Champions School of Real Estate Finance

Seller's market

When supply is low and demand is high

Buyer's market

When supply is high and demand is low

The process of creating a new mortgage loan

Origination

The detailed process of evaluating a borrower's loan application to determine the risk involved for the lender

Underwriting

When there is an excess of money supply in the market

Monetary inflation

Which agency insures deposits in bank and thrift institution for up to $250,000?

Federal Deposit Insurance Corporation

prohibit housing discrimination based on sex, race, color, religion, national origin, disabilities, or familial status

Federal Fair Housing

All residential mortgage loan originators must now be registered with...

Nationwide Mortgage Licensing System and Registry (NMLSR)

The practice of refusing to provide financing in a particular area because of the location

Redlining

What was the Community Reinvestment Act (CRA)?

Law against bank to ensure that banks would serve the needs of the community

The Texas Veteran's Loan Program

Buyes loans from lender

To participate in the program, the Veteran obtains a FHA, VA, or conventional loan from participating lenders

Texas Veteran's Loan Program

Texas Veterans Land Loan

Charges less in fees

What is TDHCA?

(Texas Department of Housing and Community Affairs) Responsible for affordable housing.

The Housing Assistance Program...

Is a loan that is eligible for Veterans, military member and their spouses

The creditor must ensure that the consumer receives the Closing Disclosure form at lease ________ days before the consumer closes the loan

3 Business days

Freddie MAC is a federally chartered corporation for the purpose of...

Purchasing mortgages in the secondary market.

Created in the 1970 to purchase mortgages in the secondary market

Freddie MAC

The market where borrowers and mortgage lender come together to create and negotiate terms of a mortgage transaction is called...

The Primary Market

Addresses imbalance of mortgage credit among regions of the unite state by making funds available. (focus attention to help pump more money into the economy)

Fannie Mae

It standardized mortgage loans

Fannie Mae

Allows lenders to originate mortgage for sale rather than for portfolio investment. (lower rates better fees)

Fannie Mae

Primary Market lender include...

Saving and loans, commercial banks, mutual saving banks, mortgage company's, credit union, individual, or any person or business that provide cash for someone seeking a mortgage

While the majority of loans are sold in the secondary market, many of them are retained. What is this called?

Portfolio loans

Most mortgage brokers specialize as the "_____" between the borrower and the lender

Middleman

One advantage of municipal bonds is that...

Interest paid to investor is not subject to federal income tax, making them appealing to investor who needs to shelter some income from taxation

A claim, lien, charge, or liability attached to and binding real property

Encumbrance

A right given by law to certain creditors to have debts paid out of the properly of a defaulting debtor, usually through a court sale

Lien

A borrower is known as a

Mortgagor

A lender is known as a

Mortgagee

A ______ is a pledge of real estate as security for repayment of a debt

Mortgage

A _____ is the borrowers unconditional promise to repay and includes the amount borrowed, payment amount, due date, and rate of interest

Promissory note

Any excess money left over from the forced sale is given to the ______

Debtor (borrower)

A contract for deed becomes fully executed when....

The final loan payment is made

A second mortgage is an instrument ______ to the primary mortgage

Subordinate

A clause that gives the borrower the ability to replace the primary instrument with another without affecting the subordinate instrument's position

Lifting clause

A clause in which the holder of the mortgage permits a subsequent mortgage to take priority is known as a

Subordinate clause

The term "_______" typically includes monthly payment of 1/12th of the annual taxes, homeowner's insurance and mortgage insurance

House payment

1 point = ________ of the loan amount

1%

Monthly payment includes an amount that is applied first to the interest that is due wit the remainder of the loan payment being applied to the outstanding loan balance

Amortizing loan

The _____ and ______ move up and down with the fluctuations in financial market

1) index

2) resulting rate

Discounted Initial Rate (teaser rate)

A lower interest rate is offered by the lender during the first year or more of the loan

For the borrower planning to remain in his/her home in the long term, or the borrower who is adverse to risk, the best choice in a mortgage would probably be

Fixed Rate

If a buyer plans to sell in the near future

ARM (adjusted rate)

An ______ might also be an ideal product for the borrower that believes that the trend in mortgages rate is downward

ARM

When a buyer wants to purchase a residential property in need of repair, the buyer has to obtain _______ first to purchase the dwelling, additional financing to do the _______, and a permeant mortgage when the work is complete to pay of the interim loans with a permeant mortgage

1) financing

2) rehabilitation construction

Construction to Permanent Loan

When a buyer wants to purchase a residential property in need of repair

Blanket Mortgage

A mortgage which covers more than one piece of real estate. Often used by a developer in the financing of undeveloped lots. Contains a partial release clause.

loan-to-vaule

The percentage of the lesser of the appraised vale or sale price that the lender will lend

FHA is apart of ____

HUD (Department of Housing and Urban Development)

_____ provides insurance on single family, multifamily, and manufactured house

FHA

FHA has a nonpayment as low as...

3.5%

The ______ is a mortgage insurance program that protects the lender from loss in the event of default by the borrower by insuring the full amount of the loan

FHA

The maximum loan-to-value ratio for an FHA loan is...

96.5%

Upfront mortgage insurance can be paid

At closing or added to the loan at funding

Gift funds can not be...

Cash on hand, sales agent, broker, seller

Gift funds donor must be

Relative, domestic partner, or fiancé

Required for all FHA transaction regardless of LTV

Escrow

VA loans needs ____% downpayment

0

Eligibility address the question:

Is the veteran able to obtain a VA loan

Refers to a loan made to a Veteran and another person

Joint loan

Used to qualify a borrower for a loan based upon the proposed house payment and gross monthly income

Front Ratio

The most probable price which a property should bring in an open market is...

Market price

Taxes are assess based upon assessed value of the property and the current tax rate

Ad valorem

Used as the best indicator of value for existing property

Sales Comparison Approach

Chronogical age

actual age in years, months, and days

A marketing time over 6 month may be problematical as it indicates...

A slow market that creates a drag on property value

If a borrower is in default the mortgage servicer may start....

Foreclosure process

The borrower may be responsible for paying a deficiency judgement which is...

Difference between what is owned on the mortgagee and the price the home sells for at the foreclosure auction

In a _________ foreclosure, the lender files suit with the judicial system.

Judical

This ____ is allowed in many states if the mortgagee includes a power of sale clause.

Power of Sale

This type of foreclosure, also known as statutory foreclosure

Power of Sale

The type of foreclosure that involves the lender filing a lawsuit on the homeowner that has defaulted is known as...

Strict foreclosure