a home loan for borrowers who fall short of qualifying for a standard (prime) home loan
conforming conventional mortgage
a conventional mortgage that meets the standards required for purchase in the secondary market by Fannie Mae or Freddie Mac
government sponsored enterprise; one of the largest purchasers of residential mortgages in the secondary market
Federal Housing Administration
a gov't sponsored housing finance agency that operates in the primary market by providing a default insurance program, as well as other housing programs and initiatives...
FHA mortgage insurance
gov't sponsored mortgage insurance that protects lenders from any loss after foreclosure and conveyance of title to the property to the US Dept Housing and Urban Development (HUD). Insurance premium is paid by the mortgage borrower
a gov't-sponsored enterprise and along with FM, one of the largest purchasers of reisdential mortgages in the secondary market...
home equity loan
loans via second mortgages, used to finance home improvements & other purchases, where homeowners can borrow against the accumulated equity in the home...
an ARM loan with an initial period of fixed interest charges, hence fixed payments, thereafter the interest rate becomes adjustable. The fixed interest rate period typically ranges from 3-10 years...
interest-only amortizing mortgage
a mortgage that is interest only for some years, perhaps ten or fifteen, after which the payment increases to an amount sufficient to fully amortize the loan in the remaining term...
interest-only balloon mortgage
a mortgage loan that is interest only for its full term and then must be refinanced or paid off in full...
nonconforming loans that exceed the maximum loan amount for purchase by Fannie Mae and Freddie Mac. Because these loans cannot be purchased by one of the GSE's, they usually carry a slightly higher interest rate...
maturity imbalance problem
problem faced by banks, thrifts, and other financial institutions in which long-term assets are funded with short-term liabilities...
the many types of residential mortgages offered by originating lenders to residential borrowers. Includes the cost of the various mortgage items, including the contract interest rate and number of upfront discount points and origination fees
nonconforming conventional loan
a conventional loan that does not satisfy one ore more underwriting standards required for purchase in the secondary market by Fannie Mae & Freddie Mac...
an ARM loan that offers the borrower a variety of payment choices
home mortgage that includes funds for items of personal property such as a range, dishwasher, refrigerator, and furnishings...
primary mortgage market
the loan origination market where borrowers and lenders negotiate mortgage terms...
private mortgage insurance
insurance offered by private companies that reimburses the lender for capital losses in the event of default by the borrower
a mortgage where the seller lends all or part of the purchase price of a property to the purchaser, and the loan is secured by a mortgage, created simultaneously with conveyance of ownership...
a mortgage where the lender agrees to pay money to an elderly homeowner, either regularly or occasionally, and to be repaid from the homeowner's equity when he or she sells the home or obtains other financing...
secondary mortgage market
the market where mortgage originators can divest their holdings, and existing mortgages are resold....
the most widely used FHA loan program, covering single-family homes mortgages insured by FHA
loan made to homeowners who do not qualify for standard (prime) home loans.
VA guaranteed loan
a gov't guaranteed loan designed to help veterans obtain home mortgage loans for which they might not otherwise qualify...
affordable housing loan
loans offered to primary mortgage market lenders by Fannie Mae and Freddie Mac exclusively for low and moderate income housedolds
a loan underwriting approach that exploits the combination of automated cyber-technology and the vast lending experience embedded in the giant loan portfolios of Freddie Mac, Fannie Mae, and other large mortgae lenders...
asset pledged as security for a debt, in real estate, property
depository institution that makes short-term loans to businesses for inventory financing and other working capital needs
agencies and private companies that pool mortgages and sell mortgage-backed securities, using the pool of mortgages originated or purchased as the collateral for the mortgage-backed security...
the statistical evaluation of borrower creditworthiness
depository institutions that are restricted by their charters to serving a group of people who can show a common bond such as employees of a corporation
when the growth of deposits in banks and savings associations becomes negative, due to other, more attractive direct investment opportunities
risk of borrowers dropping from the originiation pipeline if mortgage interest rates decline after the loan commitment, but before the closing of the loan
a contract binding a mortgage lender or investor to purchase or fund a loan on predetermined terms at a future date...
