Chapter 17 - Real Estate Finance Flashcards
A lender is charging 3 points on a $50,000 loan. The borrower must therefore pay the lender an advance amount of
$1,500.
best expresses the mechanics of a mortgage loan transaction?
The borrower gives the lender a note and a mortgage in exchange for loan funds
A lender who charges a rate of interest in excess of legal limits is guilty of
usury.
The key feature of an adjustable mortgage loan is that
the interest rate may vary
The three overriding considerations of a lender’s mortgage loan decision are
the ability to re-pay, the value of the collateral, and the profitability of the loan
In a deed of trust transaction
The trustor conveys title to a trustee in exchange for loan funds from the beneficiary.
The major players in the secondary mortgage market are
Fannie Mae, Freddie Mac, and Ginnie Mae.
A principal role of FNMA is to
purchase FHA-backed and VA-backed loans
In addition to income, credit, and employment data, a mortgage lender requires additional documentation, usually including
an appraisal report.
