Ch 12 CA RE Practice

Question 1

What is a nickname for Government National Mortgage Association (GNMA), a U.S. government agency that purchases FHA and VA mortgages?

Answer 1

Ginnie Mae

Question 2

What’s the only agency owned by govt?

Answer 2

Ginnie Mae

Question 3

In what market do the lenders make

mortgage loans to individual borrowers?

Answer 3

Primary mortgage market

Question 4

What market in which the lenders sell mortgages?

Answer 4

Secondary mortgage market

Question 5

Who operates in the secondary mortgage market?

Answer 5

Fannie Mae, Freddie Mac, Ginnie Mae, Insurance companies, investers, pension funds, hedge funds

Question 6

What mortgage guaranty insurance available to conventional lenders on the first, high risk portion of a loan?

Answer 6

(PMI) Private mortgage insurance

Question 7

Most loans have loan to value (LTV) of what percentage?

Answer 7

80%

Question 8

FHA loans with a high LTV are required to pay what?

Answer 8

MORTGAGE INSURANCE PREMIUM (MIP)

Question 9

What does PITI stand for?

Answer 9

principle, interest, taxes, and insurance

Question 10

The amount of money the borrower or seller must pay the lender to get a mortgage at a stated interest rate is known as…?
A Loan origination fees
B Closing costs
C Discount points
D Reduction costs

Answer 10

Discount points

Question 11

The Federal Reserve can do which of the following…?
A Buy securities
B Change the discount rate
C Create higher reserve requirements
D All of the above

Answer 11

All of the above

Question 12

A mortgage loan which bears interest at a rate subject to change during the term of the loan, predetermined or otherwise, is referred to as a/an…?
AReverse annuity mortgage
BAdjustable rate mortgage
CStraight mortgage
DUnconventional mortgage

Answer 12

B Adjustable rate mortgage

Question 13

Which of the following is an example of a non-institutional lender…?
AREIT
BCredit unions
CPension funds
DAll of the above

Answer 13

D All of the above

Question 14

Mortgage guaranty insurance available to conventional lenders on the first, high risk portion of a loan is referred to as…?
APrivate mortgage insurance
BPremium mortgage insurance
CHomeowners insurance
DHigh risk mortgage insurance

Answer 14

A Private mortgage insurance

Question 15

Which of the following is an acronym that describes the components of a typical monthly mortgage payment…?
A PETE
B CADDL
C OLD CAR
D PITI

Answer 15

D PITI