housing expense ratio
also known as front-end ratio, a ratio used to assess the ability of a borrower to pay debt; defined as the monthly payment of principal and interest on the loan plus the monthly payments toward property taxes.
all acions and activities associated with administering a mortgage loan, including collection of payments, monitoring insurance and tax obligations, and notification of delinquent borrowers. This function is often provided by an entirely different entity from the one that owns the mortgage...
involved analysis by the lender of the riskiness of the promised mortgage payments. Requires analysis of the potential borower's willingness and ability to make scheduled mortgage payments...
consists of an originating lenders approved, but currently unfunded loan commitments plus loans funded but unsold...
Risk occurring in the time between making a loan commitment and selling the loan. The mortgage banker is exposed to considerable risk during this period...
the monthly payment of principal and interest on a home mortgage loan, plus monthly payments into an escrow account toward annual property taxes AND hazard insurance...
term referring to "qualifying" home mortgages
depository institutions that evolved primarily to collect and invest household savings. Usually the term encompasses (former) savings and loan associations and savings banks, but not credit unions. At one time invested largely in home mortgage loans, and for well over a century, until about 1980, were the backbone of home mortgage finance in the the US
total debt ratio
also known as back-end ratio, one of two common ratios used by mortgage lenders to determine a borrower's ability to repay a debt... defined as PITI PLUS other long-term obligations divided by the borrower's gross monthly income
the license granted by a state for one to own and operate a real estate brokerage business; the most complete type of real estate license...
payment a real estate salesperson receives for services rendered, usually expressed as a percentage of the property sale price and not usually paid until the transaction is closed...
in case the brokerage firm is both a buyer and a seller, the firm sometimes designates one salesperson to serve the buyer and one to serve the seller. The two salespersons are presumed to maintain the privacy and serve the interest of the party they represent. Each of these agents would be known as a ________ __________
a situation in which a person or firm has an agency and fiduciary relationship to both parties- seller and buyer- of a transaction...
exclusive agency listing
agreement between property seller and broker in which seller agrees to pay a commission to the broker if anyone other than the owner finds a buyer, during the period of the agreement
exclusive right of sale listing
agreement between property seller and broker where broker is assured of receiving a commission if the broker or anyone else, including the owner, finds a buyer for the property during the period of agreement...
the special __________ duties and obligations to a principal required of an agent, including complete loyalty, confidentiality, obedience, disclosure, accounting, care, skill, and due dilligence
the agent who is empowered to represent a principal, often a business firm, in its business relationships...
law of agency
the legal rights, duties, and liabilities of principal, agent, and third parties as a result of the agency relationship between them...
an agreement betw. an owner and a real estate broker that obligates the broker to attempt to sell the property under the conditions and terms specified. It obligates the property owner to pay a commission to the broker if the broker is successful...
database service that shares property sales listings by a number of real estate brokers with an agreement as to how costs and commissions are to be shared
type of listing in which sellers specify the amount they will accept from the sale, with brokers keeping all proceeds in excess of that amount...
agreement that provides for the broker to receive a commission if he or she sells the property. No exclusive protection is provided to the broker...
in brokerage, the person giving authority to an agent
an agent to whom a principal has granted authority to handle a specific business transaction or to perform a specific function. Real estate brokers and salespersons (i.e.)...
when the agency role of a broker is extended to one or more additional brokers, who also become a fiduciary of the principal and are empowered to act on his or her behalf. The________ shares any commission with the original broker. This _______ chain can extend through multiple agents in the case of multiple-list services...
a broker who facilitates a real estate transaction but is not an agent of either buyer or seller. Required to deal honestly and fairly with both parties and to exercise skill, care, and dilligence in carrying out his or her duties...
an agent to whom a principal delegates the power to act in all matters that can be delegated in place of the principal...
the transfer of the original leasee's rights under the lease contract to another tenant. The original leesee and the new tenant may coliable if the payments are not made...
event at which possession and title to real estate normally are transferred from seller to buyer...
anything of value to induce another party into a contract...
