Chapter 7 & 8 Flashcards
Renegotiable Rate Mortgage (RRM)
Amortized over 30 years, BUT must be RENEWED 3,4,5 year intervals/Lender can increase interest rate each renewal/ but no more than 1/2 of 1% for each year of the initial term.
DE
Direct endorsement program = Approved Lender of FHA insured loan to underwrite directly for FHA .
Shotgunning fraud
multiple loans for the same property, in excess of the actual value of the property.
Individual in cooperation
cooperative purchaser /receive DEED for a proportionate undivided interest and has a right to occupy the a particular unit.
Recognition clause
recognize the right of each individual parcel owner by the lender in the BLANKET mortgage. even if the developer defaults or in case of foreclosure
compound interest
interest computed on the principal + accrued interest.
Interest Rate Cap
LIMIT to the amount of interest the borrower can be charged
Regulatory capital requirements
Retain certain percentage of the capital for covering the existence of loan obligations.
Open-end Loan
Expandable Loan/ Mortgage or deed of trust for future advance/ Does not have a definite end date / lender give the limit up to which they may borrow.
TDHCA
texas department of housing and community affairs/ Eligible first time home buyer > mortgage loan funds and downpayment assistance
Gap commitment
A Garantee for the developer to have access/ differences for the Floor plan and upper level of the permanent loan if the developer does not reach the rental goals.
Release Clause
in Blanket mortgage /each lot as it is sold .
Installment sales Method
Allow seller to get partial payments which allow him to defer some taxes
Income Ratio
Housing Expense Ratio
predatory lending
aggressive loan term/ ignore the lender’s ability to pay the loan / benefit the lender not the borrower
LLC advantage
Give the tax advantage of the partnership & limited liability of the corporation.
Working the Gap
Technique/ involve excessive lien stacking excessive knowingly on a property with a very narrow time frame.
Growing equity mortgage
Fixed-rate mortgage / increase for a fixed amount over a given schedule period of time. /entire term of the loan
Aggregate Cap / overall Cap
A limit on amount of interest can increase over the life of the loan
Construction loan OR INTERIM financing
Open-End mortgage , cost of labor and material with just the LAND not structures.
Subprime Lending
Make loan for people who may have difficulty to qualify for traditional loan
Second Chance lending, Near prime, or non-prime lending
