Chapter 3 vocab Flashcards
(26 cards)
Commercial Bank
Specialize in short term, larger non-residential lending
Credit Unions
Owned by their depositors and are involved to a lesser degree in the mortgage lending
Disintermediation
Savings institutions loose money to higher paying investments
FDIC
Federal Deposit Insurance corp. provides insurance for depositors.
provides security in the banking system as well as security for depositors
Federally Related Transaction
Any transaction that involves an institution that is federally regulated
FIRREA
Financial Institutions Reform, Recovery, Enforcement Act
- applies to federally related loan transactions.
- protects federal deposit insurance funds from bank failure
Hard Money Loan
the borrower receives cash secured by real property.
typically issued by private investors or companies.
Money Market Funds
Non insured Private market investment fund
Mortgage Banker
Lend their own money
may originate service and sell the loans
Mortgage Broker
Financial go between and shops for the lions rather then lend their own money.
Mortgage Warehousing
line of credit used by mortgage bankers .
-short term revolving line of credit extended by a financial institution
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Nationwide Mortgage Licensing System and Registry
NMLS
-Unique identifier number, must be obtained by anyone who touches the loan.
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Office of thrift supervision
OTS
-Crested to regulate the S&L
Participation Loan
Loan that is made in exchange for a portion of the borrowers equity in the secured property.
-AKA shared appreciation mortgage
Pension Funds
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.
Piggy back loan
single loan divided into parts of varying degree of risk which may be sold to multiple lenders.
Portfolio loan
held by the lender as an investment
Primary Market
Loans made directly to the borrowers
Real Estate Investment Trust
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.
Real Estate Investment Trust Act
Congress made it possible for investors to enjoy the flow through tax advantages of a partnership
Resolution trust corporation
Formed to liquidate assets of Fraud and failed S&L’s
Savings Associations Insurance Fund
SAIF
-Replaced the old FSLIC insuring banks
Seasoned Loan
one that has been held for a sufficient time that the borrower is making payments.-usually 6-12 months
Secondary Market
- sale of existing loans many of which will be seasoned.
- Largely made up by Freddie Mac and Fannie Mae