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NMLS Exam > Gen Mortgage Knowledge > Flashcards

Gen Mortgage Knowledge Flashcards

1
Q

FHA?

A

Federal housing administration - division of HUD

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2
Q

USdHUD?

A

United states department of housing and urban development

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3
Q

What is GSE

A

Govt sponsored enterprise , created by congress to keep mortgage markets liquid by purchasing conven conforming loans - 1st mortgage only

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4
Q

What is conventional conforming loan

A

Conventional because its not backed by govt and conforming because it must conform to rules of fannie and freddie

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5
Q

GNMA

A

Govt national mortgage association - ginnie mae , back all govt loans

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6
Q

FNMA

A

Federal national mortgage association (fannie mae)

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7
Q

FHLMC

A

Federal housing loan mortgage corporation - freddie mac

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8
Q

Are freddie and fannie backed by govt?

A

No

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9
Q

What does fannie and freddie do in simple terms?

A

Purchase loans like conventional conforming and 1st mortgage

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10
Q

What do FHA loans do?

A

Insures them

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11
Q

What do VA and USDA do?

A

Guarantee Loans

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12
Q

What is service release premium

A

People who purchase loans that are sold in secondary market pay a premium over outstanding balance - premium is income earned by lender selling the loan

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13
Q

What is primary market

A

Where loans are originated

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14
Q

What is secondary market?

A

Loans are sold

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15
Q

Where do fannie and freddie get their money ?

A

Mortgage backed securities

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16
Q

What is encumbrance and examples of it

A

Claim against a property by someone who is not legal owner:
Easement: utility
public/private restriction: sidewalk
encroachment: fence

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17
Q

Financial encumbrance/lien

A

Mortgage - interest in your property in exchange for a debt

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18
Q

if neighbor’s tree is leaning over property line is this considered an encroachment?

A

Yes

19
Q

Which of the following would keep title from transferring free and clear?
A) Encumbrance
B) Failing to pay off current loan
C) Encroachment
D) Utility box

A

B

20
Q

Who is mortgagee/trustee?

A

lender

21
Q

Who is mortgagor/trustor

A

Borrower

22
Q

What is a mortgage

A

Your property as collateral for the loan

23
Q

Note

A

Promise to repay the debt

24
Q

What is another name for pledging collateral

A

Hypothecation

25
Q

Another name for borrowing money to purchase?

A

Leverage

26
Q

What happens to title in title state?

A

Lender holds title to property for borrower through deed of trust

27
Q

What is deed of trust?

A

Document recorded at consummation

28
Q

What happens to deed in lien state?

A

Deed stays with borrower and lender places lien of property

29
Q

In a deed of trust, the power of sale in the event of default is given from the:
a. Beneficiary to the trustee
b. Trustor to the trustee
c. Buyer to the seller
d. Trustee to the beneficiary

A

b

30
Q

What is conveyance

A

When you transfer title from owner to buyer

31
Q

What is re conveyance

A

When borrower pays off the loan the lender must re convey property back to borrower

32
Q

What is contract for deed

A

Complete finance agreement and sales contract in one doc

33
Q

Late payment clause

A

Penalty for paying beyond the due date

34
Q

Prepayment penalty

A

agreement made with lender to keep loan for set period of time or face penalty

35
Q

Hard prepayment penalty

A

set time frame, if property is sold or refinanced during this time , lender charges penalty

36
Q

Soft prepayment penalty

A

Cant refinance without penalty but can sell

37
Q

Due on sale

A

sell your property you must pay off outstanding debt

38
Q

Demand feature

A

Lender demands full payment due to default

39
Q

Mortgage acceleration

A

paying off mortgage faster then required by terms of mortgage agreement

40
Q

Acceleration clause

A

Lender can declare entire debt due , due to borrower deafulting

41
Q

Exculpatory clause

A

Part of agreement that relieves one party from contract

42
Q

Defeasance clause

A

If borrower defaults , lender can take property without foreclosure

43
Q

Table funding

A

when loan is closed and sold at the same time to lender who funded

44
Q

3 docs needed once loan is closed?

A

note, mortgage, and deed

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