VOCAB ACTIVITY 2

Question 1

The average of annual percentage rates offer to highly qualified mortgage bars is used to help determine the market rate threshold for high cost and higher priced mortgage loans under Tila regulations as well for compliance with HMDA

Answer 1

APOR

Question 2

Occurs when a government takes private property for public use the owner receives payment for its market value. The property can proceed to condemnation proceedings. Think of this as mortgage domain expansion.

Answer 2

Eminent domain

Question 3

Depreciation

Answer 3

A decrease in value or price of a property and it’s contents due to changes in market conditions wear and tear or other factors 

Question 4

a consumer who has a continuing relationship with a financial institution

Answer 4

Customer

Question 5

A paper
A.k.a. prime loan

Answer 5

A loan offered to low risk bowers who show a strong likelihood of repayment due to high credit scores low loan to value and assets

Question 6

I charge by the lender to cover administrative cost of making a mortgage. It is paid at the closing and buries with the lender and the type of loan.

Answer 6

Origination fee

Question 7

When a real estate agent or broker does a validation on a home using a similar process to an appraisal it is used as a tool to see if PMI can be removed

Answer 7

Brokers price opinion

Question 8

Action done in good faith

Answer 8

Bonafide

Question 9

Civil penalty

Answer 9

A financial obligation imposed by government authorities upon individual or groups for breaking laws and or rules equals fines an example speeding ticket

Question 10

Cost paid by borrower at closing could include prorated property tax homeowners insurance flood insurance, private mortgage insurance insurance or the PMI for short

Answer 10

Prepaids

Question 11

A type of inter-company relationship in which one of the companies owns less than a majority of the other companies stock can also describe a type of inter Company relationship and which at least two different companies are subsidiaries of a larger company think of Jordan to Nike

Answer 11

Affiliate

Question 12

Compensating factors

Answer 12

Factors such as equity assets, credit score, etc. reflects bars, ability to repay a loan from other sources than just monthly income and monthly debt

Question 13

Closing cost or settlement cost

Answer 13

Fees for a final property transfer not included in price of property. Typical closing cost are origination fees, discount points, appraisal fees and surveys

Question 14

As defined by TILA a residential structure that contains one to four units whether or not that structure is attached to a real property. It includes an individual condominium unit cooperative unit home mobile home and trailer.

Answer 14

Dwelling

Question 15

A clause in a mortgage contract that requires payment in full of the mortgage debt if there is fraud or misrepresentation committed by the borrower during the process of the loan

Answer 15

Due on demand clause

Question 16

The portion of principle and interest due on a loan that is written off when deem to be uncollectible

Answer 16

Charge off (use written off as a clue)

Question 17

Changed circumstance

Answer 17

An active God, war disaster, or any emergency any new or changed information particular to the borrower or transaction such as credit quality value of the home etc.

Question 18

This is a measure of the cost of credit, including interest and other charges expressed as a yearly rate ___ is adjusted for the time value or money so that dollars paid by the borrower upfront carrier a heavyweight then dollars paid in the future, assuming the loan runs to term

Answer 18

APR (annual percentage rate)

Question 19

A cash asset or an asset that is easily converted into cash such as stocks and bonds

Answer 19

Liquid asset (think of easily converted like LIQUID CONVERTING to ice)