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Texas Real Estate Exam > Real Estate Finance 1 > Flashcards

Real Estate Finance 1 Flashcards

(92 cards)

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1
Q

Sending monthly payment statements and collecting monthly payments, maintaining payment records and following up on delinquencies.

A

Servicing

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2
Q

The process of creating a new mortgage loan.

A

Origination

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3
Q

The process of collecting information about a borrower in order to build a loan file that will be used to make an underwriting decision.

A

Loan processing

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4
Q

The process of transferring funds to a title or escrow company for disbursement.

A

Funding

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5
Q

The process of evaluating a borrower’s loan application to determine the risk involved for the lender

A

Underwriting

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6
Q

Congress created the Federal Housing Administration in…

A

1934

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7
Q

____ are usually small lenders who have the necessary funds to extend loans at their own risk.

A

Correspondent lenders

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8
Q

Credit reports are ordered from all three major national credit reporting agencies: Experian, Equifax and _____.

A

TransUnion

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9
Q

Net basis rates are sometimes identified as the _____, and do not include servicing fees.

A

Wholesale rate

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10
Q

The monetary policies of the ____ affect interest rates and the availability of funds.

A

Federal Reserve

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11
Q

Relates to federal government spending…

A

Fiscal policy

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12
Q

Insures deposits in banks and thrift institution…

A

Federal Deposit Insurance Corporation

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13
Q

Set by the board of directors of the Federal Reserve Banks, subject to approval by the Board of Governors..

A

Discount Rate

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14
Q

Policy that deals with interest rates and the supply of money in the US economy.

A

Monetary policy

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15
Q

Buying or selling government securities by the Federal Reserve

A

Open-market operations

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16
Q

____ is defined as the sum of currency held by the public and transaction deposits at depository institutions.

A

M1

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17
Q

At the treasury level, funds can be raised to pay for government spending by increasing borrowing and ____.

A

Raising taxes

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18
Q

The ____ is the central banking system of the United States.

A

The Federal Reserve

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19
Q

The Fed uses three primary monetary policy tools to influence the cost and availability of credit, open-market operations, the discount rate and ____.

A

Reserve requirements

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20
Q

The ____ charters, regulates and supervises all national banks and federal savings associations.

A

OCC

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21
Q

The ____ was created by Congress in 1792 and became part of the Department of the Treasury in 1873.

A

United States Mint

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22
Q

The FDIC insurance limit for deposits is…

A

$250,000

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23
Q

There are____ Federal Home Loan Banks in the United States.

A

Twelve

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24
Q

Responsible for the chartering, regulation and supervision of Texas’ thrift industry.

