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Flashcards in 12 Real Estate Financing Deck (34)
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1

Annual percentage rate (APR)

The relative cost of credit as determined in accordance with regulation Z of the Board of Governors of the federal reserve system for implementing the federal truth in lending act.

2

Blanket mortgage

A loan covering more than one property

3

CalVet loan

Home or farm loan procured through the California Veterans farm and home purchase program.

4

Conforming loan

Loan that meets Fannie Mae and Freddie Mac purchase criteria

5

Conventional loan

A loan secured by a mortgage or trust deed that is made without governmental underwriting (FHA-insured or VA-guaranteed)

6

Direct endorsement

A lender who is authorized to determine if a loan qualifies for FHA insurance

7

Discount rate

Interest rate charged member banks by federal reserve banks

8

Dodd-Frank Act

The Dodd-Frank Wall Street reform and consumer protection act signed into law in 2010

9

Due-on-sale clause

An acceleration clause in a real estate financing instrument granting the lender the right to demand full payment of the remaining indebtedness on a sale of the property.

10

Equal credit opportunity act

Act that prohibits lender discrimination against a borrower based on the fact that the source of income is public assistance.

11

Fannie Mae (federal national mortgage corporation)

Now a private corporation dealing in the secondary mortgage market.

12

Farmer Mac (Federal National mortgage association)

Now a private corporation providing a secondary mortgage for farms and rural housing.

13

Freddie Mac (Federal Home Mortgage Corporation)

Now a private secondary mortgage corporation

14

Ginnie Mae (Government National Mortgage Association)

A government corporation that provides assistance to federally related housing projects. Funds are raised by selling securities backed by pools of mortgages.

15

Hard money loans

Cash loans made by individual investors

16

Institutional lenders

A financial intermediary or depository, such as a savings association, commercial bank, or life insurance company, that pools the money of its depositors and then invests funds in various ways, including trust deeds and mortgage loans.

17

Loan estimate

New form mandated by the TILA-RESPA rule that helps consumers to understand the key features, costs, and risks of a mortgage loan. It must be provided to consumers no later than three business days after they submit a loan application.

18

Mortgage loan disclosure statement

The statement on a form approved by the real estate commissioner that is required by law to be furnished by a mortgage loan broker to the prospective borrower of a loan of a statutorily prescribed amount before the borrower becomes obligated to complete the loan.

19

Option ARM

Adjustable-rate Mortgage where the buyer has the option of making a minimum payment.

20

Participation loan

A loan where the lender takes an equity position in the property, as well as interest for the loan.

21

Points

-One point represents one percentage point of a loan amount
-May be charged by lenders at the time of loan funding to increase the loan’s effective interest rate.

22

Predatory lending

Making loans without regard to payment ability of borrower in order to obtain the security foreclosure.

23

Primary mortgage market

Composed of lenders that deal directly with borrowers

24

Private mortgage insurance (PMI)

Mortgage guaranty insurance available to conventional lenders on the high-risk portion of a loan, with payment included in the borrower’s loan installments.

25

Qualified mortgage

Loans that meet standards for HUD insurance

26

Real estate investment trust (REIT)

Way for investors to pool funds for investments in real estate and mortgages, with profits taxed to individual investors rather than to th corporation.

27

Reverse mortgage

Mortgage where the borrower receives payments and does not repay loan until the property is sold or the borrower dies.

28

Secondary financing

A loan secured by a second ( or subsequent) mortgage or trust deed on real property

29

Secondary mortgage market

-Investment opportunities involving real property securities, other than direct loans from lender to borrower
-loans may be bought, sold, or pooled to form the basis for mortgage backed securities

30

Subprime lender

A lender who will take out loans that are considered too risky by other lenders. Subprime loans bear a higher rate of interest.