CH 3: LOAN FUND SOURCES FOR THE PRIMARY MARKET

Question 1

Private, noninsured investment accounts are called:

Answer 1

Money Market Funds

Question 2

A loan held by a lender rather than sold into the secondary market is referred to as a:

Answer 2

Portfolio Loan

Question 3

FIRREA

Answer 3

Protects federal deposit funds
Applies to all federally relates transactions
Sets procedures for loans in federally related transactions

Question 4

Mortgage BANKERS/Mortgage companies:

Answer 4

Originate, service, and sell loans

Question 5

A loan where the lender assumes a percentage of ownership is called:

Answer 5

A participation loan

Question 6

Credit Unions were first set up in:

Answer 6

1970

Question 7

Banks who supply capital for business ventures and construction activities on a short-term basis are called:

Answer 7

Commercial banks

Question 8

Indirect lenders include:

Answer 8

Pension funds

Life insurance companies

Question 9

A loan can often be “seasoned” in:

Answer 9

6-12 months

Question 10

The primary market (direct lenders) consist of

Answer 10

Mortgage companies
Savings banks
Local banks

Question 11

What percentage of its net income must REIT distribute to its investors/shareholders annually?

Answer 11

90%

Question 12

The collection of principal and interest payments by one lender on behalf of another is called:

Answer 12

Loan servicing

Question 13

A federally related transaction is:

Answer 13

Any transaction that involves the federal government

Question 14

A mortgage broker

Answer 14

Acts as a loan coordinator

Question 15

The deposit insurance fund for banks is managed by:

Answer 15

FDIC

Question 16

Money market funds are:

Answer 16

Not insured