Finance 5 - Sources of Funds: Institutional, Noninstitutional, and Other Lenders Flashcards
Interest is paid to any person having the bonds in the person’s possession.
bearer bonds
Another name for mortgage brokers who both originate and service mortgage loans on behalf of investors.
correspondents
A type of corporate bond with interest coupons attached that may be cashed by the bearer of the bond.
coupon bonds
Unsecured bonds that are a claim against the general assets of a corporation.
debentures
Bank deposits that must be available on demand (e.g., checking accounts.
demand deposits
A relationship that implies a position of trust or confidence wherein one person is usually entrusted to hold or manage property or money for another.
fiduciary responsibility
Sources that make real estate loans. Also called primary lenders. Usually manage and guard entrusted funds over a period of time.
financial intermediaties
System of financing in which the community is held responsible for making payments for capital improvements, usually included in property taxes.
general obligation bonds
Bonds backed by a state’s bonding credit to raise funds for the purchase and improvement of land for industrial and office parks.
industrial revenue bonds (IRBs)
A short-term loan usually made during the construction phase of a building project( often referred to as a construction loan.
interim financing
Any type of secondary (or tertiary) loan where there is a first mortgage in place.
junior financing
A mortgage loan company that originates, services, and sell loans to investors.
mortgage bankers
An agent of a lender who brings the lender and the borrower together. The broker receives a fee for this service.
mortgage brokers
Tax-exempt bonds used to make below-market interest rate loans to developers in redevelopment projects or for low-cost mortgages for first-time homebuyers.
mortgage revenue bonds
Bonds issues by a municipality, county, or state to finance community improvements.
municipal bonds
Fee charges by a lender to cover costs of originating the loan; frequently 1% of the loan amount.
origination fee
When the lender requires an equity position in the property being finances.
participation financing
Trust ownership of real estate by a group of individuals who purchase certificates of ownership in the trust, which in turn invest the money in real property and distributes the profits back to the investors free of corporate income tax.
real estate investment trust (RIET)
A business trust, similar to a REIT, that invests in mortgage securities rather than in real estate.
real estate mortgage trust (REMT)
Bonds issued to a specific owner that cannot be transferred without the owner’s endorsement; interest is paid to the last registered owner.
registered bonds
Bonds to be repaid by the fees charged for the use of the funded project.
revenue bonds
Designed to provide more control over those dealing with financial issues for the consumer.
Secure and Fair Enforcement Mortgage Licensing Act (SAFE Act)
A generic term for a savings association.
thrifts
Funds committed by a commercial bank that mortgage brokers can draw in, enabling them to close individual home loans that may become part of a larger package.
warehouse of funds
A bond purchase at a discount and redeemed after a stated period of time for a full value; patterned after World War II savings bonds.
zero-coupons bonds
