Chapter 4

Question 1

MBS ( mortgage back securities)

Answer 1

common way of shifting funds is through the use of mortgage-backed securities (MBS), which are backed by a pool of mortgages.

Question 2

secondary mortgage market

Answer 2

warehouse agencies that purchase a number of mortgage loans and assemble them into one or more packages of loans for resale to investors.

Question 3

GNMA

Answer 3

Government national mortgage association

Question 4

FNMA

Answer 4

federal national mortgage association
Former government agency => private corporation 1968

Question 5

FHLMC

Answer 5

Federal home loan mortgage corporation
Quasi-government agency

Question 6

GSE

Answer 6

Government sponsored enterprise
They purchase loan or guarantee mortgage-backed securities. ( GNMA,FNMA,FHLMC)

Question 7

2 types of GNMA

Answer 7

1. Ginnie Mae I MBS are based on single-family pools and are Ginnie Mae’s most heavily-traded MBS product.
2. Ginnie Mae II MBS are modified pass-through mortgage-backed securities.

Question 8

GNMA rules

Answer 8

1. Does NOT purchase mortgages.
2. IT guaranteed monthly payment will be made every month.
3. it developed in 1970s first mortgage back securities, pool of FHA & VA .

Question 9

FNME rules

Answer 9

Pools loan that conform to their standards, convert them to the single class mortgage back security “ FANNIE MEA MBS”.

Question 10

FNME system

Answer 10

DO desktop originator
DU desktop underwriter

Question 11

FNME products

Answer 11

1. NO or LOW downpayment
2. fixed rate
3. adjustable rate
4. home construction or renovation