A

SML

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25
The industry term for residential loan originators, as mandated by the SAFE Act.
RMLO
26
Designed to enhance consumer protection and reduce fraud.
SAFE Act
27
The practice of refusing to provide financing in a particular area because of location.
Redlining
28
Responsible for the regulation of the Texas manufactured housing industry
TDHCA
29
The Dodd-Frank Wall Street Reform and Consumer Protection Act, signed into law in 2010, established the ____.
Consumer Financial Protection Bureau
30
Real estate transactions regulated by the Office of Consumer Credit Commissioner include...
- Home equity loans - Home improvement loans - Secondary mortgages
31
The Community Reinvestment Act, enacted in ____, ensures that banks serve the needs of the community in which they were chartered.
1977
32
The Real Estate Settlement Procedures Act is implemented by ____.
Regulation X
33
Which of the following transactions is exempt from RESPA?
Temporary loans
34
Under the ____, the use of certain terms in an advertisement trigger the need for full disclosure of lending terms.
Truth in Lending Act
35
The Texas Veterans Land Board Land Loan Program requires a minimum down payment of...
5%
36
The Farm Service Agency, a sub agency of the ____, makes various loans available to those unable to obtain mortgage credit from other, more conventional sources.
U.S. Department of Agriculture
37
Income eligibility for the ____ is capped at 115% of the median income of the area in which the property is located.
USDA Rural Housing Program
38
Periodic payment amounts such as principal & interst, and ____ must be disclosed in the Projected Payments section of the Loan Estimate form.
Mortgage insurance
39
The Services You Can Shop For section of the Loan Estimate form includes items such as ____.
Survey fee
40
According to the Closing Disclosure, prep AIDS are items to be paid by the consumer in advance of the first scheduled payment of the loan, and include homeowner's insurance premiums, mortgage insurance premiums, prepaid interest, property taxes, and a maximum of ____ additional items.
3
41
Holds mortgages in trust for the benefit of investors
REMIC
42
Return on an investment
Yield
43
Encompasses the purchase and sale of existing mortgages to investors
Secondary mortgage market
44
The act of moving funds from one investment arena to another
Disintermediation
45
Uses forms created and issued in an effort to standardize mortgage loan purchases
conforming loan
46
Established in 1968, ____ operates a mortgage-backed securities program designed to facilitate the flow of capital into the housing industry.
Ginnie Mae
47
The Housing and Economic Recovery Act was enacted in ____, and created the Federal Housing Finance Agency (FHFA).
2008
48
The secondary mortgage market was designed to provide greater liquidity to the residential real estate market, primarily by ____.
The sale of mortgage loans as investments.
49
A ____ lender is one who funds mortgage loans from deposits on hand, retaining the loans long term.
Portfolio
50
The two major purchasers of mortgages in the secondary market are:
Fannie Mae and Freddie Mac
51
In 2008, Fannie Mae and Freddie Mac were placed into ____ by the Federal Housing Finance Agency.
Conservatorship
52
What housing objectives does Fannie Mae address?
- Regional imbalances of available mortgage credit - The origination of mortgages for sale - The standardization of mortgage loans
53
The Agricultural Credit Act, which established Farmer Mac to facilitate the creation of a secondary market for agricultural mortgage products, was passed in ____ by Congress.
1987
54
Investment vehicle created by Congress in 1960
REIT
55
An instrument of corporate or governmental debt
Bonds
56
Member-owned depository institutions
Credit union
57
Someone who processes, underwrites, closes and funds their own files in their name and then sells the loans to other mortgage lenders
Correspondent lender
58
Typically specialize as middlemen between borrowers and lenders
Mortgage brokers
59
The ____ is where borrowers and mortgage lenders come together to create and negotiate the terms of a mortgage transaction
Primary market
60
A(n) ____ is a person, corporation or firm not otherwise in banking that provides its own funds for mortgage financing purposes
Mortgage banker
61
Mortgage brokers, at one time, originated up to ____ of all mortgage loans.
80%
62
Bonds may be categorized by ____.
- Method of repayment - Method of redemption - Intended use of funds
63
Many depository institutions participate in the primary mortgage market, including commercial banks, insurance companies and ____.
credit unions
64
The money that mortgage companies use to make loans comes from the sale of ____.
bonds
65
Typical sources of income for Real Estate Mortgage Trusts (REMTs) are:
Origination fees Interest Profits from sale/purchase of mortgages
66
Prior to 1980, savings accounts held by lenders accounted for over of residential lending in America.
75%
67
Like banks and credit unions, ensign funds are fed by ____.
Client deposits
68
Lien Theory State
State where mortgage lender has a lien on the property and the borrower has title.
69
Hypothecation
Pledging real property as a security for a debt.
70
PMI
Private Mortgage Insurance Private equivalent of FHA insurance Allows for high LTV and low down payment conventional loans Insures the lenders risk
71
Beneficiary
Lender under a deed of trust
72
CRV
VA appraisal Certificate of Reasonable Value
73
Budget Loan
loan where monthly payment includes not only principle and interest but also taxes and insurance called the PITI payment
74
Package Loan
loan secured by real property plus personal property
75
Release Clause
clause found in blanket loan allows sorry to obtain partial releases of specific lots by making required lump sum payments
76
Fixed Rate Amortized Loan
loan with equal regular payments of principal and interest until the debt is fully repaid or amortized
77
Fair Credit Reporting Act
FCRA law allowing individuals to inspect credit files, correct errors and attach explanatory statements
78
Acceleration Clause
clause in mortgage allowing lender to declare whole amount of principal due and payable in event of default by borrower
79
APR
Annual percentage rate number that tells a borrower total cost of loan
80
PITI
principal, interest, tax, insurance common payment for amortized loans
81
Community Reinvestment Act
law requiring lenders to meet the needs of the community in which they are chartered to do business
82
Secondary Market
Where lenders go to borrow money Fannie Mae, Ginnie Mae, Freddie Mac
83
VA
Veteran's Administration assists vets in the purchase of housing by guaranteeing loans
84
DD 214
Veteran's discharge papers provided to demonstrate eligibility for a VA loan
85
Down payment Assistance Programs
Government and private programs whose stated purpose is to help buyers become homeowners
86
TRID
Truth in Lending Act RESPA Integrated Disclosures
87
Point
One percent of the loan
88
Redlining
Refusal to lend in a particular area prohibited by the Community Reinvestment Act
89
Discount Point
One percent of the loan that is prepaid interest, tax deductible and results in increased yield for the lender
90
Construction Loan
Short term financing with funds advanced periodically during the stages of construction a term loan
91
Subordination Clause
clause allowing a lender to move to or take a lower lien position
92
Equity
market value of a property less outstanding debt

Texas Real Estate Exam (19 decks)

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