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Real Estate > Unit 13: Government Involvement in Real Estate Financing > Flashcards

Unit 13: Government Involvement in Real Estate Financing Flashcards

1
Q

By law, FHA loans cannot charge __________ _________.

A

prepayment penalties.

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2
Q

The Federal Reserve System (Fed) consists of 12 _______ _______ ________ _____.

A

federal reserve district banks

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3
Q

The Fed regulates the ____ of _____ and ________ _____.

A

flow of money and interest rates

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4
Q

The primary mortgage market consists of lenders that ________ mortgage loans

A

Originate

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5
Q

In the secondary mortgage market, loans are ______ and ____ after being ______.

A

bought and sold, funded

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6
Q

Fannie Mae has shareholders but is under the conservatorship of the _______ _______ _______ ______ (FHFA)

A

Federal Housing Finance Agency

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7
Q

FHFA creates mortgage-backed securities using pool of mortgages as ____________, ___, and __ loans.

A

conventional, FHA, and VA loans

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8
Q

Freddie Mac has shareholders and is under the conservatorship of ____.

A

FHFA

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9
Q

Freddie Mac has authority to ________ mortgages, ____ them, and use them as ________ for _____.

A

purchase, pool, security for bonds.

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10
Q

Ginnie Mae (Government National Mortgage Association) is entirely a ________ ________, a division of ___.

A

government agency, HUD

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11
Q

GNMA is organized as a ________ but without ________ ________.

A

corporation, corporate stock

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12
Q

GNMA administers ________-________ programs, and guarantees ________-________ securities using ___ and ___ loans as collateral.

A

special-assistance, mortgage-backed, FHA and VA

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13
Q

___________ loans are the most secure loans

A

Conventional

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14
Q

The _____-__-______ (___) is often lowest for conventional loans—traditionally ___%—but the LTV may be as high as ___%.

A

loan-to-value ratio (LTV), 80%, 100%.

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15
Q

Conventional loans meet all the requirements of the secondary market, set by Fannie Mae and Freddie Mac, for ________ loans.

A

conforming

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16
Q

__________ loans (jumbo loans) must be retained in the lender’s investment portfolio.

A

Nonconforming

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17
Q

________ ________ ________ (____) may be required for LTVs higher than 80%,that is, down payments of less than 20%.

A

Private mortgage insurance (PMI)

18
Q

Federal law requires PMI to automatically terminate if the borrower has accumulated ___ ______ in the home (based on ________ ______ or original ________ ______, whichever is less) and is current on ________ ________.

A

22% equity, purchase price, appraised value, mortgage payments.

19
Q

Fannie Mae and Freddie Mac have extended the ________ ________ option to all loans that are in good standing and have had no ________ ________ added to the ________ ______.

A

automatic termination, additional financing, original loan

20
Q

FHA is part of ____

A

HUD

21
Q

FHA does not _____ loans but ______ loans made by an ___-________ lending institution.

A

make, insures, FHA-approved

22
Q

The FHA mortgage insurance premium (MIP) has an __-_____ fee along with ______ installments.

A

up-front, monthly

23
Q

__-________ loans are backed by the U.S. Department of Veterans Affairs and are available to eligible _______ and _______.

A

VA-Guaranteed, veterans and spouses.

24
Q

The Farm Service Agency (FSA), formerly ______ ____ _________ (____), is part of the Department of Agriculture

A

Farmers Home Administration (FmHA)

25
Q

The Farm Service Agency (FSA) has programs to help families purchase or operate ______ _____, including the ______ ______ and _______ _________ Service (RHCDS) and the ______ ______ System.

A

family farms, Rural Housing and Community Development, Farm Credit

26
Q

A _______ loan includes all personal property and appliances as well as real estate.

A

package

27
Q

A _______ loan covers more than one parcel or lot

A

blanket

28
Q

A ______ ______ clause allows a borrower to pay off part of a loan to remove the liens from one parcel or lot at a time.

A

partial release

29
Q

An _____-____ loan secures the ______ loan to the borrower and ______ _________ made by the lender to the borrower.

A

open-end, current, future advances

30
Q

_________ loans are used to finance construction of property improvements.

A

Construction

31
Q

A sale-and-leaseback arrangement can be used to finance _____ ________ or _________ properties.

A

large commercial or industrial

32
Q

A home equity loan (home equity line of credit or HELOC) is ______ to the original lien.

A

junior

33
Q

The _____ __ ________ ___ (____) is implemented by Regulation Z and enforced by the _________ _________ ________ _________.

A

Truth in Lending Act (TILA), Consumer Financial Protection Bureau

34
Q

TILA requires that, when a loan is secured by a residence, the lender must inform the borrower of the _____ _____ of obtaining credit and the borrower has a three-business-day _____ of _________.

A

true cost, right of rescission

35
Q

Pursuant to TILA, ________ is strictly regulated, using ________ terms to mandate what must be disclosed, and there are _____ and ________ penalties for violations.

A

advertising, triggering, civil and criminal

36
Q

The Equal Credit Opportunity Act (ECOA) prohibits discrimination in granting or arranging credit on the basis of ____, _____, ________, ________ ______, ___, _______ ______, ___ (as long as the applicant is not a minor), or receipt of public assistance.

A

race, color, religion, national origin, sex, marital status, age

37
Q

The Fair Credit Reporting Act (FCRA) requires that reasons for a loan application rejection be provided to the applicant within __ ____ and that the applicant be given the right to a free copy of any ______ ______ that was considered in the ____ ___________ process.

A

30 days, credit report, loan application

38
Q

The ________ ____________ ___ (___) requires financial institutions to help meet the need for affordable housing in their communities.

A

Community Reinvestment Act (CRA)

39
Q

The ____ ______ __________ __________ ___ (RESPA) covers costs related to the closing of a residential transaction.

A

Real Estate Settlement Procedures Act (RESPA)

40
Q

_________ ____________ (loan processing) programs provide loan approvals quickly and include Fannie Mae’s _______ ___________ and Freddie Mac’s ____ __________. A ______ _____ may be used as part of a loan application evaluation process.

A

Automated underwriting, Desktop Underwriter,Loan Prospector, credit score

41
Q

What is an example of a buydown arrangement?

A

A builder brings down a purchaser’s interest rate for two years by paying the lender advance interest.

42
Q

The document that sets forth the maximum loan guarantee to which a veteran is entitled is the ___________ of ___________. The veteran must still _______ for the loan.

A

certificate of eligibility, qualify

Real Estate (13 decks)

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