Unit 16: Real Estate

Front 1

The real estate financing market has the following three basic components

Back 1

Government influences

The primary mortgage market

The secondary mortgage market

Front 2

Maintain sound credit conditions, helps counteract inflationary and deflationary trends, and creates a favorable economic climate

Back 2

The federal reserve system

Front 3

Decreases money,

flow slows economy,

and purchases, slows inflation

Back 3

Increasing reserve requirements raises rates

Front 4

Increases money for loans

stimulates market

increases inflation

Back 4

Decreasing reserve requirements lowers rates

Front 5

The short term interest rate charged to a banks largest, most creditworthy customers

Back 5

The prime rate

Front 6

The rate charged by the fed when it lends money to its member banks

Back 6

Discount rate

Front 7

The fed also has the ability to increase or decrease the supply of money in the market through?

Back 7

purchase and sale of securities

Raise and lower the reserve requirements and discount rate

Front 8

Is made up of the lenders that originate mortgage loans

Back 8

The primary mortgage market

Front 9

is anyone who, for compensation or expectation of compensation, takes a residential mortgage loan by phone or in person

Back 9

Mortgage loan originator

MLO

Front 10

In addition to the primary mortgage market, we’re loans are originated there is a?

In this market, various agencies purchase existing mortgage is from banks and savings associations in assemble. Those mortgages into packages called (blocks or pools).

Back 10

Secondary mortgage market

Front 11

Is the government sponsored Enterprise that provides a secondary market for mortgage loans dealing in conventional federal housing administration, (FHA) and Department of Veterans Affairs (VA) loans

Back 11

Fannie Mae

Front 12

Administer special assistance programs and guarantees mortgage backed securities using FHA and VA loans as collateral

A wholly owned government corporation within the department of housing and urban development (HUD)

Back 12

Ginnie Mae

Front 13

Is a government sponsored enterprise that provides a secondary market primarily for conventional loans

Back 13

Freddie Mac

Front 14

(Also called an interest only loan or term loan) is an nonamortized loan that essentially divides the loan into two amounts to be paid off separately

Back 14

Straight loans

Front 15

(Also called an interest only loan or term loan) is an nonamortized loan that essentially divides the loan into two amounts to be paid off separately

Back 15

Straight loan

Front 16

(Also called a direct reduction loan)

partially pays off both principal and interest

Back 16

Amortized loan

Front 17

Front (Term)

Back 17

Calculating interest due

Front 18

The most frequently used plan is the?

Also called (a level-payment loan)

Back 18

Fully amortized loan

Front 19

Generally originate at one rate of interest and fluctuate up or down during the loan term based on some objective economic indicator

Back 19

Adjustable rate mortgages (arms)

Front 20

When the periodic payments are not enough to fully amortized loan, by the time, the final payment is due, the final payment is larger than the others. This is called a?

Back 20

Balloon payment loans

Front 21

also called a rapid pay off mortgage

Uses a fixed interest rate, but payments of principle are increased, according to an index for a schedule

Back 21

Growing equity mortgage is (GEMS)

Front 22

allows people 62 or older to borrow money against the equity. They have built in their home.

Back 22

Reverse mortgages

Front 23

is one in which the borrower is not held personally responsible for the loan

Back 23

Nonrecourse loan

Front 24

Mortgage loans are generally classified based on their?

Back 24

Loan- to- value (LTV) ratios

Front 25

Front (Term)

Back 25

LTV ratios

Front 26

Loans are viewed as the most secure loans, because their LTV ratios are often lowest

Back 26

Conventional loans

Front 27

One way a borrower can obtain a mortgage loan with a lower down payment is my obtaining?

Back 27

Private mortgage insurance

Front 28

refers to a loan that is insured by the agency

Back 28

FHA insured loan

Front 29

The (upfront premium) is charged at closing, and can be financed into the mortgage loan

Back 29

Mortgage insurance premium

(MIP)

Front 30

The department of Veterans Affairs VA is authorized to guarantee loans to purchase were constructed homes for eligible veterans and their spouses

Back 30

VA loan

Front 31

The Va also issues a?

states the properties current market value based on the VA approved appraisal and place is a ceiling on the amount of a VA loan allowed for the property

Back 31

Certificate of reasonable value, (CRV)

Front 32

is a note in mortgage created at the time of purchase when the seller agrees to Finance all or part of the purchase price and consists of a first or junior lien, depending on whether prior mortgage liens exist

Back 32

Purchase money mortgage is

Front 33

Includes real and personal property

Back 33

Package loan

Front 34

What loan covers more than one parcel or lot?

Back 34

Blanket loan

Front 35

Enable a borrow with an existing mortgage or deed of trust loan, to obtain additional financing from a second lender, without paying off the first loan

Back 35

Wraparound loans

Front 36

What loan secures a note, executed by the borrower to the lender

Back 36

Open-end loans

Front 37

also (called interim financing) is made to Finance the construction of improvements on real estate such as homes apartments and office buildings

Back 37

Construction loans

Front 38

is a way to temporarily or permanently lower the initial interest rate on a mortgage or deed of trust loan

Back 38

Buydowns

Front 39

Provide a source of funds using the equity built up in a home

Back 39

Home equity loans

Front 40

often called (regulation Z) requires that credit institutions inform forwards of all finance charges in the true interest rate before alone is completed

Back 40

Truth in lending act (TILA)

Front 41

Specific credit terms, such as down payment monthly payment dollar amount of the finance charge for term of the loan are called

Back 41

Trigger terms

Front 42

prohibits lenders, and others, who Grant, or arrange credit to consumers from discriminating against credit applications

Back 42

Equal credit opportunity act, (ECOA)

Front 43

refers to the responsibility of financial institutions to help meet. Their communities needs for low income and moderate income housing.

Back 43

Community reinvestment act (CRA)

Front 44

Applies to any residential real estate transaction involving a new first mortgage loan

Back 44

Real estate settlement procedures act (RESPA)