Chapter 2 Vocab Flashcards
(24 cards)
Balance
economic principal stating that max value is achieved when four agents of production are in balance
- land
- labor
- capital
- coordination
Bond type securities
Debt instruments issued by the secondary market backed by mortgages
Buyers Market
a market in which there are more sellers than buyers
Conservatorship
A conservatorship occurs when a person or organization is authorized to care for the finances, health and assets of another person who is deemed partially or completely unable to take care of such needs
Deficit Spending
Forces the government to borrow money making money less available for construction and home loans
Demand
economic principal that states the quantity desired for a good is dependent on the price level
Demographics
study of economic trends in a geographic area
Disintermediation
process where savings institutes loose money to higher paying investments.
Emergency home finance act 1970
created the Federal Home Loan Mortgage Corp
AKA “Freddie Mac”
FHLMC
Freddi Mac
FNMA
Fannie Mae
Major player in secondary market
GNMA
Ginnie MaeMajor player in secondary market
Immediate Delivery
Seller has 60 days to deliver the mortgages FHLMC has agreed to purchase
Impact Fees
Charged to all new housing that is built within the community and are levied to pay for community infrastructure
Limited appraisal
In a limited appraisal,one or more of the approaches might have been omitted.
Pass Through Security
Pay interest and principal monthly
Predatory Loan Practices
include usury, deception, and fraud and refer to a variety of abusive lending practices.
Primary Market
Local lending institutions
Real Estate Cycle
Peak
Recession
Bottom
Recovery
Secondary Market
Private, Quasi public, and government agencies that buy and sell existing mortgages from primary lenders
Sellers Market
High demand for housing with low supply being offered
Subprime Mortgages
mortgage given to a personal with bad credit ratings
supply
the amount of goods that is in service
underwriting criteria
evaluating the borrowers willingness and ability to pay, along with the collateral offered as a security
