Quiz 6 Evolution of Financing Flashcards
Which agency oversees the conservatorship of Fannie Mae and Freddie Mac?
Federal Housing Finance Agency
“A debt secured by real estate with an interest rate that may move up or down following a specified schedule or in accordance with the movements of a standard or index to which the interest rate is tied” is the definition of a(n) ___________ rate mortgage.
adjustable
If interest rates on bank interest-bearing accounts are too low, investors will invest their money elsewhere. This demonstrates the concept of
disintermediation
In 1968, FNMA was split into two organizations:
Fannie Mae and Ginnie Mae. FNMA became Fannie Mae and Ginnie Mae.
The most common competitors for mortgage funds are
long term government bonds
_________________ is defined as “the Federal Reserve’s efforts to influence the level of economic activity by regulating the availability of money and the rate of interest.”
Monetary policy
Who owns the Fed?
No one, it is independent
A property sold for $240,000 and the buyer put $50,000 down and got a mortgage for the balance of the purchase price. The seller paid two points. How much was that?
$3,800
“Currency plus demand and time deposits plus the liabilities of nonbank financial intermediaries” is the definition of
money supply
The interaction of buyers and sellers who trade long or intermediate-term money instruments.” is the definition of the _____________ market.
capital
“A market created by government and private agencies for the purchase and sale of existing mortgages, which provides greater liquidity for mortgages. Fannie Mae, Freddie Mac, and Ginnie Mae are the principal operators…” is the definition of the ___________ mortgage market.
secondary
The price of money is
an interest rate
_______________ are either mutual or stockholder owned.
Savings banks
To whom is the Fed accountable?
Congress
Which federal agency was formed to insure bank deposits?
FDIC
What happened to Fannie Mae and Freddie Mac in 2008?
they were taken into government conservatorship
All of the following are secondary market participants
Fannie Mae, Ginnie Mae, Freddie Mac
_________________ is defined as “the Federal Reserve’s efforts to influence the level of economic activity by regulating the availability of money and the rate of interest.”
Monetary policy
Which would be benefits of the secondary mortgage market system?
smoother flow of money, re-infusion of funds into local lenders, increased objectivity of underwriting decisions
Which agency oversees the conservatorship of Fannie Mae and Freddie Mac?
Federal Housing Finance Agency
When the seller keeps the existing mortgage on behalf of the buyer, plus lends additional money to cover the price paid above the balance of the underlying loan that is called a:
Wrap-around contract
The Federal Reserve consists of ____ regional banks.
12
“The interaction of buyers and sellers who trade short-term money instruments” is the definition of the _____________ market.
money
Which federal agency was created for the purpose of providing funds to savings and loan (thrift) institutions to make mortgages more affordable?
Federal Home Loan Bank Board, formed way back in 1932.
Which was created first? FHFA, Fannie Mae, FHA, Freddie Mac
FHA
The Fed can influence ___________ of money.
both the supply and the cost
_______________ are known as thrift institutions.
Savings & loans
___________ loans are assumable without the permission of the lender.
FHA and VA
Unbundled mortgage models are found in
Unbundled mortgage models can be found in the secondary mortgage market. For example, one lender may originate a loan while another lender services it.
“A market created by government and private agencies for the purchase and sale of existing mortgages, which provides greater liquidity for mortgages. Fannie Mae, Freddie Mac, and Ginnie Mae are the principal operators…” is the definition of the ___________ mortgage market.
secondary
