General Mortgage knowledge Flashcards
Traditional Mortgage
Loans that would have to be repaid over a 30 year term
Full Amortization
if you make every payment according to the original schedule on your term loan, your loan will be fully paid off by the end of the term. The word amortization simply refers to the amount of principal and interest paid each month over the course of your loan term.
what is a primary mortgage market
where credit institutions originate loans
When the ARM has rate caps of 5/2/6 the 6 refers to what
Maximum rate can decrease over the life of the loan
Name a Violation of the fair housing act
What is Encumbrance
A claim Against property held by one who is not the legal owner
What is the truth in lending act TILA
protects you against inaccurate and unfair credit billing and credit card practices. It requires lenders to provide you with loan cost information so that you can comparison shop for certain types of loans
How to calculate what percentage
smaller value divided by larger value x 100
How to calculate annual interest rate formula
Principal X Interest Rate = Annual interest rate
what law deals with credit, APR, & advertising of consumer loans
Tila / Regulation Z
What regulation Prohibits kickbacks
Respa
Which regulation requires the lender to cancel PMI when the loan reaches 78% LTV
HPA- homeowner protection act
What is LTV
loan-to-value (LTV) ratio is a measure comparing the amount of your mortgage with the appraised value of the property. The higher your down payment, the lower your LTV ratio
Which Regulation prohibits fee splitting
Respa
X is the letter used to describe which regulation
Respa
Respa is the acronym used to describe which law
Real estate settlement procedures act
What type of mortgage requires a non refundable funding fee
VA
What is the provision in a mortgage enabling a lender to demand full repayment if the borrower defaults on the loan
Acceleration clause
What is the provision in a mortgage enabling a lender to demand full repayment if the borrower transfers the loan
alienation clause
What does CFPB stand for
Consumer Financial Protection bureau
What two laws created the CFPB
Dodd Frank act & Consumer finance protection act
Which regulation is designed to help meet the credit needs of the communities in which it operates
CRA- Community Reinvestment Act
What is Entitlement with a VA loan
The amount that the government will guarantee on a borrowers VA loan
Residual Income Method
Determination is made if a veteran has enough income after paying debts
What is HDMA
Home Mortgage Discrimination Act
Discrimination by lender in terms of race, gender, & gross income of the borrower
What is a jumbo Loan
A loan that exceeds the maximum loan amount that Fannie Mae and Freddie Mac will buy, making it nonconforming.
What is considered a nonconforming Loan
Examples of non-conforming loans are jumbo and government backed loans, including FHA, VA, and USDA
Adjustable-Rate Mortgage (ARM)
Balloon Payment
A final lump-sum payment at the end of a loan term to pay off the entire remaining balance of principal and interest not covered by payments during the loan term.
When does Amortization occur
It occurs when a loan balance decreases because of periodic installments paid on the principal and interest.
Redlining
When a lender refuses to make loans secured by property in a certain neighborhood because of the racial or ethnic composition of the neighborhood.
Blockbusting
getting owners to sell their homes (often at a deflated price) by suggesting the ethnic or racial composition of the neighborhood is changing, with the implication that property values will decline as a result.
Steering
Channeling prospective buyers or tenants to particular neighborhoods based on their race, religion, national origin, ancestry, or membership in any other protected class.
Fiduciary
Person in a position of trust, held by law to high standards of good faith and loyalty
Concealment
Occurs when a licensee fails to disclose information that is material to a decision to a party to whom the licensee has such a duty.
