FHA, VA, CONV, Loans and Prime/2nd Mkt 7 Flashcards
1
Q
Lender is Insured from Loss by this Housing Program.This Insurance Protection Allows Borrower to obtain Loans with Higher Loan to Value Ratio (LTV)and Smaller Down Payment as compared to Uninsured Conventional Loans
A
(FHA) Fed Housing Administration - Insured Loans
Lender is Insured from Loss. This Insurance Protection Allows Borrower to obtain Loan with Higher Loan to Value Ratio (LTV) and Smaller Down Payment as compared to Uninsured Conventional Loans
Chap 7
2
Q
FHA is regulated by what Dept?
A
HUD -
Dept of Housing and Urban Development - Regulates FHA.
Chap 7
3
Q
FHA Insured Loans Guidelines
- FHA Ap_____ Lenders make the Loans
- FHA Regulated by Dept of H_____ & Ur___ Development (HUD)
- Borrower Pays (MIP) Mor____ Ins_____ Pre_____. Mortgage Insurance protects the Lender if Property For_____
- Appraisal is called Cond_____ Com______
- Escape Clause (FHA Ame______ Clause) - Used if Appraisal is Not Equal or Above Purchase Price. Buyer can Back-Out.
- Owner Occupied - 1 to __ Units Only
- No Pre______ Pen_____
A
FHA Insured Loans Guidelines
- FHA Approved Lenders make the Loans
- FHA Regulated by Dept of Housing & Urban Development (HUD)
- Borrower Pays (MIP) Mortgage Insurance Premium. Mortgage Insurance protects the Lender if Property Forclosed
- Appraisal is - Conditional Commitment
- Escape Clause (FHA Amendatory Clause) - Used if Appraisal is not Equal or Above Purchase Price. Buyer can Back-Out.
- Owner Occupied - 1 to 4 Units Only
- No Prepayment Penalties
4
Q
Cond______ C_________
FHA Appraisal
A
Conditional Commitment -
FHA Appraisal
Chap 7
5
Q
VA Loan Requirements
- VA Ap______ Lenders makes Loans
- Cert______ of Elig_____ - Veteran Eligibility and Amount Guarantee (Entitlement)
- VA F______ Fee - So No MIP
- Appraisal is called - Cert_____ of Reas_____ V___ (CRV)
- No Down Payment - ____% LTV Unless Over Purchase Price
- Owner Occupied - 1 to __ Units
- No Pre_______ Penalties
A
VA Loan Requirements
- VA Approved Lenders makes Loans
- Certificate of Eligibility - Veteran Eligibility and Amount Guarantee (Entitlement)
- VA Funding Fee - So No MIP
- Appraisal - Certiticate of Reasonable Value (CRV)
- No Down Payment - 100% LTV Unless Over Purchase Price
- Owner Occupied - 1 to 4 Units
- No Prepayment Penalties
Chap 7
6
Q
Es____ Clause (FHA Amen_____ Clause) -
- Used if FHA Appraisal Value is Not Equal to or Greater than Purchase Price.
- Buyers must See Appr_____ or Can Back Out of Contract.
A
Escape Clause (FHA Amendatory Clause) -
- Used if FHA Appraisal Value is not equal to or greater than purchase price.
- Buyers must See Appraisal or Can Back Out of Contract.
Chap 7
7
Q
(CRV) Cer_____ of Rea______ Value -
VA Appraisal
A
(CRV) Certificate of Reasonable Value -
VA Appraisal
Chap 7
8
Q
VA F_____ Fee -
Charged on VA loan instead of MIP
A
VA Funding Fee -
Charged on VA loan instead of MIP
Chap 7
9
Q
FHA and VA Loans -
Both types of loans have No Pre______ Pen______
A
FHA and VA Loans -
Both types of loans have No Prepayment Penalties
Chap 7
10
Q
Assist Lenders to Provide Loans** for **Low to Moderate Income Households in “Rural Areas”
A
(USDA) US Dept of Agriculture Loans (Guaranteed) - Rural Areas
Assist lenders to Provide Loans** for **Low to Moderate Income Households in “Rural Areas”
Chap 7
11
Q
P
AZ Department of Housing provides these Loans in Hardest Hit Areas by Foreclosures
A
Pathway to Purchase - Down Payment Assistance - Foreclosure Areas
AZ Department of Housing provides these Loans in Hardest Hit Areas by Foreclosures
Chap 7
12
Q
SBA Loans (S____ B_____ Adm_______) -
Loans made to Purchase or Expand a Small Business
A
SBA Loans (Small Business Administration) -
Loans made to Purchase or Expand a Small Business
Chap 7
13
Q
Con_______ Loans -
Loan is made Solely Based on Security and Borrower’s Ability to Repay.
No Guarantees or Government Insurance
A
Conventional Loans -
Loan is made Solely Based on Security and Borrower’s Ability to Repay.
No Guarantees or Government Insurance
Chap 7
14
Q
Conventional (Un______) Loans -
Loans that Require __% down. Based on Borrower’s Ability to Repay. No Government Insurance or Guarantee
A
Conventional (Unisured) Loans -
Loans that Require 20% down. Borrower’s Ability to Repay. No Government Insurance or Guarantee
Chap 7
15
Q
Conf______ Loans
Loans that meet all Fannie Mae and Freddie Mac Guidelines.
