Random Study Flashcards
What type of loan requires an upfront mortgage insurance fee (MIP) which must happen within 10
Calendar days of closing
FHA
Discrimination by lenders is prohibited by which law?
ECOA
Adverse action letter must be submitted within how many days
30 days
What does term escalation mean in terms of loan
Buyer can increase offer in predetermined amounts whenever someone outbids initial buyer
What is the defensence clause in mortgage
The defeasance clause in a mortgage is a provision that ensures the transfer of the title to the borrower once the mortgage loan has been fully paid off. Essentially, this clause states that the lender’s interest in the property is void once the borrower meets all the payment obligations under the mortgage agreement. Here are the key points:
1. Title Transfer: When the borrower pays off the mortgage in full, the defeasance clause triggers the release of the lender’s claim on the property, transferring full ownership to the borrower. 2. Satisfaction of Debt: It acts as a legal assurance that once the debt is satisfied, the borrower will gain clear title to the property, free of the mortgage lien. 3. Recording the Release: To formalize the process, the lender typically records a satisfaction of mortgage or a deed of reconveyance in the public records, documenting that the borrower has fulfilled their obligations.
This clause provides security to the borrower, knowing that they will gain full ownership of their property upon repayment.
After buyer has finished paying off the house, how long until the lender must send a satisfaction letter
60 days
Who issued the certificate of reasonable value?
VA. Only issued after the house has been inspected by a VA appraiser.
The federal national mortgage Association is also known as
The Federal National Mortgage Association, commonly known as Fannie Mae, is a government-sponsored enterprise (GSE) in the United States. It was established in 1938 as part of the New Deal to expand the secondary mortgage market and increase the availability of affordable home loans. Here are some key points about Fannie Mae:
- Purpose: Fannie Mae’s primary role is to provide liquidity, stability, and affordability to the mortgage market by purchasing and guaranteeing mortgages from lenders. This allows lenders to reinvest their assets into more lending, thereby increasing the availability of mortgage credit to borrowers.
- Secondary Mortgage Market: Fannie Mae does not originate or provide mortgages directly to borrowers. Instead, it buys mortgages from banks and other financial institutions, packages them into mortgage-backed securities (MBS), and sells them to investors. This process helps free up capital for lenders to offer more loans.
- Impact on Homebuyers: By buying mortgages and creating MBS, Fannie Mae helps to lower the interest rates on home loans and makes it easier for more people to qualify for a mortgage, thereby promoting homeownership.
- Government Sponsorship: Although Fannie Mae operates as a privately-owned corporation, it is sponsored by the federal government, which provides certain benefits and oversight. During the 2008 financial crisis, Fannie Mae was placed into conservatorship under the Federal Housing Finance Agency (FHFA) to ensure its financial stability.
Fannie Mae plays a critical role in the U.S. housing finance system by supporting the flow of credit to home buyers and fostering a stable and liquid mortgage market.
Loans for purchasing properties and rule areas are issued by
USDA
The income capitalization approach uses what to determine the market value of the property
Income generated approach, which looks at what the property generate for income to determine its market value often use for apartment buildings, shopping centers, and commercial 
HMDA- home mortgage disclosing act is also known as regulation?
C
The USDA loan requires a minimum credit score of?
640
What does the term exculpatory mean in real estate?
We’re one party limits the liability of another party
In real estate, an exculpatory clause is a provision in a contract that limits or eliminates the liability of one party for certain actions or events. This clause is often included in leases, loan agreements, or purchase contracts to protect one party from being held responsible for specific issues. Here are some key points about exculpatory clauses in real estate:
- Limitation of Liability: Exculpatory clauses can protect a property owner, landlord, or lender from liability for damages, losses, or injuries that occur on the property, often by requiring the other party to waive their right to seek compensation.
- Common Uses: In a lease agreement, an exculpatory clause might limit a landlord’s liability for injuries to tenants or their guests due to certain conditions on the property. In mortgage agreements, it might limit the borrower’s liability to the value of the property in case of default, meaning the lender can only claim the property itself and not pursue the borrower for any remaining debt.
