RE Finance II Flashcards
What does FHA require the buyer to deposit into the escrow account?
- Tax payment
- Insurance Payment
- MIP payment
How long is a Certificate of Reasonable Value (CRV) valid for on an existing property?
6 months
FHA and VA loans differ from conventional loans in what important way?
FHA and VA do not loan funds directly:
- FHA insures loans
- VA guarantees loans
**but the loans themselves are made by approved, qualified lenders.
The Federal Housing Administration (FHA), Department of Veterans Affairs (DVA/VA), and the Texas Veterans Land Board (VLB) all offer what type of loans?
Government-backed loans
An approved VA appraiser must issue what type of document that shows the value of the property to be equal to or greater than the sales price?
Certificate of Reasonable Value (CRV)
Ginnie Mae, Fannie Mae and Freddie Mac assemble loans into a pool of mortgages, then issue a security backed by these mortgages. This type of security is called what?
Participating certificate
-or-
Guaranteed mortgage certificate
Why was Farmer Mac created?
To establish a secondary market for agricultural real estate / rural housing mortgage loans.
And to increase the availability of long-term credit at steady interest rates to American farmers, ranchers and rural homeowners.
What does the abbreviation APR stand for?
Annual percentage rate
The Community Reinvestment Act was passed by Congress in 1977 to do what?
Prevent redlining
Revealing source of credit info, obtaining authorization to seek credit info, and keeping all credit info confidential for the consumer are requirements of lenders by what act?
Fair Credit Reporting Act
What does ECOA prohibit?
(Equal Credit Opportunity Act)
Discrimination against applicants
(on the basis of race, color, religion, national origin, sex, etc)
When lenders provide loans to unqualified homebuyers this type of loan is called what?
Sub-prime
What transfers ownership interest in a property from one party to another?
Conveyance
A lender could require a higher down payment from the unqualified buyer because of the type of neighborhood in which the property is located. What is that process called?
Redlining
Basing an unaffordable loan on the applicant’s assets rather than their ability to repay the loan is an example of what?
Predatory lending
Mortgage fraud affects whom?
A lender
Intentionally making a materially false or misleading written statement to obtain a mortgage loan is a violation of Texas Penal Code and is punishable by what?
A prison term of 2 to 99 years and a fine not to exceed $10,000
What is the major problem with balloon payments?
The borrower has to come up with a large sum of money at the end of the term
When was The Federal Housing Administration (FHA) established and for what purpose?
An Administration established in 1934 to stimulate the housing market in the United States.
Department of Veteran’s Affairs (DVA)
Department for care of military veterans.
Post World War II, the DVA offered opportunities for veterans to purchase a home with no money down. Also called the Veterans Administration (VA).
Certificate of Reasonable Value (CRV)
Certificate issued by an approved VA appraiser showing the value of the property to be equal to or greater than the sales price.
When and for what purpose was the Rural Housing Service (RHS) created?
Created in 1994 to meet rural housing and community development needs.
When/Why was the Texas Veterans Land Board’s (VLB) Veterans Housing Assistance Program created?
Created in 1983 to assist Texas veterans in purchasing a home with a low-interest rate loan with little or no money down.
Texas Veterans Home Improvement Program (VHIP)
Introduced to provide below-market interest rate loans to qualified TX veterans for home repairs and improvements to their existing homes.
Texas Department of Housing and Community Affairs (TDHCA)
Offers mortgage loan funds / down payment assistance to eligible first-time Texas homebuyers of all professions.
What is “My First Texas Home” ?
A Taxable Mortgage Program for first time home buyers which offers better (low interest) mortgage loans with down payment/closing cost assistance of 5% of the mortgage loan.
What is “My Choice Texas Home” ?
A Taxable Mortgage Program available to anyone offering mortgage loans at 30-year, fixed interest rates with down payment/closing cost assistance.
Secondary mortgage market:
Market for banks to repackage and sell mortgages as securities to institutional investors.
Ginnie Mae
A wholly owned corporation within the Department of Housing and Urban Development (HUD), established in 1968 was to promote homeownership. They create and operate a mortgage-backed security program for the Federal Housing Administration and Veterans Administration mortgages.