A
Conforming Loans -
Loans that meet all Fannie Mae** and **Freddie Mac Guidelines
Chap 7
16
Q
Loans that “Do Not” meet Fannie Mae or Freddie Mac Guidelines.
A
Non-Conforming Loans -
Loans that “Do Not” meet Fannie Mae or Freddie Mac guidelines.
Chap 7
17
Q
Loans offered at a Higher Interest Rate for Less Qualified Borrowers
A
Subprime Loans - (Less Qualified)
Loans offered at a Higher Interest Rate for Less Qualified Borrowers
Chap 7
18
Q
Pri_____ I_____ and H____ M____ L_____
Loans offered at Higher Interest for
“Hard to Finance” Borrowers and Properties
A
Private Investor and Hard Money Loans -
Loans offered at Higher Interest for
“Hard to Finance” Borrowers and Properties
Chap 7
19
Q
Assist lenders to provide loans for Low to Moderate Income Households in Rural Areas
A
(USDA) US Dept of Agriculture Loans (Guaranteed) - Rural Areas
Assist lenders to provide loans for Low to Moderate Income Households in Rural Areas
Chap 7
20
Q
Discount Point and Buydowns
Used to Increase L____’s Y___ or Lower Borrowers Rate
A
Discount Point and Buydowns
Used to Increase Lender’s Yield or Lower Borrowers Rate
Chap 7
21
Q
Loan O_____ Fee -
Covers Initial Cost of Loan
A
Loan Origination fee -
Covers Initial Cost of Loan
Chap 7
22
Q
T___ S___ F___
Charge to Hire a Tax Service Company to Infom Lender When Property Taxes are Due and Payable.
A
Tax Service Fee
Charge to Hire a Tax Service Company to Inform Lender When Property Taxes are Due and Payable.
Chap 7
23
Q
Und_______ Fee -
Offset Cost to determine Borrower’s Ability Qualify or to Repay Loan
A
Underwriting fee -
Offset Cost to determine Borrower’s Ability Qualify or to Repay Loan
Chap 7
24
Q
P______ ______ and D______ _____ ______
AZ Department of Housing provides these Loans in Hardest Hit Areas by Foreclosures
A
Pathway to Purchase - Down Payment Assistance - Foreclosure Areas
AZ Department of Housing provides these Loans in Hardest Hit Areas by Foreclosures
Chap 7
25
**Estimate** how much **Borrower can Afford to Borrow**
**Pre-Qualification** -
**Estimate** how much **Borrower can Afford to Borrow**
**Chap 7**
26
**Pre-Approval** -
**Completed** **L\_\_\_ App**, **Inc\_\_\_\_** **provided**, and **Borrower's****Cr\_\_\_ Report reviewed**that _indicates_ a**Strong Possibility Loan will Close.**
**Pre-Approval** -
**Completed** **Loan App**, **Income** provided, and **Borrower's****Credit Report reviewed**that indicates a**Strong Possibility Loan will Close.**
**Chap 7**
27
R\_\_ L\_\_
Lender Guarantees the **Interest Rate will not Change** Prior to Closing.
**Rate Lock -**
Lender Guarantees the **Interest Rate will not Change** Prior to Closing.
**Chap 7**
28
F\_\_\_\_ R\_\_\_
**Interest Rate Could Change** prior to Closing
**Floating Rate**
**Interest Rate Could Change** prior to Closing
**Chap 7**
29
**Credit Score (Fico Score)** -
**Ma\_\_\_\_\_\_\_\_ Formula** to indicate **Person's Credit History**
**Credit Score (Fico Score)** -
**Mathematical Formula** to indicate **Person's Credit History**
**Chap 7**
30
-
1. **_Financial Intermediary_** that **Make "Large Loans" to _Commercial_ and **_Industria_**l Borrowers.**
2. **_Residential Loans Done_ - thru Mortgage Companies**
3. **_Buys Loans_ in Secondary Market**
**Insurance Companies** -
1. **_Financial Intermediary_** that **Make "Large Loans" to _Commercial_ and _Industrial_ Borrowers.**