- Enforceability: The enforceability of exculpatory clauses varies by jurisdiction. Courts may scrutinize these clauses closely, particularly if they appear to be overly broad or if the party seeking to enforce the clause had significantly more bargaining power than the other party.
- Fairness and Public Policy: Courts generally evaluate whether the clause was entered into knowingly and voluntarily and whether enforcing it would violate public policy. If a clause is deemed unconscionable or if it tries to waive liability for gross negligence or intentional harm, it may be unenforceable.
Exculpatory clauses are intended to manage risk and liability in real estate transactions, but they must be carefully drafted to ensure they are fair, reasonable, and enforceable.
How does forbearance apply to your mortgage?
For parents allows the borrower to pause or skip a payment for a short period of time 
Forbearance in the context of a mortgage refers to a temporary agreement between a lender and a borrower that allows the borrower to reduce or suspend mortgage payments for a specific period. This arrangement is typically used to help borrowers who are experiencing temporary financial hardship avoid foreclosure. Here’s how mortgage forbearance works:
- Temporary Relief: Forbearance provides short-term relief to borrowers by allowing them to either pause their mortgage payments or make reduced payments for a set period, often three to six months or longer, depending on the agreement.
- Eligibility: Borrowers usually need to demonstrate financial hardship, such as a loss of income, medical emergency, or natural disaster, to qualify for forbearance. Each lender may have different requirements and processes for applying for forbearance.
-
Repayment Options: At the end of the forbearance period, borrowers must repay the missed or reduced payments. Lenders may offer several options for repayment, such as:
- Lump Sum Payment: Paying the total missed amount at once.
- Repayment Plan: Spreading the missed payments over several months by adding extra amounts to regular payments.
- Loan Modification: Modifying the loan terms to include the missed payments and potentially extending the loan term or adjusting the interest rate.
- Impact on Credit: While forbearance itself does not directly impact a borrower’s credit score, it is important for borrowers to stay in contact with their lender and adhere to the agreed terms. Lenders typically report the account as current during forbearance if the borrower complies with the agreement.
- Avoiding Foreclosure: Forbearance is a tool used to help borrowers avoid foreclosure by giving them time to recover financially and resume regular payments once their financial situation stabilizes.
Forbearance can be an essential option for homeowners facing temporary financial difficulties, providing them with time to regain stability without the immediate threat of losing their homes. It is crucial for borrowers to understand the terms and implications of the forbearance agreement and to work closely with their lender to find a suitable resolution.
Minimum score for Fannie Mae
620
What does a loan prospector evaluate?
To assess the credit worthiness of the buyer
Which of the following is not typical of an amortized loan?
Credit card
What is a reverse mortgage?
It’s a long though allows a Bahr to obtain money from home equity 
HMDA is know as regulation ?
C
How much down payment is necessary for a USDA loan
Does not require any down payment
Still need minimum credit score of 580
What percent of fee will you incur for a late payment with a HUD loan?
4%
The most comprehensive ownership of real property known as?
Fee simple absolute
. it’s the ultimate form of holding a title in real estate this is one absolute and unconditional ownership of the property
Which type of tenancy is best for married people?
Tenants by the entirety , hear both Wife and the husband are considered one individual
What protection does a gram leach bill act give to consumers
Wasn’t acted to enhance the privacy of consumer finances
CFPB handles fraud true or false?
True
Morris can receive the Home tool kit because of what law
Respa
 what is the minimum credit score for Fannie Mae?
620
What’s the purpose of a home prospector
To determine the credit worthiness
 the home mortgage disclosure act is also known as as regulation
B
If you’re gonna buy a home with a USDA loan, how much down payment do you need?
None
Respa is regulation
X
Encumbrance
Property has claim on it not by the owner
examples of encumbrance are
deed restrictions , encroachments, easements , liens
what does trigger term mean ?
phrase that legally mandates more disclosure (disclosure during advertising)
right of recession ?
right of buyers to cancel line of credit, equity loan within 3 days of closing
Primary Goal of federal trade commission (FTC) is to?
deter unfair anti competitive business practices
what is the additional 1:12 rule concerning mortgages ?
by making one extra payment can lower mortgage a lot.
