MORTGAGE FINANCING

Question 1

FHA Section 203 (b

Answer 1

s a fixed rate program. It is the mostly widely used of all FHA programs. It requires minimum down payment and closing costs.

Question 2

FHA 234 (c)

Answer 2

for loans on condominiums (Condominiums MUST be FHA certified for these loans)

Question 3

FHA 245-

Answer 3

Graduated Payment Plan Mortgage

Question 4

FHA 203K-

Answer 4

llows the purchaser to borrow enough money to rehabilitate a property. (this program will be retired in 2015)

Question 5

FHA Reverse Mortgage

Answer 5

Owners 62 years of age or older

Question 6

FHA also has 251

Answer 6

an adjustable Rate Mortgage Program (ARM).

Question 7

Loan Assumption

Answer 7

FHA loans are assumable, however the rules have been modified through the years. Loans before December 1986 required no pre-approval. Loans acquired after this date require a creditworthiness process for the buyer assuming the loan. Local FHA offices determine specific closing costs which will be borne by the buyer.

Question 8

VA LOANS

Answer 8

VAG - GUARANTEE

Question 9

Vetaran assumes liability

Answer 9

does not pay the mortgage there will be a foreclosure

Question 10

VA LOANS ARE Qualified

Answer 10

A qualified veteran may borrow up to 100% of the loan with no down payment.

Question 11

Veteran first apply for a

Answer 11

Certificate of Eligibility

Question 12

Vetaran Appraisial

Answer 12

Certificate of reasonable value

Question 13

VA does not allow

Answer 13

prepayment penalties

Question 14

Conventional loans

Answer 14

neither guaranteed nor insured by the federal government - loans are made through savings and loan, mortgage brokers, mortgage bankers, banks and credit unions. 20% min down payment - most loans are packaged by the lenders and sold in the 2ndary market Federal home loan mortgage corps.

Question 15

Abstract and opinion

Answer 15

A full summary of all consecutive grants, conveyances, wills, records and judicial proceedings affecting title to a specific parcel of real estate, together with a statement of all recorded liens and encumbrances affecting the property and their present status. The abstract of title does not guarantee or ensure the validity of the title of the property. It is a condensed history that merely discloses those items about the property that are of public record. It does not reveal such things as encroachments and forgeries.

Question 16

Chain of Title

Answer 16

The recorded history of matters that affect the title to a specific parcel of real estate, such as ownership, encumbrances and liens, usually beginning with the original recorded source of the title. The chain of title shows the successive changes of ownership, each one linked to the next so that a “chain” is formed

Question 17

Title insurance-

Answer 17

A comprehensive indemnity contract under which a title insurance company warrants to make good a loss arising through defects in title to real estate or any liens or encumbrances thereon. Title insurance protects a policyholder against loss from some occurrence that has already happened, such as a forged deed somewhere in the chain of title.

Question 18

Savings and Loans

Answer 18

Specialize in long term residential loans. They are one of the largest lenders of residential funds. They may be either federally or state chartered. They are part of the Federal Home Loan Bank system. Deposits must be insured for at least $100,000.

Question 19

Banks

Answer 19

Make short term loans. They are becoming more active in home mortgage loans, FHA, and VA. Examples of short term loans are: Automobile, mobile home, and household loans.

Question 20

Insurance companies

Answer 20

Prefer large commercial projects, but will make residential loans. They like to have an equity position. They are sometimes partners with developers. This type of lending is called:
Participation financing - A mortgage in which the lender participates in the income of the mortgaged property beyond a fixed return, or receives a yield on the loan in addition to the straight interest rate

Question 21

Mortgage Loan Originators

Answer 21

The Dodd Frank Wall Street Mortgage and Consumer Protection Act created criteria for those who take or assist applications and negotiate terms of mortgages. Mortgage Loan originators who finance any federally related transactions must be registered with the Nationwide Mortgage Licensing System (NMLS). Tthose originators who are not required to be registered with the Nationwide system must be licensed through the Florida Office of Financial Regulation

Question 22

Mortgage Brokers

Answer 22

A person, corporation, or firm not otherwise in banking or finance, which negotiates, sells, or arranges loans for compensation. They do not finance loans.

Question 23

Mortgage Bankers

Answer 23

provide their own funds for loans. Sometimes this person or entity services the loan as well.

Question 24

Private individuals

Answer 24

such as sellers financing their own properties or private investors, through mortgage brokers. Sellers who finance more than one property in a two year timeframe may be required to register as a Mortgage Loan Originator.

Question 25

Local governments

Answer 25

for bond programs such as community improvement money.

Question 26

Promissory note

Answer 26

considered to be PERSONAL PROPERTY

Question 27

Equal Credit Opportunity Act (ECOA)

Answer 27

Prohibits discrimination in loan underwriting on the basis of sex, marital status, race, religion, age or national origin.
Prohibits discriminatory treatment of income from alimony, child support, public assistance, or part-time employment;
Prohibits inquiry about, or consideration of, child bearing plans or potential for child bearing.

Question 28

Conditional Loan approval

Answer 28

is given, meaning the lender has agreed to lend the money but certain conditions remain to be completed such as the sale of the previous house, or the taxes being brought up to date. This condition is not actually changed until closing.