2. **_Residential Loans Done_ - thru Mortgage Companies**
3. **_Buys Loans_ in Secondary Market**
**Chap 7**
31
**_HOA Reserve Funding_** **(FHA Loans Require)** -
**FHA Loans and other Loans Require HOA Reserves:**
1. **\_\_% Of HOA Budgeted Income,**
2. **\_\_%** - **If less than \_\_% Occupancy**
**_HOA Reserve Funding_** **(FHA Loans Require)** -
**FHA Loans and other Loans Require HOA Reserves:**
1. **10%** - **Of HOA Budgeted Income,**
2. **20%** - If less than **50% Occupancy**
**Chap 7**
32
**Assist lenders to provide** loans for **Low to Moderate Income** **Households** in **Rural Areas**
**(USDA) US Dept of Agriculture Loans** - (Guaranteed) -
**Assist lenders to provide** loans for **Low to Moderate Income** **Households** in **Rural Areas**
**Chap 7**
33
**Dis\_\_\_\_\_\_\_\_ and Bu\_\_\_\_\_\_\_\_**
**Used to** **_Increase Lender's Yield_** or **Lower Borrowers Rate**
**Discount Point** **and Buydowns**
Used to **_Increase Lender's Yield_** or **Lower Borrowers Rate**
**Chap 7**
34
**P\_\_\_\_\_\_ to P\_\_\_\_\_\_\_\_ - D\_\_\_\_\_\_ P\_\_\_\_ A\_\_\_\_\_\_\_**
**AZ Department of Housing** provides these **Loans in Hardest Hit Areas by Foreclosures**
**Pathway to Purchase - Down Payment Assistance** - **Foreclosure Areas**
**AZ Department of Housing** provides these **Loans in Hardest Hit Areas by Foreclosures**
**Chap 7**
35
**(DCR) D\_\_\_ Cov\_\_\_\_\_\_ Rat\_\_\_** -
**_Net Income_****divided by** (**_Annual) PI Payments_**
**=** **_Ratio of Net Income_** **from "_Commercial Properties_**."
**Lenders Require Above 1**
* **_Net Income_**
* **_(_Annual) PI Payments**
**(DCR) Debt Coverage Ratio** -
**_Net Income_****divided by** (**_Annual) PI Payments_****= Ratio of Net Income** **from "_Commercial Properties_**."
**Lenders Require Above 1**
* **_Net Income_**
* **_(_Annual) PI Payments**
**Chap 7**
36
**C\_\_\_\_\_\_\_ Cre\_\_\_\_ Tran\_\_\_\_\_\_\_**
**(Financial Institutes/Merchants -Person/Company) -**
**Acquires Property for P\_\_\_\_\_\_, Fam\_\_\_ or Household** purposes **(Loan, Lease or Sale under $25,000)**
**Owner Occ and 1-4 Units Only**
**Consumer Credit Transaction**
**(Financial Institutes/Merchants -Person/Company) -**
**Acquires Property for _Personal_, _Family_ or _Household_** purposes. **(Loan, Lease or Sale under $25,000)**
**Owner Occ and 1-4 Units Only**
**Chap 7**
37
**Non-Consumer Credit Transaction**
(Finance Institutes/Merchant - Person or Company) -
**Acquires Property for Bus\_\_\_\_\_ Purposes**. **Profit Motives** **For Inv\_\_\_\_\_ Purposes**, **Property Taxes**
**Non-Consumer Credit Transaction**
(Finance Institutes/Merchant - Person or Company) -
**Acquires Property for Business Purposes. Profit Motives For Investment Purposes, Property Taxes**
**Chap 7**
38
**W\_\_\_\_\_ R\_\_\_\_\_ from the L\_\_\_\_\_** -
**Seller must request,** when **Seller _Does Not_ want to remain Liable for Loan and wants Buyer to take over loan.**
**Written Release from the Lender** -
**Seller must request**, when **Seller _Does Not_ want to remain Liable for Loan and wants Buyer to take over Loan**
**Chap 7**
39
**N\_\_\_\_\_\_\_ -**
**_Process_ of Lender _Rewriting Loan_ Terms** **of Existing Loan**, _Subs New Buyer_ and Releases Seller's Liability.
**_Novation_ -**
**_Process_ of Lender _Rewriting Loan_ Terms** **of Existing Loan**, _Subs New Buyer_ and Releases Seller's Liability.
**Chap 7**
40
**Red\_\_\_\_ Cert\_\_\_\_\_ (Assu\_\_\_\_\_ Letter)** - **For Assumed Loans**
1. **Lender Gives to Buyer Assuming Loan**.
2. **Verifies Loan Balance and Terms** when **Buyer takes over Payments**
**Reduction Certificate (Assumption Letter)** - **For Assumed Loans**
1. **Lender Gives to Buyer Assuming Loan**.
