Unit 13 Government Involvement in Real Estate Financing: Practice Flashcards
What role does the Federal Reserve System have on Real Estate finance?
Sets monetary policy. Consists of 12 banks, and regulates the flow of money and interest rates.
What is the primary mortgage market?
The retail mortgage industry. Lenders that orientate mortgage loans.
What is the secondary mortgage market?
The wholesale mortgage industry, sold in pools. Buys the loans from retail lenders, which frees them to originate more loans.
What are the three components of Real Estate finance?
1-Government influences, the FED
2-The Primary Market (retail)
3-The Secondary Market (wholesale)
Who is Fannie Mae?
Federal National Mortgage Association. Buys conventional, FHA, and VA loans. Semi-Private corporation. Buys mortgage backed securities.
Who is Freddie Mac?
Federal Home Loan Mortgage Corporation, buys primarily conventional loans.
Who is Ginnie Mae?
Government National Mortgage Association, owned by the government part of HUD. Administers special assistance programs and guarantees investment securities issued by private off errors.
What are conventional loans?
Nongovernment loans, usually 80% LTV.
What is PMI?
Private Mortgage Insurance, a buyer purchases to insure the lender that in the event of default the lender will recover its money on the top portion.
What is an FHA loan?
A government insured loan that requires 3.5% down payment.
What is MIP?
Mortgage Insurance Premium, an up front charge made at closing, it can be financed, there is another annual charge billed monthly.
What is a VA loan?
A loan guaranteed by department of veterans affairs.
Zero Points for
1-Vet receiving disability related to service
2-a Vet who is entitled to disability from service if hasn’t received retirement or active duty pay
3-surviving spouse of Vet who died in service from service connected disability.
What is a purchase money mortgage?
Owner financing. The execution of a note and mortgage at the time of purchase. Seller records the mortgage, typically a junior loan.
What is package loan?
Loan that includes real and personal property.
What is a blanket loan?
A loan that covers more than one parcel or lot. Can be used to consolidate loans, or subdivisions. Uses a partial release clause when individual lots are sold.
