Exam (elaborations)
Real Estate Finance Champion School
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Real Estate Finance Champion School
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Real Estate Finance Champion SchoolLoan processing Correct Ans - The process of collecting information
about a borrower in order to build a loan file that will be used to make an
underwriting decision
Underwriting Correct Ans - The process of evaluating a borrowers
loan application to determine the risk involved for the lender
Funding Correct Ans - The process of transferring funds to a title or
escrow company for disbursement
Servicing Correct Ans - Sending monthly payment statements and
collecting monthly payments maintaining payment records and following up
on delinquencies
Origination Correct Ans - The process of creating a new mortgage loan
Residential mortgages are divided into two broad categories Correct Ans
- Conventional loans and governmental loans
Governmental loans include Correct Ans - FHA, VA, USDA
Loans that are not sold in the secondary market are called Correct Ans -
Portfolio loans because the lender holds the loan and his or her investment
portfolio
Conventional conforming loans Correct Ans - Conventional loans that
meet the standards of Fannie Mae and Freddie Mac
Four C's of good lending Correct Ans - Character capacity capital and
collateral
Character Correct Ans - Is the measure of the willingness of a
borrower to make on-time payments
Capacity Correct Ans - Is a measure of the borrowers ability to repay
the debt and is demonstrated through current earnings and job stability
,Capital Correct Ans - The sum of all assets that the borrower has
accumulated savings accounts investments and other assets demonstrate a
level of financial responsibility
Collateral Correct Ans - Something of value that can be pledged as
security for repayment of the loan
One point discount Correct Ans - Is one percent of the loan amount
and is an upfront payment of interest paid by borrowers do to reduce the
interest rate on the loan
Mortgage broker Correct Ans - Middleman between the borrower and
the lender negotiating selling or arranging loans to be delivered to larger
investors
Mortgage banker Correct Ans - Provide their own funds for the
purpose of providing mortgage financing as opposed to commercial banks
savings associations
Correspondent lender Correct Ans - Usually smaller in scale than
mortgage bankers or brokers, these lenders typically extend loans with their
own funds, at their own risk.
Funding Correct Ans - The process of transferring funds to a title or
escrow company for disbursement
Supply and demand Correct Ans - The primary determinants of real
estate values
Supply can be restricted by a number of factors Correct Ans - Land
cost, construction, taxation, economics And local government building codes
Land cost, construction, taxation, economics And local government building
codes Correct Ans -
The demand for real estate is affected by Correct Ans - Growth in
employment, transportation systems, personal preference, the availability of
credit, and federal government policy
, What is the single most important determinant of value in residential real
estate Correct Ans - The size of the employment market
What did President Bush signed into law on July 30, 2008 Correct Ans -
The housing and economic recovery act of 2008
SAFE Act Correct Ans - Designed to enhance consumer protection and
reduce fraud by encouraging states to establish minimum standards for the
licensing and registration of state license mortgage loan originators
Who funds the FHA Correct Ans - It funds itself
When was the FHA (federal housing administration) created? Correct Ans
- 1934
How long is the lifespan of a $20 bill Correct Ans - Less than 10 years
What is the prime rate Correct Ans - The interest rate that is
determined by individual banks
Single-family housing direct home loan is also known as Correct Ans -
Section 502 Direct loan program
A loan with no discount points is known as a Correct Ans - Par Loan
Monetary policy Correct Ans - maintenance of stable money supply
that provides for growth in the economy while keeping inflation in check
federal reserve responsibility
Fiscal policy Correct Ans - federal government spending approved by
congress us treasury raises money to support spending decision of congress
Open market operations Correct Ans - Buying or selling government
securities by the federal reserve
Discount rate Correct Ans - Set by the Board of Directors of the federal
reserve banks subject to approval by the board of governors
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