Chapter 13 (Types of Mortgages and Sources of Financing / Math) Flashcards
The process of qualifying a borrower and a property in connection with a loan application is known as mortgage __________________ .
underwriting
Life insurance companies are the largest source of funds for __________________ loans.
non-residential
The Federal Reserve System’s least effective tool to affect the money supply is the ability to change the __________________ __________________ .
discount rate
The Federal Reserve System’s most effective tool to affect the money supply is referred to as __________________ __________________ __________________ .
open market operations
The Federal National Mortgage Association
(Fannie Mae) was originally created to buy __________________ loans.
FHA (Federal Housing Administration)
If the Federal Reserve should decide to buy government securities, the money supply would __________________ and interest rates would __________________ .
increase,
decrease
The government-owned organization operating in the secondary mortgage market to make low-yield, high-risk loans marketable is the __________________ __________________ __________________ __________________ nicknamed __________________ __________________ .
Government National Mortgage Association,
Ginnie Mae
A lender that prefers to keep a loan rather than sell it in the secondary market is called a(n) __________________ lender.
portfolio
The secondary mortgage market provides __________________ to the primary mortgage market.
liquidity
A(n) __________________ __________________ __________________ is a loan secured by the equity in a home and generally must be repaid over a fixed loan period. A(n) __________________ is a revolving line of credit obtained against the equity of a home, in which the borrower can draw funds as needed.
home equity loan,
HELOC (home equity line of credit)
The flow of funds into deposits held by primary lenders that increase the mortgage money supply is referred to as __________________ .
intermediation
Mortgage loan originators __________________ loans and mortgage lenders __________________ loans.
arrange,
originate (or make)
The primary mortgage market is where loans are __________________ .
originated
A loan applicant’s past credit history indicates their __________________ to honor debt obligations, and their income is a measure of the __________________ to repay the loan.
willingness,
ability
A Real Estate Investment Trust (REIT) is formed as a(n) __________________ __________________ and operates similarly to a(n) __________________ __________________ .
business trust,
mutual fund