contract for sale
the legal document between a buyer and seller that states the purchase price and other details of the transaction, and the detailed manner in which ownership rights are to be transferred. Is generally regarded as the most important contract in real estate...
contracts with contingencies
an contract for sale that makes the sale conditional on the buyer's obtaining something such as financing or a favorable engineering report...
a cash deposit by a buyer at the time of the offer to establish credibility of the offer, and to provide recourse to the seller if the buyer reneges...
a full, legal title to real estate, provided the terms and conditions of the document creating it (usually a contract for sale) are fulfilled...
a person or company that performs the closing function for a fee;. " agents collect all needed documents and funds for disbursement at the closing...
ownership of the property; for real estate, a lawful claim, supported by evidence of ownership...
filing of a document with the appropriate public official or office in order to provide constructive notice to the public of a sales transaction or legal contract...
the termination of a contract by cancellation. Under the truth-in-lending act, a borrower's right to cancel loan contract within three days that is secured by his or her principal residence...
a legal action brought in a court of equity, compelling a party defaulting on a contract to carry out the exact requirements of the contract rather than, for example, settling for damages
Private mortgage insurance (PMI) is usually required on _____ loans with loan-to-value ratios greater than _____ percent
The dominant mortgage type originated and kept by most depository institutions
interest only loans
mortgage loan type that has the most default risk, all things being equal
reverse annuity mortgage
A mortgage that is intended to enable older household owner's to "liquify" the equity in their home
A conventional loan that is too large to be purchased by Fannie Mae or Freddie Mac
The maximum loan-to-value ratio for an FHA loan over $50,000 is approximately
The maximum loan-to-value ratio on a VA guaranteed loan is
home equity loans
typically have tax deductible interest charges
net benefit analysis
the best method of determining whether to refinance
level payment home mortgage
Probably the greatest contribution of FHA to home mortgage lending was to establish the use of this type of mortgage
In recent years, the mortgage banking industry has experienced
Currently, which type of financial institution in the primary mortgage market provides the most funds for the residential (owner-occupied) housing market
For all except very high loan-to-value conventional home loans the standard payment ratios for underwriting are __ & __ percent
The most profitable activity of residential mortgage bankers is typically
justifiable subprime borrowers
include borrowers who are: creditworthy but want 100 percent higher LTV loan, credit-impaired, persons with no documentation of their income
The normal securitization channel for jumbo conventional loans is
S&L's, mortgage bankers
The reduced importance of certain institutions in the primary mortgage market has been largely offset by an expanded role for others. Which has diminished and which has expanded?
refers to short-term loans made by commercial banks to mortgage bankers
A salesperson who collects a down payment deposit from a potential buyer must give funds to the ______
related industry designation
One of the most effective ways that salespersons or brokers can distinguish themselves as a preferred agent in a particular specialization of real estate brokerage is to obtain a _______ _________ _________
Real estate salespersons can lose their licenses for _______ trust monies with personal funds
The state real estate commission is responsible for establishing __________ requirements for licensees
providing a service
Real estate brokers are paid commissions primarily for
A real estate broker is what type of agent for his or her principal
unintended dual agency
The sub agency relationship that traditionally has characterized multiple listing services (MLS) has tended to result in the wide-spread danger of
Commission rates charged by real estate brokers are determined by an agreement between the ________ and ________
The broker finds a buyer who is ready, willing, and able to buy on the terms specified in the listing contract
According to most listing contracts, a broker has earned a commission when the broker finds a _______ who is ready, willing, and able to _____ on the terms specified in the listing contract
When contracts for the sale of real property are placed with a disinterested third party for executing and closing, they are said to be placed in
One party trying to perpetrate ______ would be a defect to mutual assent in a contract for the sale of real property
parol evidence rule
Oral evidence in contract disputes is prohibited by the _____ _______ rule
form, blanks, broker
In most straightforward transactions involving houses or other relatively small properties, the contract is a ____ with _____ filled in by the _____
the purpose of a ___________ ____________ is to determine who pays the brokerage commission, allocate expenses and receipts of buyer and seller, prorate expenses between buyer and seller, and account for moneys in a transaction