Exam (elaborations)
Champions School of Real Estate - Real Estate Finance
Champions School of Real Estate - Real Estate Finance
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Champions School of Real Estate - RealEstate Finance
A loan unable to be sold to Fannie Mae or Freddie Mac (i.e. A sub-prime loan)
Correct Ans - Non-Conforming Loan
VA Correct Ans - Veteran's administration - assists veterans in the
purchase of housing by guaranteeing loans)
Seller's equity Correct Ans - Cash price minus the loan balance
A clause often found in a blanket loan allowing the borrower to obtain partial
releases of specific lots by making required lump sum payments. Correct
Ans - Release Clause
One percent of a loan that is a loan processing fee Correct Ans -
Origination Point
The repayment or satisfaction of a debt by installment payments of principal
and interest on a regular basis. Correct Ans - Amortization
A law allowing individuals to inspect their credit files, correct errors and
attach explanatory statements. Correct Ans - Fair Credit Reporting Act
(FCRA)
A law requiring lenders to meet the needs of the community in which they are
chartered to do business. Correct Ans - Community Reinvestment Act
A clause allowing a lender to move to or take a lower lien position. Correct
Ans - Subordination Clause
A loan whose payments start low and rise every year, usually for five years,
after which they level off for the remaining term of the loan - can result in
negative amortization. Correct Ans - Graduated Payment Mortgage
(GPM)
, An increase in debt due to payments less than the interest owed - can be
associated with a graduated payment mortgage. Correct Ans -
Negative Amortization
TIL, REG Z, Regulation Z, or the Consumer Credit Protection Act - a law passed
to help consumers understand the true cost of borrowing money. Correct
Ans - Truth in Lending
Buyer's Equity Correct Ans - The down payment amount at closing.
DD 214 Correct Ans - Veteran's discharge papers - provided to
demonstrate eligibility for a VA loan.
A loan secured by real property plus personal property. Correct Ans -
Package loan
An upfront payment of points used to reduce the borrower's monthly
payment - by paying points at closing a borrower may secure a lower rate on
the loan. Correct Ans - Buy Down
A clause outlining the obligations of the original borrower and a new
borrower in the event the loan is assumed. Correct Ans - Assumption
Clause
Lender under a mortgage Correct Ans - Mortgagee
The action of pledging real property as security for a debt Correct Ans -
Hypothecation
A loan with an investor/lender who collects principal and interest payments
and then a percent of the profits when the property is sold. Correct Ans -
Shared Appreciation Loan
Borrower under a mortgage Correct Ans - Mortgagor
A loan that is neither federally insured nor guaranteed - a private sector loan.
Correct Ans - Conventional Loan
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