Chapter 12 Flashcards
Who originates a loan?
Mortgage banker
Is a mortgage banker registered or licensed by NYS banking department ?
Licensed
Is a mortgage broker registered or licensed by NYS banking department ?
Registered
Who is registered by NYS BAnking department?
Mortgage broker
Who is licensed by New York State banking department?
Mortgage banker
Who brings borrowers and lenders together for free?
Mortgage brokers
What do mortgage brokers do?
Being borrowers and lenders together for a fee
Refers to a pending loan in which a mortgage broker believes that, based on preliminary interview and a credit report, the borrowers will PROBABLY be able to meet loan requirements of lender
Pre qualification lender
What is a pre qualification letter?
Mortgage broker believes that based on a preliminary interview and credit report, borrowers will probably be able to meet a lenders loan requirements
What is a Pre approval letter ?
Documents are on file and there is a strong probability that there are no credit or income versus stopping a loan from closing
What is the difference between a preapproval letter and a prequalification letter?
Pre approval says there is a STRONG PROBABILITY that there’s no issue stopping a loan from closing
Prequalification says there is a PRELIMINARY interview and loan will PROBABLY be able to meet loan requirement
Which is better: pre qualification letter or pre approval letter
Pre approval letter is better
What is underwriting?
Lender evaluates a prospective borrowers location through verification of employment, financial information, analysis of credit, and appraisal reports
What are the four evaluations in underwriting?
- verification of employment
- financial information
- analysis of credit
- appraisal reports
Who evaluates what in underwriting?
The lender evaluates a prospective borrowers application
Who issues a mortgage commitment ?
An underwriter ( underwriting)
Lender issuing a loan commitment letter to the borrower to demonstrate willingness to fund the loan is known as what letter?
Mortgage commitment
What is a mortgage commitment letter?
Lender issuing a loan commitment letter to the borrower
What step is after a mortgage commitment?
A closing
What comes after a pre qualification or pre approval letter?
You can start showing buyers around for properties and then the underwriter comes in once you have a meeting of the minds
The ability to place, negotiate, solicit, and process residential or commercial mortgage loans describes
A. A mortgage banker
B. A mortgage broker
C. Residential sharing agent
D. Residential vendor information agent 
A mortgage broker
Unlike a mortgage broker, a mortgage banker
A. Originate loans
B. Negotiates loans
C. Guarantees loans
D. Insures loans 
Originates loans
Lenders willingness to fund a loan is known as
A. Preapproval
B. Promise to close
C. A loan guarantee
D. A mortgage commitment 
A mortgage commitment
Which is a qualification for mortgage banker licensing?
A. Five years of residency in New York
B. Five years experience as a real estate sales person
C.  net worth of no less than $250,000
C, net worth no less than $250,000
How many years of previous tax returns do lenders require of loan applicants when underwriting loans?
A. 1
B. 2
C. 3
D. 4
2
A mortgage broker determines a prospective borrowers credit worthiness and ability to repay a loan in a process called
Pre approval
When a mortgage broker is also a real estate licensee, the potential for what exists?
Dual agency
If you find yourself in a dual agency as both a mortgage broker and a real estate licensee then what should you present the buyer with?
Mortgage broker dual agency disclosure form
Do you mortgage bankers or mortgage brokers utilize their own funds?
Mortgage BANKERS
Who utilizes their own funds, generally comprised of borrowed funds, two originate loans?
Bankers
How do you qualify as a mortgage banker (2)? 
A net worth no less than $250,000
An open line of credit of no less than $1 million provided by an insurance company or institutional bank
What are these two qualifications for?
A net worth no less than $250,000
An open line of credit of no less than $1 million provided by an insurance company or institutional bank
To be a mortgage banker
What are the two categories of loan financing?
Debt financing
Equity financing
Which of the two loan financing categories is most common for borrowed funds?
Debt financing
What? + the borrowers down payment (initial investment) = The purchase price required by the sale
The debt placed on the property
Debt on property + borrowers down payment = ?
The purchase price required by the sale
Borrowed funds in debt financing = ?
Loan amount
Borrower funds in debt financing = ?
down payment
In equity financing (mezzanine financing), When borrowing occurs on real property, the lender will originate the loan amount as either blank or blank?
Either the purchase price or the appraised value, WHICHEVER IS LESS
What is the purpose and role of the mortgage broker and a real estate transaction?
To obtain a mortgage commitment
What is a mortgage commitment?
I lender issues a loan commitment letter to the borrower to demonstrate willingness to fund the loan
 Who assists the borrower and accumulating the necessary paperwork for the lender to underwrite alone?
A mortgage broker
What is underwriting?
The evaluation process of verifying all borrower information necessary for the lender to issue a mortgage commitment
How many years of previous tax returns does a lender require for paperwork to underwrite a loan?
2 years
If I am a lender doing paperwork to underwrite a loan and I already included two years of previous tax returns or entity borrowing the money, then what else do I need?
A personal financial statement indicating the borrowers net worth, listing assets, and liabilities
In order for the borrower to certify the rent/income to a property, the lender may require what certificate from the tenant?
Estoppel certificate
Is a mortgage banker a mortgage broker REGULATED by the NYS banking department? 
In reality, it would be both
