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NMLS > Mortgage Categories > Flashcards

Mortgage Categories Flashcards

1
Q

Federal National Mortgage Association

A

Fannie Mae

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2
Q

Federal Home Loan Mortgage Corporation

A

Freddie Mac

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3
Q

Purpose of Fannie Mae & Freddie Mac

A

to facilitate homeownership & mortgage financing in the US; do not make loans but provide a source of funds for lenders

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4
Q

Government National Mortgage Association

A

Ginnie Mae

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5
Q

Purpose of Ginnie Mae

A

similar role to Freddie Mac/Fannie Mae but only applies to FHA/VA loans; part of the Department of Housing & Urban Development (HUD); wholly owned government association

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6
Q

2021 Loan Limit

A

$548,250

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7
Q

loan to value (LTV)

A

the relationship between the loan amt and the appraised value of the property in question; use either the appraised value or the purchase price, whichever is lower

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8
Q

combined loan to value (CLTV)

A

the sum of the first and second mortgage divided by the appraised or purchase price (whichever is lower); uses only the disbursed value of the second lien if it is a line of credit

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9
Q

high loan to value (HLTV)

A

the first lien plus the maximum amt available on the line of credit or second lien divided by the property value; also TLTV

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10
Q

PMI

A

private mortgage insurance; protects lenders from borrower default; required on loans with LTV > 80%

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11
Q

according to Homeowner’s Protection Act (HPA), a lender must cancel PMI when

A
  • a borrower pays down to 78% of the original value if current on payments & in good standing
  • the mortgage loan reaches its midpoint
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12
Q

a borrower ma submit a written request for the cancellation of the PMI

A
  • when the borrower pays the loan amt down to 80%
  • if the borrower has not yet made a payment that was more than 30 days late in the past year or 60 days late in the past 2 years
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13
Q

primary/front-end debt ratio

A

monthly housing expenses (PITI)/monthly gross income

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14
Q

secondary/back-end debt ratio

A

all monthly debt obligations/monthly gross income

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15
Q

Federal Housing Administration (FHA)

A

non conventional loans made by approved lenders and insured by the fed through FHA; only for owner-occupied primary residences; typically required UFMIP & MIP

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16
Q

UFMIP

A

upfront mortgage insurance premium; 1.75% of the base loan amt; paid at closing

17
Q

MIP

A

annual mortgage insurance premium; paid monthly

18
Q

maximum time period required for payment of the annual MIP for FHA loans originated after 6/3/2013

A
  • 11 years for all loans, regardless of the term, with an original principal loan balance less than or equal to 90%
  • the term of the mortgage or 30 years (whichever is less) for all loans with an original principal loan balance of ltv greater than or equal to 90%
19
Q

maximum LTV for an FHA loan

A

96.5%; 3.5% down payment

20
Q

VA loans

A

nonconventional loans made by approved lenders & guaranteed (not insured) by the VA; borrowers must be current or former members of the US military

21
Q

Certificates of Reasonable Value (CRV)

A

VA appraisal reports

22
Q

Guidance on Nontraditional Mortgage Product Risks

A

applies to all residential mortgage loan products that allow the borrower to defer repayment of the loans principal or interest; addresses things such as qualifying borrowers, collateral-dependent loans, risk layering, reduced documentation, simultaneous second-lien loans, introductory interest rates, lending to subprime borrowers, non-owner-occupied investor loans

23
Q

subprime mortgage borrower

A
  • 2+ 30-day delinquencies in the last 12 mos
  • dti of 50%+
  • relatively high default probability
  • a bankruptcy in the last 5 years
  • a judgment, foreclosure, repossession, or charge-off in the past 12 mos
  • 1+ 60-day delinquencies in the past 24 mos
24
Q

predatory lending

A
  • a loan made based predominantly on the value of the property
  • inducing a borrower to repeatedly refinance a loan
  • the use of fraud or deception to conceal the characteristic of a loan from a borrower
25
Q

construction loans

A

temporary loans used to finance the construction of a dwelling; typically lines of credit

26
Q

reverse mortgages

A

loan product geared toward older borrowers who have substantial equity in their homes

27
Q

funds typically elected for reverse mortgages

A
  • a lump sum payment

- a monthly advance for a fixed period of time

28
Q

reverse mortgage loans are due when

A
  • the property is sold
  • the borrower dies
  • a borrower makes a permanent move from the property
  • the borrower fails to live at the property for 12 consecutive months without notifying the lender
  • a borrower fails to comply with the terms of the loan (ex. property taxes, hazard insurance)

NMLS (8 decks)

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