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Texas Real Estate > Finance > Flashcards

Finance Flashcards

1
Q

public finance

A

tax systems, government expenditures, budget procedures, stabilization instruments, debt issues and other government concerns

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2
Q

corporate finance

A

managing assets and debt for a business

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3
Q

real estate finance

A

provides the flow of money and credit needed to complete transactions for the purchase and/or development of real property

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4
Q

mortgage lending activity

A

loan originations as well as purchases and sales of loans through the secondary mortgage market

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5
Q

cycles

A

periodic, irregular, up and down movements in economic activity

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6
Q

short term fluctuations

A

occur within a year

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7
Q

NBER

A

National Bureau of Economic Research

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8
Q

modest inflation rate

A

between 2%-4%

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9
Q

3 major financial markets in the world

A

NY, London, Tokyo

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10
Q

capital market

A

long term or intermediate term securities are traded

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11
Q

heterogeneous

A

each property has unique features

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12
Q

bond

A

debt instrument

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13
Q

fiscal policy

A

the gov’t policy on taxes and gov’t spending and affects demand

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14
Q

monetary policy

A

influences the cost and availability of credit to promote economic growth

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15
Q

expenditure approach

A

focuses on total expenditures on goods and services produced in the period

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16
Q

income approach

A

focuses on the payments to the factors of production involved in those production activities in a period

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17
Q

FOMC

A

federal open market committee - sets nations monetary policy

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18
Q

aggregate demand

A

total spending

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19
Q

GDP

A

gross domestic product

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20
Q

quantitative easing

A

the purchase of varying financial assets from commercial banks

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21
Q

functions of federal reserve system

A
  • acts as the banker for the us treasury
  • supervises and regulates banking institutions and certain consumer protection laws
  • acts as lender of last resort to nations bank
  • determines monetary policy
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22
Q

federal reserve funds

A

overnight loans banks use to meet the reserve requirements at the end of each day

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23
Q

mint

A

manufacture, distribute, and circulate precious metal and collectible coins and national medals

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24
Q

OCC

A

office of the comptroller of the currency

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25
Q

FinCEN

A

financial crimes enforcement network

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26
Q

FDIC

A

federal deposit insurance company

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27
Q

FHFA

A

federal housing finance agency

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28
Q

GSE

A

government sponsored enterprise

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29
Q

housing GSE’s

A

Fannie Mae, Freddie Mac and federal home loan bank system

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30
Q

who regulates the GSE’s

A

FHFA

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31
Q

Fannie Mae

A

formed to the secondary market for FHA loans after the great depression

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32
Q

Freddie Mac

A

links main st to wall st by purchasing, securitizing and investing in home mortgages

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33
Q

2 anti trust laws

A

federal trade commission act and the clayton act

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34
Q

USDA guaranteed loan

A

gov’t insured 100% purchase loan for properties in rural areas

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35
Q

CFPB

A

Consumer financial protection bureau

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36
Q

Regulation C

A

requires a lending institution to post a notice about the availability of HMDA data in the lobby

37
Q

HMDA

A

home mortgage disclosure act

38
Q

FCRA

A

federal credit reporting act

39
Q

FACTA

A

fair and accurate credit transactions act

40
Q

RESPA

A

Real estate settlement procedures act, ensures disclosures and fees are done and shared in a timely manner

41
Q

finance charge

A

the dollar amount the credit will charge

42
Q

consummation

A

occurs when the borrower becomes contractually obligated to the lender on the loan

43
Q

page 1 of disclosure

A

loan terms
projected payments
costs at closing

44
Q

page 2 of closing disclosure

A

loan costs table

other costs table

45
Q

page 3 of closing disclosure

A

calculating cash to close

summaries of transactions

46
Q

page 4 of closing disclosure

A

loan disclosures
adjustable payment table
adjustable interest rate table

47
Q

page 5 of closing disclosure

A

loan calculations table
other disclosures
contact information

48
Q

portfolio lenders

A

hold loans permanently and originates mortgage loans

49
Q

mortgage banker

A

direct lender that lends its own money

50
Q

mortgage broker

A

originates loans with the intention of brokering them to lending institutions

51
Q

mortgage backed security

A

a type of asset backed security that is protected by a collection of mortgages usually with similar characteristics

52
Q

REMIC

A

real estate mortgage investment conduit - holds commercial and residential mortgages in trust

53
Q

tranche

A

a part or segment of a structured security

54
Q

stripped mortgage backed securities

A

pass through securities that are created by separating the principal and interest payments from underlying mortgage assets

55
Q

third party originators

A

originate but do not underwrite or fund a loan

56
Q

commercial banks

A

all purpose lender

57
Q

types of thrift institutions

A

savings and loan
savings banks
mutual savings bank

58
Q

savings and loan

A

pools the savings of individuals to fund residential mortgages

59
Q

savings banks

A

specialize in consumer and commercial loans

60
Q

mutual savings banks

A

owned by depositors, each of whom have rights to net earnings of the bank

61
Q

credit union

A

owned and operated by members

exempt from federal taxation

62
Q

NCUAB

A

national credit union association board

supervises and insures

63
Q

life insurance companies

A

major supplier of money for large commercial loans to developers and builders

64
Q

take out loan

A

long term permanent financing used to pay off a construction loan

65
Q

financial semi fiduciaries

A

non depository lenders

mortgage company and real estate investment trust

66
Q

warehouse line

A

revolving line of credit extended to a mortgage company from a warehouse lender to make loans to borrowers

67
Q

REIT

A

real estate investment trust

a security that sells like a stock on the major exchanges

68
Q

crowdfunding

A

the practice of funding a project by raising small amounts of money from a large number of people typically via the internet

69
Q

loan correspondent

A

third party originator that originates loans for a sponsor

70
Q

table funding

A

the lenders ability to provide loan funds on the same day the transaction is signed by all parties

71
Q

amortization

A

the liquidation of a financial obligation on an installment basis

72
Q

index

A

a measure of interest rates

73
Q

margin

A

an extra amount the lender adds

74
Q

note rate

A

the interest rate on the ARM loan at the time it is funded

75
Q

negative amortization

A

an increase in the principal balance caused by low monthly payments that do not pay all the interest due on the loan

76
Q

assumable feature

A

allows a borrower to transfer a loan to another borrower, if the new buyer qualifies for the loan

77
Q

recasting

A

automatic payment adjustment on ARM

78
Q

conventional loan

A

any loan without government insurance or guarantees

79
Q

conforming loan

A

a conventional loan that follows the guidelines of fannie mae or freddie mac

80
Q

DTI

A

debt to income ratio

81
Q

PITI

A

principal, interest, taxes, insurance

82
Q

MPS

A

minimum property standards

83
Q

direct endorsement lenders

A

lenders who have met FHA standards

84
Q

seasoned

A

money has been in the bank for at least 3 months

85
Q

front ratio

A

the percentage of the borrowers monthly gross income that is used to pay the monthly housing expense

86
Q

how to calculate front ratio

A

divide the housing expense by the borrowers gross monthly income

87
Q

back ratio

A

income needed to pay for all recurring debt

88
Q

entitlement

A

the maximum guaranty that the VA will provide for the veterans home loan

89
Q

CRV

A

certificate of reasonable value - appraisal for VA loan

Texas Real Estate (2 decks)

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