13- Types of Mortgages & Sources of Finance Flashcards
What is the major source of funds for large commercial real estate developments?
Life insurance companies
Prior to the deregulation of the banking industry in the 1980s, which institutions were dominant in providing funds for the purchase of single-family residences?
Saving and loan associations
What will be the effect if the Federal Reserve Board decides to purchase government securities in the open market?
The money supply will increase in the interest rates will decrease
Which group of financial institutions traditionally preferred to make short-term loans for construction?
Commercial banks
Which mortgage market is where loans originated in the primary market are sold?
The secondary mortgage market
How are mortgage loan originators usually compensated for their services?
Finder’s fee or commission
An area with insufficient local funds is called….
A capital deficit area
When depositors withdraw their savings from depository institutions what occurs?
Disintermediation
A blanket mortgage that allows for the release of a single parcel upon payment of a specified sum contains which clause?
Release
What is the role of the Federal housing administration?
Loan insurance
Interest rates for Federal housing administration mortgages are determined by…
The market
The Federal National Mortgage Association was originally formed to purchase what type of loans?
FHA
How is a construction loan paid to the borrower?
In draws after specific stages of construction have been completed
If a mortgage loan payment consists of interest only, the final payment which includes the full amount borrowed is called a:
Balloon payment
The Federal Reserve has several methods for controlling the money supply. Which of those methods is generally considered to be the least effective method?
Adjusting the discount rate
