FINANCE CHP3 Flashcards
The largest providers of residential market loans today are
a. mortgage companies
b. mutual savings banks
c. pension funds
d. savings and loan associations .
a. mortgage companies
Commercial banks
a. focus on long -term investments .
b. invest primarily in single-family residential housing
c. rely on savings deposits for most of their funds
d. specialize in short-term commercial lending activities .
d. specialize in short-term commercial lending activities .
The real estate investment that enjoys special tax treatment is
a. insurance company
b. mortgage company
c. REIT
d. savings and loan association
c. REIT
Life insurance companies prefer making loans for
a. large-scale commercial real estate projects
b. resale to the secondary market
c. short-term business purposes
d. single-family homes
a. large-scale commercial real estate projects
Mortgage brokers do NOT
a. act as intermediaries between borrowers and lenders
b. have a variety of lenders from which they can obtain loans for borrowers
c. invest little of their own money in the loans they arrange
d. service the loan (collect the payments) after the loan closes
d. service the loan (collect the payments) after the loan closes
Lenders making loans directly to real estate purchasers are part of the
a. pension market
b. primary market
c. secondary market
d. tertiary market
b. primary market
Which is NOT a primary lender for residential properties
a. commercial banks
b. insurance company
c. mortgage company
d. savings and loan association
b. insurance company
Which agency is the conservator of Fannie Mae and Freddie Mac
a. Federal Housing Administration
b. Federal Housing Finance Agency
c. Housing and Urban Development
d. Office of Federal Housing Enterprise Oversight
b. Federal Housing Finance Agency
Which agency helps to even out the money supply for mortgage loans
a. Fannie Mae
b. FHA
c. FHFA
d. HUD
a. Fannie Mae
Private investors and gov’t agencies that buy and sell real estate mortgages are known as the
a. intermediate market
b. primary market
c. secondary market
d. tertiary market
c. secondary market
To sell loans to the secondary market, the primary market lender must
a. allow the secondary agencies to audit its books
b. be a federal gov’t affiliated lender
c. be willing to suffer significant discounting losses
d. follow the underwriting guidelines of the secondary market agencies
d. follow the underwriting guidelines of the secondary market agencies
The purpose of subprime loans was to
a. allow lenders to justify charging excessive fees
b. give borrowers, with no income or means of repaying, a mortgage loan
c. let lenders add additional unnecessary fee items (like credit insurance) beyond the mortgage account
d. offer borrowers with less than perfect credit or other qualifying difficulties an opportunity to obtain a mortgage loan
d. offer borrowers with less than perfect credit or other qualifying difficulties an opportunity to obtain a mortgage loan
