Unit 8: Sources for Real Estate Loans Flashcards
What is the Federal Reserve?
It regulates the supply of money and interest rates in the United States.
What is the primary mortgage market?
Where loans are made.
What is the secondary mortgage market?
Where loans are bought and sold.
What is the difference between mortgage bankers and mortgage brokers?
Bankers provide financing; they are direct lenders. Brokers bring together borrowers and lenders; they act as intermediaries.
What are mortgages bought and sold?
Existing mortgages are bought from banks to provide money to the primary mortgage to make more loans.
T/F If their mortgage is sold on the secondary market, borrowers may be directed to send payments to a different address or company. Their loan terms may also change.
False. The loan terms do not change.
The secondary mortgage market is made up of 3 main organizations. What are they?
- FNMA - Fannie Mae
- GNMA - Ginnie Mae
- FHLMC - Freddie Mac
What is FNMA?
It is a government sponsored corporation that buys all types of mortgages.
“Slutty Sister”
What is GNMA?
An agency within HUD that buys FHA and VA mortgages.
“Sister”
What is FHLMC?
A government sponsored corporation that mainly buys conventional mortgages from savings and loan associations and commercial banks.
What kind of loan, conforming or nonconforming, meets the standards of Fannie Mae and Ginnie Mae and can be sold in the secondary market?
Conforming loans
What is another name for nonconforming loans?
“Jumbo loans” that is larger than Fannie Mae standards and may be difficult to sell on the secondary market. It is very risky!
