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57 Cards in this Set
- Front
- Back
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The clause in the promissory note that states that the note becomes due if the collateral (property) is sold is called a
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Allienation Clause
(Due on Sale Clause) |
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The clause in the note that allows the lender to ask the trustee to post the property for sale is called the
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Acceleration Clause
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The type of loan that requires monthly payments of principal and interest as well as 1/12 of annual property taxes and hazard insurance premiums is called a
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Budget Loan
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A last payment at the end of a loan term that is larger than the preceding regular payments is called a
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Balloon Loan
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The main type of loan popular until 1930's that was a non-amortizing loan was called a
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Term Loan
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A type of loan whereby the monthly payments are based on a longer period of time than the actual length of the loan is called a
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Partially Amortized Loan
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A loan secured by two or more properties is called a
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Blanket Loan
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One or more ____________ can be paid by the borrower at closing to lower the interest rate of the loan.
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Discount Point
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Most borrowers pay ½ to one _____________ to the lender at closing to pay the loan officer’s commission.
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Origination Point
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In mortgage terms, one percent of the loan amount is called a
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Point
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PMI Private Mortage Insurance, who is insured?
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The Lender
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The use of _____ provided by private sector companies allows as little as 5 % down by a borrower and a 95% LTV ratio.
However, ____ insures only the top 20 % of the loan whereas FHA insures all of the loan. |
Private Mortgage Insurance (PMI)
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was created by the Federa Housing Act in 1934. It is not a mortgage Lender, it is a mortgage Insurer.
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Federal Housing Authority (FHA)
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Everything else being equal, the more___________ paid by the borrower, the Higher the yield to the lender
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Discount Points.
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combines the interest on the loan with All other charges related to the loan.
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Annual Percentage Rate (APR)
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mortgage whereby the interest rate adjusts typically every 12 months.
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Adjustable Rate Mortage( ARM)
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cap of 1-2% per adjustment period (usually annually).
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Annual Interest Rate Caps
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Interest rate adjustment cap of 7 % over
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Life of the Loan Interest Rate Caps
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payment increase cap of 7%.
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P&I Cap
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Texas is a ____ Theory state in which the title is held by the borrower and a ___ is conveyed to a 3rd party trustee to be held until the loan is paid in full. he Non-Judicial method of foreclosure is used.
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Lien Theory
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the actual title to the property is conveyed to the lender in the form of a mortgage until the loan is paid off. the Judicial method of foreclosure is used.
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Title theory
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A type of loan that is repaid only when the collateral (home) is sold, the loan is refinanced or the borrower dies and the estate repays the loan is called a
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reverse mortgage
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is the acronym for principal, interest, taxes and insurance.
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PITI
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* The Federal Trade Commission (FTC) can levy fines for violations of
_______. Regulates advertising |
Regulation Z
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A statement made in advertising that creates an obligation to disclose terms to a consumer is called a
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Trigger term
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1. Cash Price or Amount of the Loan
2. Amount of the Down Pmt 3. Number amount and Frequency Of Payments 4. APR 5. Total Payment |
Know the 5 diclosures when using a trigger term
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instead of paying down, you are adding to the principle
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Negative Amorization
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The lower the LTV the more down payment on a house
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The lower the LTV the more down payment on a house
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typically ½ to 5/8 % lower rate than 30 year fixed rate mortgages due to lower Maturity risk to lenders. are tied to an index, usually the
One Year treasury note |
What is the interest rate in Arm, what is it usually tied to.
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the actual title to the property is conveyed to the lender in the form of a mortgage until the loan is paid off. the Judicial method of foreclosure is used.
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Title theory
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A fixed rate mortgage with lower payments based on lower than market rates in the first years of the life of the loan is called a. Always leads to negative amortization
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Graduated Payment Mortgage
(Buy Down) |
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A type of loan that is repaid only when the collateral (home) is sold, the loan is refinanced or the borrower dies and the estate repays the loan is called a
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reverse mortgage
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is the acronym for principal, interest, taxes and insurance.
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PITI
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* The Federal Trade Commission (FTC) can levy fines for violations of
_______. Regulates advertising |
Regulation Z
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A statement made in advertising that creates an obligation to disclose terms to a consumer is called a
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Trigger term
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1. Cash Price or Amount of the Loan
2. Amount of the Down Pmt 3. Number amount and Frequency Of Payments 4. APR 5. Total Payment |
Know the 5 diclosures when using a trigger term
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instead of paying down, you are adding to the principle
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Negative Amorization
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The lower the LTV the more down payment on a house
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The lower the LTV the more down payment on a house
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typically ½ to 5/8 % lower rate than 30 year fixed rate mortgages due to lower Maturity risk to lenders. are tied to an index, usually the
One Year treasury note |
What is the interest rate in Arm, what is it usually tied to.
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Chapter 11
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Loan Application Process
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?????
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What do lenders look at, what turns them off an applicant
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the lender outlineing parts of the city they do not want to do a loan with
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Red Lining
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Interm Loan = Construction Loan
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Interm Loan = Construction Loan
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Sale The House
Get foreclosed on Or I could give you the deed to the property in leu of foreclosure. Instead of making the loan void |
About to be foreclosed on 3 options
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Fair Housing Act, what people are protected against discrimination
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Make sure Lean Theory vs Title Theory, Lean Theory non judicial, Title Theory they use the courts.
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Make sure Lean Theory vs Title Theory, Lean Theory non judicial, Title Theory they use the courts.
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• Piti should not exceed 28% of gross monthly income.
•Fixed Monthly expenses should not exceed 36% of gross monthly income. * Fixed Monthly Expenses is defined as PITI plus any recurring, regular expenses (child support, auto payment, etc.) owed for the subsequent two years. |
28-36 Ratio for qualifying for a loan
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due to lower Maturity risk to lenders
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Why is an adjustable rate mortgage lower than a 30 year fixed rate. Why can they offer a lower rate.
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FHA do they loan money, no they do not they insure loans that all they do
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FHA do they loan money, no they do not they insure loans that all they do
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No pride of ownership
Tend to depreciate faster Rental Properties are riskier Value of property is based on risk |
Why are lenders not crazy about making loans on investment property
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When a loan balance increases to the point where it is greater than the value of the property collateral (ie. home), the borrower is said to be
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Under Water
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The practice of lenders refusing to make loans in certain neighborhoods of a city is called
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Red Lining.
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A type of mortgage that includes both real property and personal property called a
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Package Mortgage
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The flow of money out of Savings and Loans to other securities
(Govt. T-bills) is called |
Disintermediation.
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Credit Union underwriting can be more lenient than that of banks and Savings and Loans.
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Credit Union underwriting can be more lenient than that of banks and Savings and Loans.
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Those individuals who bring borrowers and lenders together but who do not actually lend or service the loans are called
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Mortgage Broker.
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Another term for computerized loan origination which allows a borrower to receive conditional approval of a loan in less than one hour is called
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Desktop Underwriting.
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