CFPB Flashcards
What does the CFPB stand for?
The Consumer Financial Protections Bureau.
What caused the Mortgage Meltdown, or the crisis, and who’s fault was it?
- No-doc mortgage products.
- Unethical appraisers/unethical mortgage loan originators
- Relaxed underwriting standards
- Investors paid high priced incentives for subprime loans, leading to higher risk loans offered to borrowers.
What is the purpose of the CFPB?
To promote financial stability through accountability and transparency.
The CFPB was created by which Acts?
The Dodd-Frank Act and the Consumer Finance Protection Act.
Which agencies report to the CFPB, and which don’t?
- ) Any agency that deals with banking and/or money will report to the CFPB.
- ) Agencies that do not deal with money and/or banking are not under the CFPB; for ex. the Fair Housing Act.
What is a Mortgage?
Written instruments using real property to secure repayment of a debt.
What is the Primary Market?
Borrowers and lenders come together to negotiate terms for mortgages. (Where “we” as consumers obtain mortgages.)
Who is the Mortgage Banker (Primary Mort. Market)?
Company, individual or entity that originates processes, underwrites, closes/funds, and services mortgage loans. (They have the money.)
Who is the Mortgage Broker? (Primary Mort. Market)
A company or individual who, for a fee, places loans with lenders, but does not service such loans. (They do not have any money to lend.)
Who are the lenders in the Primary Mort. Market?
- Mortgage Banker
- Mortgage Broker
- Commercial Banks
- Savings & Loan Associations.
- Credit Unions
- Finance Companies
- Mutual Savings Banks
What is the Secondary Market?
This market is where existing mortgage loans are bought and sold to other lenders.
Who are the Secondary Market players?
- Fanne Mae
- Freddie Mac
- Ginnie Mae
- The Federal Home Loan Banking System
- Private Investors
What is Fannie Mae?
- Federal National Mortgage Association, also known as FNMA.
- Is a gov.-sponsored enterprise (GSE).
- The largest investor in residential mort. on the Sec. Market.
- It purchases FHA, VA, and conv. loans from commercial banks.
What is Freddie Mac?
-Federal Home Loan Mortgage Corporation, also known as FHLMC.
-Second major GSE.
Chartered by the fed. gov. to buy mortgages originated by Savings and Loan Associations.
What is Ginnie Mae?
- Government National Mortgage Association, also known as GNMA.
- Not a GSE.
- Wholly owned gov. corporation within HUD.
- Does NOT buy or sell loans, it issues guarantess on gov. backed loans.
- Ginnie Mae is now a part of HUD.
