Class 13 Flashcards
A loan guaranteed by the government
VA loan
A fee paid by veterans for the VA loan
Funding fee
An organization that buys rural property
Farmer mac
Private mortgage insurance
PMI
An organization that buys and sells mortgages
Fannie may
A trigger item in an advertisement
down payment
Also known as Regulation Z
Truth in lending
A morgage that includes real property and personal property
Package mortgage
Annual percentage Rate
APR
The practice of refusing to make loans in certain areas
redlining
What organization would be involved in the government backing of securities sold to investors
Ginnie Mae
A non-conforming loan can be best described as a loan that….
does not meet the qualifications of the secondary market
A young married couple applied for an FHA loan at the local lending institution and discovered that FHA loans….
require the property to be owner-occupied
What type of mortgage would be involved if a lender required more than one tract of land to be covered under one security agreement
A blanket mortgage
The party who is most likely to benefit from the FHA loan is the
Lender
**FHA loans protects lenders
A loan commitment specified that a lender would make a $120,000 loan which includes the purchase of all appliances for use in the home. What type of mortgage will the lender require to finance the real and personal property?
A package mortgage
What type of loan would require the purchase of PMI insurance
conventional loan
Benefits that may accrue to a seller under a sale-leaseback agreement would include
Raising equity capital
Deductibility of rent
Deductibility of real estate taxes
A borrower who is refinancing his home has been told by the lender that he has 3 business days to change his mind about the loan once the lender has made the loan commitment. What law regulates this right of rescission?
Regulation Z - Truth in Lending
An all inclusive mortgage that is written as a junior loan which as one payment that covers two loans would be an example of what type of mortgage
A wrap around mortgage
What veterans do NOT have to pay the funding fee for a VA loan?
Veterans with service connected disability do not have to pay the funding fee
What in an advertisement for the sale of a single family home would be a “trigger term” that would require full disclosure under the Truth-in-Lending act?
Down payment
The buyers purchased a residence of $395,000, made a downpayment of $70,000 and obtained a loan for the balance. The loan is a….
purchase money mortgage
What are the three participants in the secondary mortgage market?
Fannie Mae
Freddie Mac
Ginnie Mae
One of the federal laws requiring disclosure to a loan applicant who is rejected for a loan on the basis of a credit report is…
The fair credit reporting act
The conservatorship of Fannie Mae and Freddie Mac is the responsibility of…
the Federal Housing Finance Agency
A developer receives a loan that covers five parcels of real esate and provides for the release of the mortgage lien on each parcel when certain payments are made on the loan. This type of loan arrangement is called…
the blanket loan
Funds for FHA-insured loans are usually provided by….
approved lenders
**FHA loans are not made by FHA, they are INSURED by FHA
What does Regulation Z require to be disclosed
discount points
loan origination fee
interest rate
what is the positio of home equity line of credit in relation to the original lien?
Junior
The buyers purchased a model home and all its furnishings and appliances by using a….
package loan
The primary activity on Freddie Mac is to…
buy and pool blocks of conventional mortgages
The federal Equal Credit Opportunity Act allows lenders to discriminate against potential borrowers on the basis of….
income
The buyers of a residence of Summerset have a mortgage that allows them to borrow additional funds that will be secured by the home at any time. The have what kind of loan?
open-end loan
Programs to help families purchase or operate family farms are provided by….
The Farm Service Agency
The document that sets forth the maximum loan guaranteed to which a veteran is entitled is the…
certificate of eligibility
The law that requires lenders to find ways to help meet the housing needs of those of low and moderate incomes is
the community reinvestment act
FHA ____________ loans
VA ____________ loan
FHA insures
VA guarantees
The standard conventional loan has an ____ % loan-to-value ratio
89%
When loan to value ratios exceed 85%, the risk increases for the __________.
lender
PMI protects a __________ against default and is normally required on conventional loans that exceed 80%
lender
What does the FHA require
That the house meets a minimum standard for habitability
must be owner-occupied
Determines the max mortgage they will ensure
FHA loan can only be used on what type of property
1-4 single family units
NO COMMERCIAL
Under the 203 B-1 program for FHA loans, the borrower must contribute a minimum of _____% towards the purchase of the property
3.5%
FHA _____ have prepayment penalties (does/does not)
does NOT
**but cannot contribute more than 6% of the sale price
One of the benefits of the VA loan is the avaiabilit of 100% financing. A lender will normally make a 100% loan up to ___ x the guaranty. A ______ states the amount of guaranty a veteran is entitled to
4 times
certificate of eligibility
VA loans are for owner-occupied residential only and can be used for….
to build
refinance
improve a home
Note: closing costs cannot be included in the VA loan. and anyone may pay discount points
Explain what loan assumption is
taking over someone elses loan. But the first borrower is still on the hook for the second’s actions.
A non-veteran can assume a veteran’s VA loan but must qualify
An open ended mortgage is a ________
line of credit
Under a sale leaseback, a property owner sells the property and agrees to lease it back at the same time. The seller becomes a tenant and the buyer becomes a landlord.
- what are the advantages for the seller?
- what are the advantages for the buyer?
For the seller: tax deductions, rent deductions, raise equity capital
For the buyer: immediate return on investment
What are the finance fees charged by a lender?
interest origination fee finder's fee service fees discount points
Discount point are charged to increase a __________ yield
Lender’s yield
Both origination fees and discount points are charged as a percentage of….
the loan amount
As a general rule, a lender’s yield increases ____% for each point charged on a 30 year loan.
1/8 %
What fees are NOT considered finance fees and not included in the APR?
title fees appraisal fees survey fees attorney fees credit report fees application fees
What rate includes all your finance fees and is the rate that expresses the relationship between the total finance charges the total loan amount?
APR
Right of Recission: A consumer who refinances his property has ___ business days to rescind his agreement with the lender. The right of recission does not apply to loans to purchase property
3 business days
Real estate licensees must comply with ________ when advertising finance terms. Finance terms called “Trigger Items” place din an ad require full disclosure of all finance terms. Included in trigger items are:
Truth in Lending
down payment number of payments loan term amount of payment finance charge
Full disclosure requires an ad to contain the:
down payment
terms of repayment
APR
What federal law requires lenders to disclose the number of loan applications and loans made in their service area, hence eliminating redlining?
Home Mortgage Disclosure Act