2. **Verifies Loan Balance and Terms** **when Buyer takes over Payments**
**Chap 7**
41
**Financial Intermediaries (Primary Mortage Market Lenders) -**
**_Originate Loans directly to Borrower_:**
1. **Comm\_\_\_\_ Banks** and **C\_\_\_\_ Unions**,
2. **Ins\_\_\_\_\_** **Companies,**
3. **Port\_\_\_\_\_ Lenders,**
4. **Mort\_\_\_\_\_** **Brokers** and **Mortgage Bankers**
**Financial Intermediaries (Primary Mortage Market Lenders) -**
**_Originate Loans directly to Borrower_:**
1. **Commercial** **Banks** and **Credit Unions**,
2. **Insurance** **Companies,**
3. **Portfolio Lenders,**
4. **Mortgage** **Brokers** and **Mortgage Bankers**
**Chap 7**
42
1. **3 Financial Intermediaries (Prime Market) that _Originate Loans_**
2. **Buy Loans - in _Secondary Market_**
**_Commercial_ _Banks_ and _Credit Unions_ and _Insurance Companies_**
1. **3 Financial Intermediaries (Prime Market)** that **_Originate Loans_**
2. **_Buy Loans_** in **_Secondary Market_**
**Chap 7**
43
-
1. **_Financial Intermediary_** that **Make "Large Loans" to Commercial and Industrial Borrowers.**
2. **_Residential Loans Done_ - thru Mortgage Companies**
3. **_Buy Loans_ in Secondary Market**
**Insurance Companies** -
1. **_Financial Intermediary_** that **Make "Large Loans" to Commercial and Industrial Borrowers.**
2. **_Residential Loans Done_ - thru Mortgage Companies**
3. **_Buys Loans_ in Secondary Market**
**Chap 7**
44
**Por\_\_\_ Lenders** -
A Primary Market Lender (Financial Intermediary). **Does Not Sell Loans. Non-Conforming or Jumbo Loans**
**Portfolio Lenders** -
A Primary Market Lender (Financial Intermediary). **Does Not Sell Loans. Non-Conforming or Jumbo Loans**
**Chap 7**
45
**M B\_\_\_\_\_\_\_\_ AND \_\_\_\_\_\_\_\_\_**
1. **Primary Lender (Financial Intermediary)**
1. **_May_** **_Represent_ - _Life Insurance Co_.**, **_Pension Funds_**, and **_Private Investors_** **in _Originating Loans_**.
2. **Sells Loans** to **Secondary Market**
**_Mortgage Brokers_ and _Bankers_**
1. **Primary Lender (Financial Intermediary)**
2. **_May_** **_Represent_ - _Life Insurance co_.**, **_Pension Funds_**, and **_Private Investors_** **in _Originating Loans_**.
3. **_Sells Loans_** to **Secondary Market**
**Chap 7**
46
**AZ Dept of Fin\_\_\_\_\_\_ Inst\_\_\_\_\_\_**
**"Licenses" Mortgage Loan Originators (ML0)**
**AZ Dept of Financial Institutions**
**"Licenses" Mortgage Loan Originators (ML0)**
**Chap 7**
47
**(MLO) Mortgage Loan Originators**
1. **_Licensed By:_ Ariz Dept of Fin\_\_\_\_\_\_ Inst\_\_\_\_\_**
2. **_Regulated By_: Nat\_\_\_\_\_ Mortgage Lic\_\_\_\_\_ System (NMLS)**
**(MLO) Mortgage Loan Originators**
1. **_Licensed by_** **Ariz Dept of Financial Institution**
2. **_Regulated by_** the **Nationwide Mortgage Licensing System (NMLS)**
**Chap 7**
48
**Gathering of Loans** to **Sell in Secondary Market**
**Warehousing** -
**Gathering of Loans** to **Sell in Secondary Market**
**Chap 7**
49
**Assig\_\_\_\_\_ -**
The "Process" of **Selling a Loan to Another Lender**
**Assignment -**
The "Process" of **Selling a Loan to Another Lender**
**Chap 7**
50
1. **Certificate Signed** **by Borrower** **stating**
1. **Exact Loan Balance and Interest Rate**.
2. **Tenant to Verify Lease Terms**.
3. **Used by Lenders Selling Loans.**
**Estoppel Certificate** -
1. **Certificate Signed by Borrower** **Stating**
1. **Exact _Loan Balance and Interest Rate_**.
2. **Tenant to Verify _Lease Terms_**_._
3. **Used by Lenders Selling Loans.**
**Chap 7**
51
Used to **Increase Lender's Yield** or **Lower Borrowers Rate**
**Discount Point or Buydowns**
Used to **Increase Lender's Yield** or **Lower Borrowers Rate**
**Chap 7**
52
**Borrower Makes Payments to this Service Provider**, which are **Passed to Loan Investor**. **Seller Carrybacks often use Title Companies**
**Chap 7**
**Loan Servicing** -
**Borrower Makes Payments to this Service Provider**, which are **Passed to Loan Investor**. **Seller Carrybacks often use Title Companies**
**Chap 7**
53
**I\_\_\_\_\_\_\_\_\_ \_\_\_\_\_\_\_** -
1. **_Financial Intermediary_** that **Make "_Large Loans_" to Commercial and Industrial Borrowers.**
2. **_Residential Loans Done_ - thru Mortgage Companies**
3. **_Buys Loans_ in Secondary Market**
**Insurance Companies** -
1. **_Financial Intermediary_** that **Make "Large Loans" to Commercial and Industrial Borrowers.**
2. **_Residential Loans Done_ - thru Mortgage Companies**
3. **_Buys Loans_ in Secondary Market**
**Chap 7**
54
**Redu\_\_\_\_ Cert\_\_\_\_\_ (Assu\_\_\_\_\_ Letter)**-
1. **Lender Gives to Buyer who is _Assuming Loan_**_._
2. **Verifies Loan Balance and Terms** when **Buyer Takes Over Payments**
**Reduction Certificate (Assumption Letter)**-
1. **Lender Gives to Buyer who is _Assuming Loan._**
2. **Verifies Loan Balance and Terms** when **Buyer Takes Over Payments**
**Chap 7**
55
1. **Issues Certicates** that **Guarantee _FHA and VA Loans_** to **Secondary Market Purchasers.**
2. **_Operates Special Assistance_** aspects of **Federally _Assisted Low Income_ Housing.**
**Ginnie Mae aka Gov Nat'l Mortgage Assoc.(GNMA) -**
1. **Issues Certificates** **that _Guarantee FHA and VA Loans_** to **Secondary Market Purchasers**.
