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REMIC > Chapter 1 Key Terms & Definitions > Flashcards

Chapter 1 Key Terms & Definitions Flashcards

1
Q

“B” Type Lending

A

Mortgage lending to borrowers who have impaired credit or some other impairment that prevents them from being able to qualify for traditional lending products

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2
Q

Alternative Mortgage Market

A

A market for borrowers who do not qualify for traditional lending products

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3
Q

AMP Designation

A

The Accredited Mortgage Professional designation awarded by Mortgage Professionals Canada

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4
Q

Bank

A

An institution approved as a Schedule I, II, or III Bank under the Bank Act. Schedule I Banks are Canadian owned, while Schedule II Banks are Canadian subsidiaries of foreign owned banks and Schedule III Banks are foreign owned banks

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5
Q

Bank Act

A

The legislation that governs chartered banks in Canada

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6
Q

Borrower

A

The individual responsible for the receipt and repayment of mortgage proceeds

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7
Q

British North America Act, 1867

A

On March 29, 1867, the British Parliament passed the British North America Act, which established the provisions of the Confederation of the Province of Canada (Ontario and Quebec), New Brunswick and Nova Scotia into a federal state with a parliamentary system patterned on the British model. The act established the division of powers between the central Parliament and the provincial legislatures. The federal government was responsible for, among other things, banking business, criminal law, the post office, the armed forces; the provinces could legislate, among other things, property law, contracts, and local work

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8
Q

Canadian Mortgage Brokers Association (CMBA)

A

An inter-jurisdictional umbrella consisting of provincial mortgage broker associations in Canada

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9
Q

Collateral Mortgage

A

A promissory note secured by a lien on the property for the total amount registered, which may differ from the total amount advanced

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10
Q

Commercial Mortgage

A

A commercial mortgage is similar to a residential mortgage, except the collateral is a commercial building or other business real estate, not residential property

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11
Q

Constitution Act, 1867

A

The Constitution Act, 1867 (formerly called the British North America Act, 1867 and still known informally as the BNA Act), constitutes a major part of Canada’s constitution. The Act entails the original creation of a federal dominion and defines much of the operation of the Government of Canada, including its federal structure, the House of Commons, the Senate, the justice system, and the taxation system. It received its current name in 1982, with the patriation of the constitution (originally enacted by the British Parliament)

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12
Q

Crown

A

The executive branch of government, the Queen acting through Her Agents (the members of the Cabinet)

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13
Q

Demographics

A

Refers to selected population characteristics as used in government, marketing or opinion research

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14
Q

Errors and Omissions Insurance

A

Insurance that provides coverage for errors or omissions made by a brokerage, broker, agent or Administrator. This insurance must contain a provision for fraud.

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15
Q

Expropriate/Expropriation

A

The act of a public authority (such as federal, provincial, or municipal governments or other bodies empowered by statute) taking property without the consent of an owner through a statutory or common law process. In Ontario this right is conferred by the Expropriations Act. This process involves the payment of compensation to the owner by the authority and the owner having the right to claim additional compensation to be determined by the courts or an administrative board. Compensation is intended to make the owner whole, in light of the loss suffered.

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16
Q

Financial Statements

A

Formal records of a business’ financial activities. These statements provide an overview of a business’ profitability and financial condition in both short and long term.

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17
Q

Foreclosure

A

A lender’s remedy that enables the lender to obtain title to the defaulted borrower’s property and dispose of it. Any profit or loss will belong to the lender while the borrower is free of the debt.

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18
Q

FSRA

A

The Financial Services Regulatory Authority of Ontario (formerly the Financial Services Commission of Ontario until June 8, 2019). This is the regulatory body that oversees the mortgage brokerage industry and enforces the Mortgage Brokerages, Lenders and Administrators Act, 2006 (formerly the Mortgage Brokers Act), as well as several other industries and Acts.

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19
Q

Home Inspector

A

A home inspection is a non-invasive examination of the condition of a home, often in connection with the sale of that home. This is carried out by a home inspector, who usually has special equipment and training to carry out such inspections

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20
Q

Income Approach

A

An approach to calculating the value of an income producing property through the use of the net operating income and capitalization rate typical for that type of property and the area in which it is located

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21
Q

Institutional Lender

A

A lender considered to be a Bank, Loan or Trust Company, Credit Union or caisses populaires

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22
Q

Institutional mortgage originator

A

An individual employed by an institutional lender to provide suitable borrowers to that institution for mortgage financing

23
Q

Lawyer

A

A person licensed to practice law

24
Q

Life insurance company

A

A licensed company providing life insurance to policy holders

25
Q

Line of credit

A

An amount of credit made available to a borrower but not necessarily advanced on closing

26
Q

Mortgage

A

The word mortgage is defined as “any charge on any property for securing money or money’s worth.” However, the more common definition of a mortgage states that: a mortgage is defined as a loan secured by real property

27
Q

Mortgage administrator

A

An individual or business that processes mortgage loans on behalf of another party

28
Q

Mortgage backed security

A

An investment in a pool of amortized residential mortgages insured through CHMC under the National Housing Act (NHA)

29
Q

Mortgage agent or broker

A

Individuals who are remunerated for dealing in mortgages or trading in mortgages in Ontario, as employees or otherwise. A mortgage broker may hold the position of principal broker and may supervise licensed mortgage agents. Mortgage agents and brokers must be licensed.

