Chapter 3 vocab Flashcards

(26 cards)

1
Q

Commercial Bank

A

Specialize in short term, larger non-residential lending

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2
Q

Credit Unions

A

Owned by their depositors and are involved to a lesser degree in the mortgage lending

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3
Q

Disintermediation

A

Savings institutions loose money to higher paying investments

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4
Q

FDIC

A

Federal Deposit Insurance corp. provides insurance for depositors.
provides security in the banking system as well as security for depositors

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5
Q

Federally Related Transaction

A

Any transaction that involves an institution that is federally regulated

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6
Q

FIRREA

A

Financial Institutions Reform, Recovery, Enforcement Act

  • applies to federally related loan transactions.
  • protects federal deposit insurance funds from bank failure
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7
Q

Hard Money Loan

A

the borrower receives cash secured by real property.

typically issued by private investors or companies.

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8
Q

Money Market Funds

A

Non insured Private market investment fund

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9
Q

Mortgage Banker

A

Lend their own money

may originate service and sell the loans

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10
Q

Mortgage Broker

A

Financial go between and shops for the lions rather then lend their own money.

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11
Q

Mortgage Warehousing

A

line of credit used by mortgage bankers .
-short term revolving line of credit extended by a financial institution
-

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12
Q

Nationwide Mortgage Licensing System and Registry

A

NMLS
-Unique identifier number, must be obtained by anyone who touches the loan.
-

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13
Q

Office of thrift supervision

A

OTS

-Crested to regulate the S&L

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14
Q

Participation Loan

A

Loan that is made in exchange for a portion of the borrowers equity in the secured property.
-AKA shared appreciation mortgage

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15
Q

Pension Funds

A

Fund set up by an entity to pay pension benefits to retired workers.
Invest billions in the stocks, bonds, and real estate.
-major force in regulating the supply and demand of markets.

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16
Q

Piggy back loan

A

single loan divided into parts of varying degree of risk which may be sold to multiple lenders.

17
Q

Portfolio loan

A

held by the lender as an investment

18
Q

Primary Market

A

Loans made directly to the borrowers

19
Q

Real Estate Investment Trust

A

REIT’s

  • sells shares of stock in a corporation that owns and operates income-producing real estate.
  • Avoid Corp double taxation because they must pay out 90%of their total revenue to investors annually.
20
Q

Real Estate Investment Trust Act

A

Congress made it possible for investors to enjoy the flow through tax advantages of a partnership

21
Q

Resolution trust corporation

A

Formed to liquidate assets of Fraud and failed S&L’s

22
Q

Savings Associations Insurance Fund

A

SAIF

-Replaced the old FSLIC insuring banks

23
Q

Seasoned Loan

A

one that has been held for a sufficient time that the borrower is making payments.-usually 6-12 months

24
Q

Secondary Market

A
  • sale of existing loans many of which will be seasoned.

- Largely made up by Freddie Mac and Fannie Mae

25
Second Mortgage
- junior trust or deed | - often a source of funds when a lender will not loan the full amount
26
Soft Money Loan
-Cash does not exchange hands because the seller finances the buyer for some of the equity being transferred.