2. **_Operates Special Assistance_** aspects of **Federally _Assisted Low Income_ Housing.**
**Chap 7**
56
**Fannie Mae (Fed**. **Nat'l Mortgage Assoc)** and **Freddie Mac (Fed. Home Loan Mort. Corp)**
1. **Sets Standards for Conv\_\_\_\_\_ Loans.**
2. **Buys Conv\_\_\_\_\_ Loans in Sec\_\_\_\_\_ Market.**
3. **Sells Loans and Issues Bo\_\_\_ - Secured by Mortgages (Mortgage Backed Securities).**
4. **Created "Uniform Res Loan App (URLA-Form \_\_\_\_).**
**Fannie Mae (Fed**. **Nat'l Mortgage Assoc)** and **Freddie Mac (Fed. Home Loan Mort. Corp)**
1. **Sets Standards for Conventional Loans.**
2. **Buys Conventional Loans in Secondary Market.**
3. **Sells Loans and Issues Bonds - Secured by Mortgages (Mortgage Backed Securities).**
4. **Created "Uniform Res Loan App (URLA-Form 1003)**
**Chap 7**
57
1. **Certificate Signed** **by Borrower** **stating:**
1. **Exact Loan Balanace and Interest Rate**.
2. **Tenant to Verify Lease Terms**.
3. **Used by Lenders Selling Loans.**
**Estoppel Certificate** -
1. **Certificate Signed by Borrower** **Stating:**
1. **Exact _Loan Balance and Interest Rate_**.
2. **Tenant to Verify _Lease Terms_**_._
3. **Used by Lenders Selling Loans.**
**Chap 7**
58
**AZ Department of Housing** provides these **Loans in Hardest Hit Areas by Foreclosures**
**Pathway to Purchase - Down Payment Assistance** - **Foreclosure Areas**
**AZ Department of Housing** provides these **Loans in Hardest Hit Areas by Foreclosures**
**Chap 7**
59
**Financial Intermediaries "_Buy Loans_" from _Secondary Market_**
1. **Ins\_\_\_\_\_\_ Companies - _(Buy Loans)_**
2. **Com\_\_\_\_\_ Banks and Credit Unions - (_Buy Loans)_**
3. **Fa\_\_\_\_ M\_\_ - _(Buy Conventional Loans)_**
**Financial Intermediaries "_Buy Loans_" from _Secondary Market_**
1. **Insurance Companies (Buy Loans)**
2. **Commercial Banks and Credit Unions (Buy Loans)**
3. **Fannie Mae (Buy Conventional Loans)**
**Chap 7**
60
**Financial Intermediaries who "_Sell Loans_" to _Secondary Market_**
1. **Mortgage Br\_\_\_\_** and **Ba\_\_\_\_\_\_,**
2. **_Fannie Mae_ Sells** **Loans** and **Issues Secured Bonds (Mortgage Backed Securities)**
3. **_GNMA_ - Issues Cert Guarantees for VA/FHA loans to 2nd Market P\_\_\_\_\_\_\_\_\_.**
**Chap 7**
**Financial Intermediaries who "_Sell Loans_" to _Secondary Market_**
1. **Mortgage Brokers** and **Bankers,**
2. **_Fannie Mae_ Sells** **Loans** and **Issues Secured Bonds (Mortgage Backed Securities)**
3. **_GNMA_ - Issues Cert Guarantees for VA/FHA loans to 2nd Market Purchasers**
**Chap 7**
61
**Ins\_\_\_\_ Conv\_\_\_\_\_\_ Loans** -
**Loans that have** **PMI**, and are **above 80% but no more that 97%** **of Appraised Value.**
**Insured Conventional Loans** -
**Loans that have** **PMI**, and are **above 80% but no more that 97%** **of Appraised Value.**
**Chap 7**
62
Market where **Primary Market Loans are Bought and Sold to Other Lenders and Investors.**
**Secondary Market** -
Market where **Primary Market Loans are _Bought_ and _Sold_ to Other Lenders and Investors**.
**Chap 7**
63
**Mortgage Brokers and Bankers**
1. **Primary Lender (Financial termediary)**
2. **May** **Represent L\_\_ Insurance Co.**, **P\_\_\_\_\_ Funds**, and **Pr\_\_\_\_\_ Investors** **in "Originating Loans**."
3. **_Sells Loans_** to **Secondary Market**
**Mortgage Brokers and Bankers (Sell)**
1. **Primary Lender (Financial termediary)**
2. **May** **Represent _Life Insurance Co_.**, **_Pension Funds_**, and **_Private Investors_** **in Originating Loans**.
