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NJ Real Estate Exam

Terms in this set (306)

Broker
One who buys and sells for another for a fee.
Broker-Salesperson
A qualified broker who practices real estate in the position of salesperson in another broker's office
bureau of subsidized land sales control
regulations covering out of state properties sold in NJ
continuing education
12 hours required every two years, two of which must be on ethics
NJ Real Estate Commission
Department of Banking and Insurance. 8 members. 5 brokers for at least 10 years, two from general public and one representing the state government
Real estate license act
Title 45 chapter 15
Title 11, chapter 5
NJ real estate license act administrative code
Real estate sales full disclosure act
covers the sales of out of state property in NJ
referral agent
only allowed to refer prospects to a brokers office
referral fee
part of a commission or fee paid to a broker who sends a client
salesperson
works under a sponsoring licensed broker doing business in the name of the broker
branch office
must be under the direct supervisor of a broker or broker salesperson and must have a duplicate license
commingling
brokers are prohibited from mixing their own funds with money in the trust account
duplicate original
multiple original copies for the parties signatures. required for all listing contracts, sales contracts and leases
escrow account
also known as trust account. must be in an authorized financial institution in NJ to be used for depositing all money belonging to other persons
guilty knowledge
knew what was going on and did not attempt to stop it
probation
first step after a complaint against a licensee. fine of up to $5000
suspension
suspend a license fine up to $10,000
revocation
permanently revoke licence. Fine up to $10,000
waiver of broker cooperation
what a seller must sign if they direct the broker not to cooperate with any other brokers
principal
client
agency
a fiduciary relationship that falls within in the requirements of the law of agency
fiduciary relationship
one of trust and confidence in which an agent is responsible for the money and/or property of others. It requires putting the principal's interest above all others, including the broker's own interest.
fiduciary
agent
COALD
Care, obedience, accounting, loyalty, disclosure
general agent
empowered to represent the principal in a broad range of matters (ex: property manager)
universal agent
has authority to represent the principal in all matters that can be delegated (ex: power of attorney)
special agent
authorized to represent that principal in one specific capacity only (most broker relationships)
standard of care
the quality of service a normal person would expect from a broker or salesperson
disclosure
agent's duty to pass on to the principal all the facts and information obtained that could affect the principal's business or decisions, whether or not the client asks
subagent
the salesperson's relationship to the principal as the agent of the broker
independent contractor
pay own taxes, receive no insurance, get nothing from brokerage that could be considered an employee benefit
ready, willing and able buyer
one who is prepared to buy on the seller's terms, is financially capable and is ready to take positive steps towards the consummation of the transaction
procuring cause
the person who brings about a ready, willing and able buyer or brings about a meeting of the minds
meeting of the minds
takes place when the parties are in agreement on price, down payment and financing method
consumer information statement
a form of disclosure to all sellers, buyers, landlords and tenants on the sale of all 1-4 family residential properties or vacant one family lots. Describes the types of business relationships a real estate agent can enter into with a client
dual agency
broker represents both parties in a transaction at the same time
disclosed dual agency
legal as long as consent to dual agency agreement is signed
conflict of interest
conflict between brokers own interest and that of the seller
latent defect
hidden defect not discoverable by ordinary inspection
Megan's Law
requires communities to be alerted to the presence of convicted sexual offenders. Buyers can not get information until the close of the sale
puffing
extravagant statements of opinion
fraudulent misrepresentation
deliberate lie intended to mislead someone
innocent misrepresentation
false statement by someone who believes it to be true and is not expected to have expertise in the subject
negligent misrepresentation
false statements made by someone who should know better
antitrust laws
fdederal and state laws in regard to price fixing and allocation of customers or markets
errors and omissions insurance
malpractice insurance for the real estate industry
off site conditions
not on the property purchased. New construction has 5 days for you to cancel the contract existing properties do not have a similar right of rescission
Civil Rights act of 1866
Prohibits any discrimination based on race and color, no exceptions
Federal Fair Housing Act of 1968
Unlawful to discriminate on the basis of race, color, religion or national origin when selling or leasing residential properties. Certain exemptions apply
Title VIII
The portion of the Civil Rights Act of 1968 in which the Federal Fair Housing act is contained
Redlining
Refusing to make mortgage loans or issue insurance policies in specific geographic areas without regard to the economic qualifications of the applicant
Steering
channeling homeseekers either to or away from a particular area on the basis of race, religion, country of origin or other protected class
Department of Housing and Urban Development (HUD)
Federal agency in which you would file a charge of discrimination
NJ Law Against Discrimination
Passed by the legislature in 1945 and broadened over the years, applies to all real property.
