Champions Real Estate Finance Questions and Correct Answers the Latest Update
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Course
Champion Real Estate
Institution
Champion Real Estate
Federal National Mortgage Association (FNMA) known as, Fannie Mae
began in 1938 as an agency of the federal government In 1968, Fannie Mae became a
privately owned and managed corporation Fannie Mae operates exclusively in the
secondary market and provides support to mortgage lending institut...
Champions Real Estate Finance
Questions and Correct Answers the
Latest Update
Federal National Mortgage Association (FNMA) known as, Fannie Mae
✓ began in 1938 as an agency of the federal government In 1968, Fannie Mae became a
privately owned and managed corporation Fannie Mae operates exclusively in the
secondary market and provides support to mortgage lending institutions in the
primary market.
Freddie Mac is a federally chartered corporation established as the Federal
Home Loan Mortgage Corporation (FHLMC)
✓ in 1970 for the purpose of purchasing mortgages in the secondary market. Freddie
Mac is a stockholder-owned corporation chartered by Congress to increase the
supply of funds that mortgage lenders, such as commercial banks, mortgage bankers,
savings institutions and credit unions can make available to homeowners and multi-
family investors. Most of its listed stock is owned by savings associations.
Housing and Economic Recovery Act (HERA)
✓ was enacted on July 30, 2008. HERA created the Federal Housing Finance Agency
(FHFA) as the successor agency to the Office of Federal Housing Enterprise
Oversight and the Federal Housing Finance Board. The Office of Federal Housing
Enterprise Oversight had been established in 1992 to regulate Fannie Mae and
Freddie Mac.
On September 7, 2008, the Federal Housing Finance Agency (FHFA) ......
✓ placed Fannie Mae and Freddie Mac in conservatorship. As conservator, the FHFA
has taken over the assets and assumed all the powers of the shareholders, directors,
and officers. It may take any necessary action to restore the firms to a sound and
solvent condition. Stockholders' voting rights are suspended during the
conservatorship, and both firms' CEOs have been replaced. Dividends on common
and preferred stock have been suspended, although the shares continue to trade.
GSE business operations will continue as before; the conservator will delegate
authority to the companies' new management to move forward. The
conservatorship will end when the FHFA finds that a safe and solvent condition has
been restored
The Government National Mortgage Association (GNMA), or Ginnie Mae
✓ , was established in the United States in 1968 to promote home ownership. It is a
wholly-owned government association that operates a mortgage-backed securities
program designed to facilitate the flow of capital into the housing industry.
____approved private institutions issue mortgage-backed securities with payments
that are guaranteed even if borrowers or issuers default on their obligations. ___
securities are the only mortgage backed securities (MBS) to carry the full faith and
credit guaranty of the United States Government,
The Federal Agricultural Mortgage Corporation (Farmer Mac)
✓ is a government-sponsored enterprise with the mission of providing a secondary
market for agricultural real estate mortgage loans, rural housing mortgage loans, and
rural utility cooperative loans. Congress established _____in the Agricultural Credit
Act of 1987.
Farmer Mac I
✓ purchases, or commits to purchase, qualified agricultural or rural housing mortgage
loans, or obligations backed by qualified loans.
Farmer Mac II
✓ purchases the portions of qualified loans that are guaranteed by the U.S. Department
of Agriculture
front ratio
Examify | Smart Grades | Latest update
✓ is used to qualify a borrower for a loan based upon the proposed house payment
and his or her gross monthly income (GMI). The house payment is the monthly
payment of principal, interest, taxes and insurance (PITI). In conventional lending, a
front ratio of 28% means that the house payment (PITI) cannot exceed 28% of the
borrower's gross monthly income.
back ratio
✓ is the ratio of the borrower's total recurring monthly debts, including such
obligations as the house payment, payments on all installment debts, monthly
payments on all junior liens, alimony, car lease payments and other recurring
payment obligations. In conventional lending, it is usually 36%. Both ratios must be
satisfied
Real Estate Mortgage Investment Conduit (REMIC)
✓ allows for the indirect investment in mortgages through the sale of securities. A
____ purchases "pools" of mortgages. The mortgages may be of a particular type or
level of risk
primary market
✓ The market where borrowers and mortgage lenders come together to create and
negotiate terms of a mortgage transaction is called the
Pensions
✓ are fed, as with banks and credit unions, by client deposits. Unlike banks, credit
unions return surplus income to their members in the form of dividends
Life insurance companies
✓ are funded by premiums paid by those insured
The Real Estate Investment Trust
Examify | Smart Grades | Latest update
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