3. **_Sells Loans_** to **Secondary Market**
**Chap 7**
64
**(MGIC) Mor\_\_\_\_ Guarantee Ins\_\_\_\_\_ Corporation** -
**A Private Company** where Mortgage Insurance Providers **Assume a Portion of a Lender’s or Investor’s Risk in Making a Mortgage Loan**, ultimately Shielding Taxpayers from Liability
**(MGIC) Mortgage Guarantee Insurance Corporation** -
**A Private Company** where Mortgage Insurance Providers **Assume a Portion of a Lender’s or Investor’s Risk in Making a Mortgage Loan**, ultimately Shielding Taxpayers from Liability
**Chap 7**
65
**Borrowers must pay Upfront Insurance at Closing** and will also **Have their Annual Premium Added to their Monthly Mortgage Payments**.
**Also Protects Lender in Event of Foreclosure**
**(MIP) Mortgage Insurance Premium** -
**Borrowers must pay Upfront Insurance at Closing** and will also **Have their Annual Premium Added to their Monthly Mortgage Payments**.
**Also Protects Lender in Event of Foreclosure**
**Chap 7**
66
**Lender is** **Insured from Loss**. **This Insurance Protection Allows Borrower to obtain _Loan with Higher Loan to Value Ratio (LTV)_****and _Smaller Down Payment_** as compared to Unisured Conventional Loans
**(FHA) Fed Housing Administration - Insured Loans**
**Lender is** **Insured from Loss**. **This Insurance Protection Allows Borrower to obtain _Loan with Higher Loan to Value Ratio (LTV)_****and _Smaller Down Payment_** as compared to Unisured Conventional Loans
**Chap 7**
67
**Mo\_\_\_\_ Market** -
## Footnote
**Determines the Discount Points**
**Money Market** -
## Footnote
**Determines the Discount Points**
**Chap 7**
68
1. **Certificate Signed by Borrower** **Stating**
1. **Exact _Loan Balance and Interest Rate_**.
2. **Tenant to Verify _Lease Terms_**_._
3. **Used by Lenders Selling Loans.**
**Estoppel Certificate** -
1. **Certificate Signed by Borrower** **Stating**
1. **Exact _Loan Balance and Interest Rate_**.
2. **Tenant to Verify _Lease Terms_**_._
3. **Used by Lenders Selling Loans.**
**Chap 7**
69
**(GNMA) Ginnie Mae aka Gov Nat'l Mortgage Assoc -**
1. **_Issues Certs_** **that** **Guar\_\_\_\_\_\_ _FHA and VA Loans_** to **Secondary Market Purchasers.**
2. **_Operates Special Assistance_** **Aspects of Federally Assisted "L\_\_ Inc\_\_\_\_" Housing.**
**(GNMA) Ginnie Mae aka Gov Nat'l Mortgage Assoc -**
1. **_Issues Certs_** **that Guaranteeing _FHA and VA Loans_** to **Secondary Market Purchasers**.
2. **_Operates Special Assistance_** **Aspects of** **Federally Assisted _Low Income Housing_.**
**Chap 7**
70
**AZ Department of Housing** provides these **Loans in Hardest Hit Areas by Foreclosures**
**Pathway to Purchase - Down Payment Assistance** - **Foreclosure Area**
**AZ Department of Housing** provides these **Loans in Hardest Hit Areas by _Foreclosures_**
**Chap 7**
71
1. **Primary Lender (Financial Intermediary)**
2. **May** **Represent _Life Insurance Co_.**, **_Pension Funds_**, and **_Private Investors_** **in "_Originating Loans_**."
3. **_Sells Loans_** to **Secondary Market**
**Mortgage Brokers and Bankers (Sell)**
1. **Primary Lender (Financial Intermediary)**
2. **May** **Represent _Life Insurance Co_.**, **_Pension Funds_**, and **_Private Investors_** **in "Originating Loans**."
3. **_Sells Loans_** to **Secondary Market**
**Chap 7**
72
**Mor\_\_\_\_ (Receives Loan)**
**In a Loan**, **the Lender is the Person who Receives Loan**
**Mortgagee (Receives Loan)**
In a Loan the **Lender is known as Mortgagee.**
**Chap 7**
73
**\_\_\_\_\_\_\_\_ and \_\_\_\_\_\_\_\_**
1. **Sets Standards** for Conventional Loans.
2. **Main Purpose** is to **_Buy Conventional Loans_ in Secondary Market.**
**Fannie Mae/Freddie Mac**
1. **Sets Standards** for Conventional Loans.
2. **Main Purpose** is to **_Buy Conventional Loans_ in Secondary Market.**
**Chap 7**
74
**FHA and L\_\_\_\_\_** -
**Gives Approval,** **when Seller has** **Buyer, who wants to _Assume FHA Loan_**
**FHA and Lender** -
**Gives Approval,** **when Seller has** **Buyer, who wants to _Assume FHA Loan_**
**Chap 7**
75
**Certificate** issued by the **VA to Veterans Stating the Eligibility and Amount of Guarantee (Entitlement)**.
**Note: When Paid Off - Eligibity is Restored.**
**Certificate of Eligibility -**
**Certificate** issued by the **VA to Veterans Stating the Eligibility and Amount of Guarantee (Entitlement)**.
**Note: When Paid Off - Eligibity is Restored.**
**Chap 7**
76
**Ginnie Mae aka Gov N\_\_\_\_ Mor\_\_\_\_ Asso\_\_\_\_ (GNMA)**
1. **_Issues Certificates_** **that _Guarantee_ _FHA and VA Loans_** to **Secondary Market Purchasers**.