Protected classes
race, creed, color, religion, national origin, ancestry, gender, marital or familial status, lawful source of income, affectional or sexual orientation and mental or physical disibility
Blockbusting
inducing homeowners to sell by making representations regarding the entry or prospective entry of minorities into the neighborhood
Attorney General's Memorandum
notice of anti-discrimination that must be given to the homeowner when the property is listed
Mount Laurel I and II
suit filed by the NAACP against a NJ town for illegal discrimination against low income and moderate income persons through the act of exclusionary zoning. As a result all municipalities must provide a range of housing
reverse discrimination
the result of well meaning quotas intended to preserve racial balance in given areas
testers
undercover volunteers who visit real estate offices to make sure all customers and clients are being treated the same and are being given the same free choice of housing within a given price range
bundle of rights
what you are actually purchasing when you purchase a parcel of real estate: possession, use, enjoyment, exclusion, disposition
devise
leave by wil
land
the surface of the earth, including water and anything attached to it by nature. The minerals and substances below the earth's surface to the center of the earth, and upward to infinity.
parcel
specific tract of land
real estate
land plus all manmade improvements
improvements
buildings erected on land and streets, utilities, sewers and other manufactured additions to the property
corporeal
tangible
incorporeal
intangible (i.e. views or rights)
subsurface rights
aka mineral rights - rights to natural resources lying below the earth's surface. May be owned separately
air rights
the rights to use the air above the land. May be sold or leased independently of the land itself
Littoral rights
rights of landowners bordering on oceans, seas or large lakes
Riparian rights
rights of landowners bordering on rivers, streams and waterways
avulsion
process in which a stream suddenly changes its course
accretion
increase of land cased by the gradual depositing of solid material (alluvion)
alluvion
the gradual depositing of solid material that causes accretion
hereditament
anything that can be inherited
personal property
aka personalty, all property that does not fit into the definition of real property. This property is movable
chattels
tangible personal property
deed
how real property ownership is transferred
bill of sale
how personal property is transferred
emblements
annual crops and garden vegetables. considered personal property
erosion
the gradual wearing away of land by water, wind and general weather conditions
reliction
creation of dry land caused by the gradual withdrawal of water from the land by the lowering of it's surface level
fixture
an article that once was personal property but has now been so attached to land or building that is now considered part of the real estate
trade fixture
an article owned by a tenant and attached to a rented space for use in conducting business
Department of Housing and Urban Development (HUD)
...
estate in land
the amount and kind of ownership interest that a person has in real property. Divided into two types: Freehold estates and leasehold estates
freehold estates
estates of indeterminable lengths, can own for a lifetime or forever. Three types: fee simple, fee determinable and life estates
leasehold estates
involve tenants and are estates for a period of time. Considered to be personal property, not real property
fee simple
highest type of interest in real estate recognized by law. the owner is entitled to all rights in the property
fee determinable
aka conditional free or defeasible fee. estate in land that can terminate on the occurrence or nonoccurrence of a specified event.
remainderman
a third party who would get the property after the death of a life tenant
life estate
limited to the life of a specific person
reversionary interest
an owner's right to regain possession of leased property upon termination of the lease agreement
dower
wife's interest in husband's real estate if purchased before May 28, 1980
curtesy
husband's interest in wife's real estate if purchased before May 28, 1980
encumbrance
claim, lien, charge or liability attached to and binding on real property, it affects or limits its use, value or title
lien
a financial claim against property that provides security for a debt or obligation of the property owner
voluntary lien
created by the property owner (mortgage)
involuntary lien
financial claim against the property that is imposed without the owner's consent (property taxes)
general lien
affects ALL the property someone owns
specific lien
placed on one parcel of real estate only
priority
the order in which liens will be paid, real estate taxes take priority over all others
mortgage lien
voluntary lien on real estate given to a lender by a borrower as security for a mortgage loan
construction lien
placed against real estate by workers who contributed labor or material and have not been paid aka mechanics lien
lis pendens
a notice of possible future legal action against the property. recorded when a suit is filed that could potentially affect title to a specified parcel of real estate
easement
right acquired by one party to use the land of another party for a particular purpose
easement appurtenant
an easement that grants rights to the owner of an adjacent parcel of land
servient estate
the tract over which the easement runs
dominant estate
the tract that benefits from the easement
easement in gross
simple right to use the land of others (power lines, etc)
easement by necessity
if the only access to the parcel is another's
easement by prescription
when someone has used someone's land for a certain period of time as defined by state laws (in NJ 20 years). Claimants use must have been continuous, hostile, adverse to the owner's title, exclusive and without the owner's approval. Must be visible, open and notorious
tacking
successive periods of continuous, uninterrupted occupation by different parties combined to reach the prescriptive period.
party wall
wall of a building that straddles the boundary lines between two owner's lots. Each lot owner owns half of the wall and each has an easement right on the other half of the wall for support of the building
encroachment
illegal extension beyond the land of an owner and covers some land of an adjoining owner
license
permission to enter the land of another for a specific purpose
tenancy in severalty
sole ownership
devisee
person named in a will
tenants in common
2 or more persons own property together. Can sell, convey, mortgage, or transfer the interest without the consent of the co-owners. Passes on to heirs
partition
land divided into separate parcels if one tenant in common wants to dissolve an ownership and the other doesn't.
