CHP 16 - Real Estate Finance II

Question 1

Redlining

Answer 1

Lender requires higher down payment based on neighborhood of home

Question 2

Loan Flipping

Answer 2

Refinancing charging borrowers points and fees

Question 3

3 Types of Mortgage Backed Securities

Answer 3

1. Straight pass-through
2. Modified Pass through
3. Fully modified pass thru

Question 4

Regulation Z

Answer 4

truth in lending

Question 5

Subprime Loan

Answer 5

High interest and fees - for those who can’t qualify for conventional

Question 6

Ginnie Mae I MBS

Answer 6

Single family pools, most traded product

pymnts made on 15th

Minimum pool size $1 million

Question 7

Ginnie Mae II MBS

Answer 7

Modified pass through MBS - minimum pool $1 million for SF

$350K for manufactured homes

$500K for all other pool types

Question 8

Fannie Mae Guidelines

Answer 8

1. Loan Limits
2. Debt-to-Income Ratio less than 28%
3. Any LTV more than 80% must have PMI
4. 20% down payment

Question 9

Max conforming mortgage limit for SF as of 2018

Answer 9

$453,100

Question 10

Max Conforming Loan amt for 2 unit as of 2018

Answer 10

$580,150

Question 11

Max Conforming Limit 3 Unit

Answer 11

$701,250

Question 12

Fannie Mae Loan Limit 4 Family

Answer 12

$801,950

Question 13

A loan exceeding the conforming loan limits

Answer 13

Jumbo Loan

Question 14

Fannie Mae

Answer 14

Shareholder-owned Increase flow of mortgage money by creating secondary mkt

Question 15

Purpose of Freddie mac

Answer 15

1971 - MBS for conventional loans

Question 16

Mission of Freddie Mac

Answer 16

Provide stability, affordability and opportunity for minorities

Question 17

Basic Purpose of Truth In Lending - implemented by Regulation Z

Answer 17

Give buyers info about true cost of obtaining credit

Question 18

Right to Rescind

Answer 18

Borrower has right to cancel within 3 days - does not apply to residential first mortgageloans

Question 19

Home price $150K
Down pymnt $15K
Loan for balance

What is the LTV (loan to value) ratio

Answer 19

90%

Question 20

Loan Flipping

Answer 20

Encouraging borrower to refinance so lender can charge high points and fees on new loan

Question 21

Minimum Down Payment required for conventional as o 2018

Answer 21

3%

Question 22

Which loans require PMI at certain higher LTV amounts

Answer 22

Conforming Residential Loans