2. **_Operates Special Assistance_** aspects of **Federally Assisted _Low Income Housing_.**
**Ginnie Mae aka Gov Nat'l Mortgage Assoc (GNMA) -**
1. **_Issues Certificates_** **that _Guarantee_ _FHA and VA Loans_** to **Secondary Market Purchasers.**
2. **_Operates Special Assistance_** aspects of **Federally Assisted Low Income Housing.**
**Chap 7**
77
**Required** **on _Conventional Loans_** **above 80%-97% LTV.**
**Mortgage Insurance (MI) or Private Mortgage Insurance (PMI)**
**Required** **on _Conventional Loans_** **above 80%-97% LTV.**
**Chap 7**
78
**J\_\_\_\_ Loans -**
**Non-Conforming loans** that **Exceed Max Dollar Limits set by Fannie Mae or Freddie Mac** and have Less Favorable Terms.
**Jumbo Loans -**
**Non-conforming loans** that **Exceed Max Dollar Limits set by Fannie Mae or Freddie Mac** and have Less Favorable Terms.
**Chap 7**
79
**R\_\_\_ Lock -**
Lender Guarantees **interest Rate will Not Change prior to closing**
**Rate Lock -**
Lender guarantees **interest rate will not change prior to closing.**
**Chap 7**
80
**Floating Rate -**
**When Rate Could Change** Prior to Closing.
**Floating Rate -**
**When Rate Could Change** Prior to Closing.
**Chap 7**
81
1. **Primary Lender (Financial Intermediaries)**
2. **_May_** **_Represent_ _Life Insurance Co_.**, **_Pension Funds_**, and **_Private Investors_** **in "_Originating Loans_**."
3. **_Sells Loans_** to **Secondary Market**
**_Mortgage Brokers and Bankers_**
1. **Primary Lender (Financial Intermediary)**
2. **_May_** **_Represent_ _Life Insurance Co_.**, **_Pension Funds_**, and **_Private Investors_** **in _"Originating Loans_**_."_
3. **_Sells Loans_** to **Secondary Market**
**Chap 7**
82
**Tri-\_\_\_\_\_ Credit Report -**
**Single Credit Report** that brings together Data from all **3 Major Credit Reporting Agencies.**
**Tri-Merged Credit Report -**
**Single Credit Report** that brings together Data from all **3 Major Credit Reporting Agencies.**
**Chap 7**
83
**Loan As\_\_\_\_\_\_\_ -**
**Buye**r does not Originate Loan but **Takes Over Payments and Assumes Personal Liability on Existing Loan.**
**Loan Assumption -**
**Buye**r does not Originate Loan but **Takes Over Payments and Assumes Personal Liability on Existing Loan.**
**Chap 7**
84
1. **_Issues Certificates_** **that Guarantees FHA and VA loans** to **Secondary Market Purchasers.**
2. **Operates Special Assistance** aspects of **Federally Assisted "_Low Income_" Housing.**
**Ginnie Mae aka Gov Nat'l Mortgage Assoc (GNMA) -**
1. **_Issues Certificates_** **that Guaranteeing FHA and VA loans** to Secondary Market Purchasers.
2. **_Operates Special Assistance_** aspects of **Federally Assisted _Low Income Housing_.**
**Chap 7**
85
**L\_\_\_\_ to V\_\_\_ R\_\_\_\_ -**
Often used **Ratio in Mortgage Lending** to **Determine the Amount Necessary to Put in a Down-Payment** and **Whether a Lender will Extend Credit to a Borrower.**
**Loan Amt / Appraised Value = LTV**
**Loan to Value Ratio -**
Often used **Ratio in Mortgage Lending** to **Determine the** **Amount Necessary to Put in a Down-Payment** and **Whether a Lender will Extend Credit to a Borrower.**
**Loan Amt / Appraised Value = LTV**
**Chap 7**
86
**P\_\_\_\_\_\_ M\_\_\_\_ M\_\_\_\_\_ -**
**Originate Loans Directly with Borrowers.** These **Lenders** are also **called "Financial Intermediaries".**
**Primary Mortgage Market -**
**Originate Loans Directly with Borrowers.** These **Lenders** are also **called "Financial Intermediaries".**
**Chap 7**
87
1. **Primary Lender (Financial Intermediary)**
2. **May** **Represent _Life Insurance Co_.**, **_Pension Funds_**, and **_Private Investors_** **in "_Originating Loans_**."
3. **_Sells Loans_** to **Secondary Market**
**Mortgage Brokers and Bankers**
1. **Primary Lender (Financial Intermediary)**
2. **May** **Represent _Life Insurance Co_.**, **_Pension Funds_**, and **_Private Investors_** **in "Originating Loans**."