30
Q

Mortgage brokerage community

A

The mortgage brokerage industry as a whole

31
Q

Mortgage Brokerages, Lenders and Administrators Act, 2006

A

The legislation that governs the mortgage brokerage industry in Ontario. The legislation is enforced by FSRA and replaces the previous Mortgage Brokers Act.

32
Q

Mortgage Brokers Act

A

The legislation predating the Mortgage Brokerages, Lenders and Administrators Act, 2006. This legislation governed the mortgage brokerage industry in Ontario until July 1, 2008, and was enforced by FSRA.

33
Q

Mortgage Default Insurer

A

An insurer that provides a policy to the insured lender. The policy will compensate the lender for losses incurred in a mortgage transaction. As of 2011 the insurers that are in Ontario include CMHC, Sagen and Canada Guaranty.

34
Q

Mortgage Investment Corporation

A

A corporation created to invest in mortgages. Investors purchase shares in the corporation and receive income through dividend payments.

35
Q

Mortgage Professionals Canada

A

A national mortgage industry association

36
Q

National Housing Act (NHA)

A

The legislation that created mortgage default insurance in 1954

37
Q

Non-conforming mortgage market

A

Mortgage loans for borrowers who have impaired credit or some other impairment that prevents them from being able to qualify for traditional lending products

38
Q

Premiums (Life Insurance)

A

Payments made in return for a policy

39
Q

Private lender

A

A private lender is typically an individual investor with funds who would like to invest in mortgages. This individual will usually invest through a mortgage brokerage, or his or her lawyer, who may have clients requiring mortgage financing. His or her purpose may vary but normally an investor will invest in 2nd mortgages due to their higher rate of return when compared to 1st mortgages and other potential types of investments such as GICs or bonds.

40
Q

Real Estate and Mortgage Institute of Canada Inc. (REMIC)

A

Founded in 2008 by Joseph White, the Real Estate and Mortgage Institute of Canada is a national educational institution dedicated to providing the financial services industries with exceptional education designed to increase market penetration and the success of its students.

41
Q

Real estate appraiser

A

An individual, usually licensed, who provides a report illustrating several components of a property, including its value, usually in the form of its market value

42
Q

Real estate board

A

A non-profit organization representing local real estate brokers and agents, that provides services to its members

43
Q

Real estate broker

A

According to the Real Estate and Business Brokers Act, 2002, a “Broker” means an individual who has the prescribed qualifications to be registered as a broker under the Act and who is employed by a brokerage to trade in real estate

44
Q

Real estate brokerage

A

According to the Real Estate and Business Brokers Act, 2002, a “Brokerage” means a corporation, partnership, sole proprietor, association or other organization or entity that, on behalf of others and for compensation or reward or the expectation of such, trades in real estate or holds himself, herself, or itself out as such.

45
Q

Real estate lawyer

A

A lawyer specializing in real estate law

46
Q

Real estate salesperson

A

Another term for real estate agent. According to the Real Estate and Business Brokers Act, 2002, an “agent” means an individual who has the prescribed qualifications to be registered as an agent under this Act and who is employed by a brokerage to trade in real estate.

47
Q

Refinance

A

When a borrower already has an existing mortgage, refinancing means to increase the size of that mortgage, or renegotiate it in some fashion

48
Q

Renewal

A

This is an option when a borrower has an existing mortgage. At the end of the term the lender may offer to renew it. This means that the lender is offering to give the borrower new terms and conditions for a new term while not changing the mortgage amount (unlike in a refinance).

49
Q

Residential mortgages

A

Mortgage lending on properties that are zoned residential

50
Q

Securitization

A

The selling of a pool of mortgages to a third party

51
Q

Sub-prime mortgage

A

A mortgage loan for a borrower who has impaired credit of some other impairment that prevents him or her from being able to qualify for traditional lending products

52
Q

Sub-prime mortgage market

A

A market for borrowers who do not qualify for traditional lending products

53
Q

Title insurer

A

A provider of title insurance

54
Q

Title insurance

A

An insurance policy that provides protection against errors in title such as survey errors, zoning infractions and property encroachments. It can also protect the homeowner against fraud.

REMIC (20 decks)

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