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Broker Test General Portion > Module 4 Financing > Flashcards

Module 4 Financing Flashcards

1
Q

Types of Lending institutions:

A
  • Federal savings and Loan
  • Commercial Banks
  • Cooperative Banks
  • Credit Union
  • Mortgage Company
  • Life Insurance Companies
  • Private lender
  • Pension Funds
  • Mortgage Brokers
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2
Q

True or False are mortgage brokers lenders?

A

False

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3
Q

Define discount rate:

A

The interest rate set by the Federal Reserve that member banks are charged when they borrow money through the Fed. 266

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4
Q

Define Prime Rate:

A

Interest rate that is given to those who have the best credit rating

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5
Q

Define Blanket Loan:

A

A mortgage covering more than one parcel of real estate, providing for each parcel’s partial release from the mortgage lien upon repayment of a definite portion of the debt. 277

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6
Q

Define Construction Loan AKA Interim Financing:

A

A short-term loan usually made during the construction phase of a building project (often referred to as a construction loan). 278

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7
Q

Define junior lien:

A

An obligation, such as a second mortgage, that is subordinate in right or lien priority to an existing lien on the same property. 2

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8
Q

Define wraparound loan:

A

A method of refinancing in which the new mortgage is placed in a secondary, or subordinate, position; the new mortgage includes both the unpaid principal balance of the first mortgage and whatever additional sums are advanced by the lender. In essence, it is an additional mortgage in which another lender refinances a borrower by lending an amount over the existing first mortgage amount without disturbing the existence of the first mortgage. 278

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9
Q

Define variable rate mortgage:

A

A mortgage loan in which the interest rate varies depending on market conditions. 281

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10
Q

Define Balloon Payment:

A

A final payment of a mortgage loan that is considerably larger than the required periodic payments because the loan amount was not fully amortized. 251

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11
Q

Define negative amortization:

A

Process by which the amount of the loan increases. The mortgagor sets a payment cap, or maximum amount for payments, but the difference between the payment made and the full payment amount is added to the remaining mortgage balance. 249

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12
Q

Define assumption of mortgage

A

Acquiring title to property on which there is an existing mortgage and agreeing to be personally liable for the terms and conditions of the mortgage, including payments. 247

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13
Q

Define Fannie Mae AKA FNMA AKA Federal National Mortgage Association

A

A government-supervised enterprise established to purchase any kind of mortgage loans in the secondary mortgage market from the primary lenders. 269

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14
Q

Define Farmer Mac AKA FHLMC AKA Federal Home Loan Mortgage Corporation

A

The Federal Agricultural Mortgage Corporation—a privately owned and publicly traded company established by Congress to create a secondary market for agricultural mortgage and rural utilities loans and the portions of agricultural and rural development loans guaranteed by the U.S. Department of Agriculture (USDA). 269

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15
Q

Define Ginnie Mae AKA GNMA AKA Government National Mortgage Association

A

A government agency that plays an important role in the secondary mortgage market. It guarantees mortgage-backed securities using FHA-insured and VA-guaranteed loans as collateral. 270

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16
Q

Truth in lending regulation Z:

A

Protect the consumer against miss-leading practices. Forces lenders to disclose everything in a legible and understandable way.

17
Q

Define Right of Recession:

A

If a loan is not with your original mortgage company you have up to 3 days to cancel your new home equity loan. If your existing loan company offers you a loan.

18
Q

Define Mortgage Note:

A

Legal Proof that you owe money to a bank or individual

19
Q

Mortgage Deed:

A

Transfer of Ownership

20
Q

Define grantee:

A

A person who receives a transfer of real property from a grantor. 102

21
Q

Define grantor:

A

The owner transferring title to or an interest in real property to a grantee. 103

22
Q

True or False Massachusetts is a title theory state.

A

True

23
Q

Define title theory

A

Principle in which the mortgagor conveys legal title to the mortgagee (or some other designated individual) and retains equitable title and the right of possession. In effect, because the lender holds legal title, the lender has the right to immediate possession of the real estate and rents from the mortgaged property if the mortgagor defaults. 244

24
Q

Define Mortgage Discharge:

A

Chapter 63 Acts of 2006

Within 45 days of receiving full payment, the mortgagee must record an effective discharge.

25
Q

Agencies that provide funding in Massachusetts:

A
  • Massachusetts Housing Partnership Fund

* Massachusetts Department of housing and community Development

26
Q

Who has to be licensed in Massachusetts

A
  • Mortgage broker License
  • Mortgage broker License - Branch
  • Mortgage lender License
  • Mortgage lender License - Branch
  • Mortgage Loan Originator License
  • Professional Requirments
27
Q

Amortized Loans

A

Payments are the same every month. Disclosure has to state the annual interest rate

28
Q

Define 90 Day Right to Cure:

A

A 90 day right to cure a default after written notice was given by the mortgage to the mortgagor

The 90 day right to cure applied once in a five year period, regardless of the mortgage holder. The last was amended in August 2010 to provide a 150 day right to cure notice

29
Q

Foreclosure under power of sale:

A

Massachusetts is a non-judicial foreclosure process, Ma also requires and order of notice be obtained, to determine if the property owner/s are entitled to relief under the Service-member Civil Relief Act (SCRA) by filing a petition to foreclose in the land court

30
Q

Can a Mortgage company foreclose if a chain in the mortgage process failed to discharge a previous loan:

A

No

31
Q

Define deed in lieu of foreclosure:

A

A deed given by the mortgagor to the mortgagee when the mortgagor is in default under the terms of the mortgage. If accepted by the mortgagee, this is a way for the mortgagor to avoid foreclosure. 253

Broker Test General Portion (29 decks)

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