Practice 1 Flashcards
Who is on the primary mortgage market
Lenders
Banks
Savings loans
What is the secondary market
Fannie Mae
Freddie Mac
Ginnie Mae
Are banks reluctant to give loans
Yes
What is a promissory note/ note
Evidence of debt
Promise to pay back debt
What is a mortgage
If the borrower doesn’t pay loan back then home is collateral
What is a deed of trust
A third party takes legal title of property
What happens when the bank doesn’t have money to give loans
The bank sells them to the secondary market
What is Ginnie Mae
Provides liquidity to high risk loans from investors to banks with pass through certificates
What loans do Ginnie Mae pick up
High risk loans Fannie and Freddie don’t pick up
What is Fannie Mae and Freddie Mac?
Buy loans on the secondary market
FHA loan characteristics
Low down payment
Lend to credit challenged people
What is the FHA
They do not lend money
Federal housing administration that insures loans
Do government entities lend money?
No
What is the FHA insurance
MIP
Mortgage insurance premium
What is a VA loan
Loans for qualified veterans
What types of homes can veterans purchase with a VA loan and Downpayment
Primary residence
Zero down payment
Are VA loans guaranteed
Yes
How do I identify a conventional loan
No government backing
What loan is private mortgage insurance for
Conventional loans
What loan to value ratio is the baseline for private mortgage insurance
80 percent +
What does the 1866 civil rights act protect
Race
What does the fuse housing act of 1968 protect
Race
Color
Religion
National origin
Ancestry
What did the fair housing act of 1968 add in 74
Sex
What did the fair housing act of 1968 add in 88
Familial status
Mental physical handicaps
AIDS victims
Are alcoholics a protected class in the fair housing act
Yes if they are in treatment
If someone is an illegal substance abuser are they a protected class based on the fair housing act
No
What is steering
Directing buyers to or away from an area
What is blockbusting (panic selling)
Telling people to sell because one group is moving in
Why is redlining
Lenders or insurance companies who wont lend to a certain area
What is an implied contract
Understood through actions
What is an expressed contract
Terms are clearly defined
What is a unilateral contact
Binding to one party
What is a bilateral contract
Promise for a promise
What is an executory contract
Still in progress
What is an executed contract
A completed contract
What would make a contract void
Illegal contract
What is a voidable contract
A minor
Under duress
Temporary incompetence
What is an unenforceable contract
Does not meet the statue of frauds
What is the statue of frauds
Unenforceable in the courts
What is an enforceable contract
Meets all legal requirements
What are the essential elements of a contract
CLOC
Competent parties
Legal object
Offer and acceptance
Consideration
What is agency
When an agent works on behalf of principal or client
Who is a customer?
The third party in a transaction
What are the fiduciary duties?
OLD CAR
Obedience
Loyalty
Disclosure
Confidentiality
Accounting
Reasonable care
In regards to fiduciary duties what is obedience
You must be obedient if it is lawful
In regards to fiduciary duties what is loyalty
You must put clients interest above your own
In regards to fiduciary duties what is disclosure
You must tell your client everything you know
In regards to fiduciary duties what is confidentiality
Don’t disclose client info to third party
In regards to fiduciary duties what is accounting
Deposit money in timely fashion
In regards to fiduciary duties what is reasonable care
Be honest and communicate
What happens with fiduciary duties with dual agency
Turns into fair and honest dealing
What are the three types of agency
Universal agency
General agency
Special agency
What is universal agency
Power of attorney
What is general agency
Universality for the client within one business aspect
What is special agency
Assigned to do one specific thing
What type of agency are real estate agents
Special agents
What is title
Ownership
How do we transfer title
With a deed
What is a deed
Evidence of transfer
What are ways to take title in property
Tenancy in severalty
Tenants in common
Joint tenancy
What is tenancy in severalty
One owner or corporation
What is tenants in common
Two or more owners
What is joint tenancy
Right of survivorship
Going to remaining joint tenants
Canna joint tenant sell or transfer their interest
Yes
What must you have to create joint tenancy
TTIP
Time
Title
Interest
Possession
Will joint tenancy ever be automatic
No
What is tenancy by entirety
Married couple same as joint tenancy
