correspondent. Applies when a mortgage company originates a loan for a investor.
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Savings Bank
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Savings and loan association using newly permitted designations.
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Swing Loan
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Used to assist in purchase of replacement house before sale of original house is completed.
"Bridge Loan" |
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Take-Out Loan
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A permanent loan that pays off the existing construction loan.
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Thrift Institution
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Savings bank and other institutions that invest principally in real estate trust deeds.
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Time Deposit
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Savings account with a fixed maturity, as opposed to demand deposit.
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Trade Association
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Group that promotes the interests of the firms in their memberships and provide them with research and information.
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Usury
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The charging of interest in excess of that permitted by law.
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Equity Particiaption
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When a lender receives partial ownership interest in the project in order to increase its return on the loan.
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Federal Deposit Insurance Company (FDIC)
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Insures accounts at member banks up to $100,000
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Federal Home Loan Mortgage Corporation (FHLMC)
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An agency known as Freddie Mac, which provides a secondary market for savings banks and other institutions.
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Federal Housing Finance Board (FHFB)
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Federal agency that regulates the 12 Federal Home Loan Banks
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Federal Reserve Bank Board (FRBB)
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An agency that oversees the Federal Reserve System, regulates commercial banks, and regulates the flow of money and credit.
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Financial Institutions Reform, Recovery, and Enforcement Act (FIRREA)
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Federal law that restructured deposit insurance funds and regulatory system for thrifts.
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Financial Intermediary
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A depository that pools funds of clients and depositors and invests them into real estate loans.
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Home Mortgage Disclosure Act (HMDA)
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Requirements of the Community Reinvestment Act (CRA) including having lender retain borrowers information from which any discriminatory acts can be determined.
Primary information source is Fannie Mae/Freddie Mac loan application (known as the 1003), including borrower's ethnicity, race, and sex. If no info provided, info noted based on visual observation or surname. |