3. **_Sells Loans_** to **Secondary Market**
**Chap 7**
88
**FHLMC - Federal H\_\_\_\_ L\_\_\_ M\_\_\_\_ Corp -**
Another Term for **Freddie Mac**
**FHLMC - Federal Home Loan Mortgage Corp -**
Another Term for **Freddie Mac**
**Chap 7**
89
1. **Primary Lender (Financial Intermediary)**
2. **May** **Represent _Life Insurance Co_.**, **_Pension Funds_**, and **_Private Investors_** **in "_Originating Loans_**."
3. **_Sells Loans_** to **Secondary Market**
**Mortgage Brokers and Bankers**
1. **Primary Lender (Financial Intermediary)**
2. **May** **Represent _Life Insurance Co_.**, **_Pension Funds_**, and **_Private Investors_** **in "Originating Loans**."
3. **_Sells Loans_** to **Secondary Market**
**Chap 7**
90
**URLA - Uniform R\_\_\_\_\_\_ L\_\_\_\_ Application -**
**_Created by Fannie Mae_ for Residential Loans**
**URLA - Uniform Residential Loan Application -**
**_Created by Fannie Mae_** **for Residential Loans**
**Chap 7**
91
**Interest Problems Formula**
**Interest Problems Formula -**
* **_Interest_**
* **Principal x Rate**
**Chap 7**
92
**Gathering of Loans** to **Sell in Secondary Market**
**Warehousing** -
**Gathering of Loans** to **Sell in Secondary Market**
**Chap 7**
93
**Loan Problems Formula**
**Loans Problem Formula -**
* **_Loan Amount_**
* **Value x Rate**
**Chap 7**
94
**3 Financial Intermediaries** **that**"**Originate Loans" in Prime Market and "Buy Loans" in Secondary Market**
**3 Financial Intermediaries** **that**"**Originate Loans" in Prime Market and "Buy Loans" in Secondary Market**
1. **Commercial Banks & Credit Unions**
2. **Insurance Companies (Originate Commerical & Industrial Loans)**
**Chap 7**
95
**E\_\_\_\_\_\_\_\_ \_\_\_\_\_\_** -
1. **Certificate Signed by Borrower** **Stating**
1. **Exact _Loan Balance and Interest Rate_**.
2. **Tenant to Verify _Lease Terms_**_._
3. **Used by Lenders Selling Loans.**
**Estoppel Certificate** -
1. **Certificate Signed by Borrower** **Stating**
1. **Exact _Loan Balance and Interest Rate_**.
2. **Tenant to Verify _Lease Terms_**_._
3. **Used by Lenders Selling Loans.**
**Chap 7**
96
1. **_Financial Intermediary_** that **Make "Large Loans" to Commercial and Industrial Borrowers.**
2. **_Residential Loans Done_ - thru Mortgage Companies**
3. **_Buys Loans_ in Secondary Market**
**Insurance Companies** - **(Buy)**
1. **_Financial Intermediary_** that **Make "Large Loans" to Commercial and Industrial Borrowers.**
2. **_Residential Loans Done_ - thru Mortgage Companies**
3. **_Buys Loans_ in Secondary Market**
**Chap 7**
97
**Funds For Conventional Loans are secured from**:
1. FHA
2. Fannie Mae
3. Freddie Mac
4. Private Sources
**Funds For Conventional Loans are secured from**:
1. FHA
2. Fannie Mae
3. Freddie Mac
4. **Private Sources**
**Chap 7**
98
**Funds for FHA loans are secured from:**
1. Fannie Mae
2. Approved Local Lenders
3. FDIC
4. FHA
**Funds for FHA loans are secured from:**
1. Fannie Mae
2. **Approved Local Lenders**
3. FDIC
4. FHA
**Chap 7**
99
**Which of the following loans has the Highest Loan to Value?**
1. Conventional
2. Conventional with PMI
3. FHA
4. VA
**Which of the following loans has the Highest Loan to Value?**
1. Conventional
2. Conventional with PMI
3. FHA
4. **VA**
**Chap 7**
100
**The Government Agency that Supervises and Administers Subsidy Programs for Low-Income Housing is:**
1. FHA
2. Fannie Mae
3. GNMA
4. Freddie Mac
**The Government Agency that Supervises and Administers Subsidy Programs for Low-Income Housing is:**
1. FHA
2. Fannie Mae
3. **GNMA**
4. Freddie Mac
**Chap 7**
101
**Freddie Mac and Fannie Mae DO NOT:**
1. Sell Loans
2. Sell Bonds Secured by Mortgages
3. Buy Conventional Loans
4. Originate FHA and VA Loans
**Freddie Mac and Fannie Mae DO NOT:**
1. Sell Loans
2. Sell Bonds Secured by Mortgages
3. Buy Conventional Loans
4. **Originate FHA and VA Loans**
**Freddie Mac and Fannie Mae DOES:**
1. **Set Conventional Loan Standards**
2. **Buy Coventional Loans from Secondary Market**
3. **Sell Bonds by Secured by Mortgages**
**Chap 7**
