GENERAL MORTGAGE KNOWLEDGE Flashcards
Jumbo loan
Mortgages that exceeded the loan limits established by the federal housing finance agency FHFA and do not meet the standards for conforming mortgages
Niche loans
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
Nontraditional arm
An option on could be an example of a nontraditional arm 
Subprime mortgages
Loans for borrowers with lower qualifications, such as poor credit or bankruptcies
In general, both conforming and non-conforming conventional mortgage loans require a mortgage insurance if the borrower has an LTV ratio higher than 
80%
Homeowners protection act HPA
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
When must the lender or servicer automatically terminate PMI?
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
what are the conventional conforming loans? What is their purpose?
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
What are the fees, unique features and securization of conventional conforming loans?
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
What is a CDO?
Collateralize debt obligation
What is a MBS
Mortgage back securities
What are the 4C of the conventional programs?
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%
What is a conventional non-conforming loan
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.
What are the types of conventional non-conforming loans?
Jumbo loans
Niche Loans
Nontraditional arms
Graduated payment mortgages a.k.a. GPM
Subprime mortgages
Mortgages that exceed the loan limits established by the federal housing finance agency FHFA and do not meet the standards set for conforming mortgages
Jumbo loans (think exceed loan)
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)
Niche loan
What is mortgage insurance?
Mortgage insurance is a former protection for the lender in case the browed default
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?
The answer is yes this type of mortgage insurance is used for conventional mortgages called private mortgage insurance
What is HPA?
What is it a.k.a.
what does it do?
And who is a regulated by? 
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
What is the percent that the lender or servicer must automatically terminate for PMI?
What three factors can stop the borrower from canceling PMI?
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. 
When can non-conforming high risk loans cancel PMI?
Is there early removal?
For not conforming high risk loans the LTB termination is set at 77% and there is no early removal
What is a non-conventional mortgage loan
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
Which three different program providers offer non-conventional mortgage loans
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
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?
The FHA or federal housing agency
What are the FHA products, law name, and number
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)
What is a 203B fixed rate mortgage?
Think of multiples of five
15, 20, 25, 30 year terms
This FHA product is used for repairing a home
Think make it OK
203K rehab and repair
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
204G Good neighbor next-door
What is product 234C?
REMEMBER
Law has first letter of definition for this one
Used for condominiums
What is product 247?
Think Hawaii is heaven
Single-family mortgage insurance on Hawaiian homelands FHA insured loans made to native Hawaiians to purchase 124 family dwellings located on Hawaiian homelands HHL
What SHA product is made for mortgages on native land
HINT
Think eight nates
248
5/1 and 7/1 apply to which FHA product?
251 adjustable rate mortgages ARM
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
255 home equity conversion mortgage
aka (HECM)
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
513 energy efficient mortgages
What are the 4 C’s of non-conventional mortgage loans?
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
What is a unique feature of a FHA property?
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
