GMK General Terms

Question 1

Conventional Loans

Answer 1

A mortgage that is not made under any federal program.

Question 2

Conforming Loan

Answer 2

A type of conventional loan that meets the lending limits and other criteria established by FNMA or FHLMC.

Question 3

Encumbrance

Answer 3

A debt or lien against the property. An encumbrance prevents title from changing hands until debt or lien is satisfied.

Question 4

Non-Recourse

Answer 4

This refers to a loan without buyback provision

Question 5

PITI

Answer 5

Principal, Interest, Taxes (Property Taxes), and Insurance (Homeowner’s Insurance).

Question 6

Front-end Ratio

Answer 6

Front end Ratio are Housing expense. Housing expense include PITI plus HOA and Mortgage insurance.

Question 7

Back-end Ratio

Answer 7

BE is total Debt Ratio

Question 8

Reconveyance

Answer 8

Reconveyance refers to the transfer of title back to a borrower when the secured debt is fully paid

Question 9

Refinance

Answer 9

Obtaining a new mortgage loan on a property already owned

Question 10

Revolving debt

Answer 10

It’s like a HELOC. it’s an open line of credit

Question 11

Subordinate Lien

Answer 11

2nd mortgage

Question 12

Subprime

Answer 12

These loans are for borrowers who have poor credit, unstable income history, or high debt ratio

Question 13

Table funding

Answer 13

Where a mortgage broker originate, close, and fund a loan using a warehouse line of credit. It’s then immediately transferred to the lender.

Question 14

Underwriting

Answer 14

The Process of evaluating the 8 ATR.