GENERAL MORTGAGE KNOWLEDGE

Question 1

Jumbo loan

Answer 1

Mortgages that exceeded the loan limits established by the federal housing finance agency FHFA and do not meet the standards for conforming mortgages

Question 2

Niche loans

Answer 2

Provided under special or unique circumstances by private lenders think of an NBA player young but no credit history, but you know they have finances

Question 3

Nontraditional arm

Answer 3

An option on could be an example of a nontraditional arm 

Question 4

Subprime mortgages

Answer 4

Loans for borrowers with lower qualifications, such as poor credit or bankruptcies

Question 5

In general, both conforming and non-conforming conventional mortgage loans require a mortgage insurance if the borrower has an LTV ratio higher than 

Answer 5

80%

Question 6

Homeowners protection act HPA

Answer 6

The homeowners protection act provides specific provisions that allow homeowners to cancel private mortgage insurance. It also requires the return of premiums and establish notifications and disclosure requirements covers Conventional mortgage loans that exceeded 80% LTV

Question 7

When must the lender or servicer automatically terminate PMI?

Answer 7

When the loan principal balance reach 78% of the original value
Must meet these conditions
Principal balance of loan reaches 80% of the original value
Borrow has no late payments (within 12 months)
No new liens on property proves the value has not depreciated

Question 8

what are the conventional conforming loans? What is their purpose?

Answer 8

Conventional conforming mortgage loans can be fixed rate mortgages, arms, hybrid, arms, or super conforming mortgages super conforming mortgage loans are loans for a high cost areas that require larger loan amounts

Question 9

What are the fees, unique features and securization of conventional conforming loans?

Answer 9

Fanny and Freddie do not set limitation for mortgage loan fees. Fees must be compliant with federal regulations.
Conventional loans allow consumers to get a loan for a second home or an investment property in addition to a primary home
Fanny and Freddie package loans they purchase into collateralized that obligations CDO called mortgage back securities MBS

Question 10

What is a CDO?

Answer 10

Collateralize debt obligation

Question 11

What is a MBS

Answer 11

Mortgage back securities

Question 12

What are the 4C of the conventional programs?

Answer 12

Credit is 620 or higher
Front end is 28%
Back in is 36%
Booking allow up to 45% with compensating factors such as substantial assets
Collateral LTV is 95%

Question 13

What is a conventional non-conforming loan

Answer 13

a conventional loan that does not meet through requirements a establish by Fannie Mae and Freddie Mac. It is considered riskier than a conforming mortgage
usually has lower qualification standards, higher cost, and fees.

Question 14

What are the types of conventional non-conforming loans?

Answer 14

Jumbo loans
Niche Loans
Nontraditional arms
Graduated payment mortgages a.k.a. GPM
Subprime mortgages

Question 15

Mortgages that exceed the loan limits established by the federal housing finance agency FHFA and do not meet the standards set for conforming mortgages

Answer 15

Jumbo loans (think exceed loan)

Question 16

Provided under special or unique circumstances by private members
Baller has a little to no credit and or work history, but a high-level of net worth and the lender makes the loan based on net worth
(think NBA player)

Answer 16

Niche loan

Question 17

What is mortgage insurance?

Answer 17

Mortgage insurance is a former protection for the lender in case the browed default

Question 18

If the LTV ratio was higher than 80% due conforming and non-conforming conventional mortgage loans require mortgage insurance?
If so, what is it called?

Answer 18

The answer is yes this type of mortgage insurance is used for conventional mortgages called private mortgage insurance

Question 19

What is HPA?
What is it a.k.a.
what does it do?
And who is a regulated by? 

Answer 19

Homeowner protection act
Also known as the PMI cancellation act
It provides specific provisions that allow homeowners to cancel private mortgage insurance or PMI
And it is regulated by the CFPB

Question 20

What is the percent that the lender or servicer must automatically terminate for PMI?
What three factors can stop the borrower from canceling PMI?

Answer 20

The lender and or servicer must automatically terminate the PMI when the loans balance principle reaches 78%
1.)No late payments (in the last 12 months)
2.) no new liens on property
3.) disclose to borrowers through payment of notice of right to cancel PMI. 

Question 21

When can non-conforming high risk loans cancel PMI?
Is there early removal?

Answer 21

For not conforming high risk loans the LTB termination is set at 77% and there is no early removal

Question 22

What is a non-conventional mortgage loan

Answer 22

Non-conventional mortgages are also known as government mortgages. The reason they’re considered nonconventional is because they were created to meet a public need not being filled by conventional mortgage loan programs. Made to off set conventional loans

Question 23

Which three different program providers offer non-conventional mortgage loans

Answer 23

The FHA(federal housing administration)
Department of veteran affairs (VA)
And the USDA United States Department of agriculture each program is accompanied by some kind of government insurance OR guarantee

Question 24

Offers a variety of mortgage product to consumers and comparison to conventional conforming products. These loans have lower qualification requirements, therefore, more accessible to customers this is?

Answer 24

The FHA or federal housing agency

Question 25

What are the FHA products, law name, and number

Answer 25

203B fixed rate mortgage
203K rehab and repair
204G good neighbor next-door (GNND)
234C
247
248
251 adjustable rate mortgage (ARM)
255 home equity conversion mortgage (HECM)
513 energy efficient mortgage (EEM)

Question 26

What is a 203B fixed rate mortgage?
Think of multiples of five

Answer 26

15, 20, 25, 30 year terms

Question 27

This FHA product is used for repairing a home
Think make it OK

Answer 27

203K rehab and repair

Question 28

This program provides a 50% discount off the listing price for law-enforcement teachers firefighters and emergency medical technicians
Think the first letter of good

Answer 28

204G Good neighbor next-door

Question 29

What is product 234C?
REMEMBER
Law has first letter of definition for this one

Answer 29

Used for condominiums

Question 30

What is product 247?
Think Hawaii is heaven

Answer 30

Single-family mortgage insurance on Hawaiian homelands FHA insured loans made to native Hawaiians to purchase 124 family dwellings located on Hawaiian homelands HHL

Question 31

What SHA product is made for mortgages on native land
HINT
Think eight nates

Answer 31

248

Question 32

5/1 and 7/1 apply to which FHA product?

Answer 32

251 adjustable rate mortgages ARM

Question 33

FHA reverse mortgage introduced in 1987 part of the national housing act designed to provide governmental stability to the reverse mortgage marketplace

Think 255 keeping HECM ALIVE

Answer 33

255 home equity conversion mortgage
aka (HECM)

Question 34

Originally piloted by a congressional mandate in 1992 and expanded as a national program in 1995 it helps homeowners reduce usage by adding energy saving features to their home
Think EE electric EEM

Answer 34

513 energy efficient mortgages

Question 35

What are the 4 C’s of non-conventional mortgage loans?

Answer 35

Credit goes from 500 to 580
A 500-570 score limits a borrower to a 90% LTV eligibility for 500-700
96.5 LTV for 580+
Refinance 97.75 LTV or 2.25% equity
Front end 31%
Back end 43%
Primary residency only

Question 36

What is a unique feature of a FHA property?

Answer 36

If a property with the FHA financing is re-sold within 90 days of the date of its purchase the property will not be eligible for FHA mortgage loan