joint tenancy
two or more owners of a property. Carries with it right of survivorship, can't be devised in will, goes to remaining owners
tenancy by entirety
owned by husband and wife
sole proprietorship
business owned by one individual
partnership
an association of two or more people to carry on a business
general partnership
all partners participate in the business to some extent and may be held personally liable for the business' losses and obligations, beyond the amount of their initial investment
limited partnership
business run by a general partner and limited partners who do not participate in the day to day operation, and who can only be held liable for the amount they invested
corporation
an artificial person or legal entity created under the laws of the state from which it receives its charter
board of directors
manage and operate corporations
limited liability corporation (LLC)
corporation with flexible management structure and tax advantages of partnerships
condominium
form of ownership. Shared housing complex. Deed conveying fee simple ownership of the living unit and a portion of the common elements
cooperative
purchaser receives stock in the corporation and a proprietary lease
homeowners association
writes the bylaws for condominiums
horizontal properties act
NJ law that regulates the creation of condominiums
common elements
shared areas of a condominium (stairwells, elevators, etc)
conversion
when an apartment becomes a condominium
town house
architectural style in which buildings share a party wall
time sharing
own a fraction of a year's ownership or use of a property
right of survivorship
in joint tenancy where the other owners get the share of deceased owners, can't be passed on to heirs
reserves
a substantial fund for payment of future repairs of a cooperative
title
ownership
tax lien
imposed to pay for governmental functions
ad valorem tax
general tax based on the value of the property being taxed
special assessment
special taxes that property owners pay for improvement on the real estate they own - street lighting, alleys, etc
assessed value
the amount that the year;s taxes are based upon
ratable
taxable property in a municipality
full value assessment
assessing real estate at 100% of true market value, almost impossible to attain
revaluation
periodically an outside appraisal company comes and assesses every ratable to bring everyone's assessment up to current value
equalization factor
may be used to raise or lower assessments in a particular district or county. Assessed value is multiplied by it
assessment roll
total assessments of all real estate within the jurisdiction of the taxing body
mill
one one-thousandth of a dollar. $.001
redemption period
time in which a foreclosed owner can regain property
tax foreclosure
can happen when taxes are unpaid six months after the end of the tax year
tax sale
collection of overdue taxes through public auction of property
deed restriction
an imposed restriction in a deed for the purpose of limiting the use of the land by future owners
asbestos
a mineral once used in insulation and other materials that has been linked to respiratory disease
building codes
regulations established by state and local governments setting forth the structural requirements for building
CERCLA
the Comprehensive Environmental Response, Compensation and Liability Act. Federal law administered by the EPA identifies parties responsible for cleaning up hazardous waste sites. AKA Superfund
certificate of compliance
inspectors certificate that the property is fit for human habitance
certificate of occupancy
issued by municipal authority stating that a building complies with building, health and safety codes and may be occupied
condemnation
court action in which government takes private property, exercising the right of eminent domain
eminent domain
the right of government to acquire property for public use through a court action called condemnation. Must receive just compensation
escheat
the reversion of property to the state or county, as provided by state law, when someone dies and there are no heirs or when a property is abandoned
exclusionary zoning
local regulations that discriminate, usually against low income housing
lead based paint
banned since 1978
master plan
a comprehensive pan to guide the long term physical development of a particular area
nonconforming use
a use of property that is permitted to continue after a zoning ordinance prohibiting it has been established for an area
radon
a naturally occurring radioactive gas that is suspected of causing lung cancer
variance
permission gained from zoning authority to build a structure or conduct a use that is expressly prohibited by the current zoning laws
zoning ordinance
an exercise in police power by a municipality to regulate the control and character and use of property
police power
power vested in the state to establish legislation to preserve order, protect the general public health and safety and to promote the general welfare
comparative market analysis
comparison of the prices of recently sold homes that are similar in location, style and amenities. Brokers can provide this, not an appraisal
open listing
seller agrees to pay broker only if they procure a buyer for the property. Seller can enter in to multiple agreements with brokers
exclusive agency listing
only one broker is specifically authorized to act as the exclusive agent of the principal. Seller has no obligation to pay if they find own broker
exclusive right to sell listing
broker is sole agent of the seller and must receive a commission regardless of who sells the property while the listing is in effect
net listing
based on the amount of money the seller will receive after the property is sold. It is illegal in NJ
contract
voluntary agreement between legally competent parties to perform or refrain from performing some legal act, supported by legal consideration
competent parties
over 18 and of sound mind. married persons under 18 are considered adults.
offer and acceptance
mutual assent, means there is a meeting of the minds on each term of the contract
NJ Statute of frauds
all real estate contracts (and leases of over 3 years) must be in writing and signed to be enforceable. Oral contracts are allowed where there is "clear and convincing evidence" that they buyer and seller had agreed orally on the exact real estate to be transferred
consideration
what the parties promise to give or receive from each other. Legal tender, exchange of value or love and affection. In a sales contract, the consideration is the entire purchase price
parol evidence rule
states that written contracts take precedence over oral agreements or promises
express contract
the parties state the terms and show intentions in words, oral or written
implied contract
the agreement of the parties is shown by actions and conduct (i.e. ordering food in restaurant is implied contract that you will pay)
bilateral contract
both parties promise to do something (I will do this, and you will do that)
unilateral contract
one sided agreement where one party makes a promise to induce a second party to do something (I will do this, IF you do that)
executed contract
one in which both parties have fulfilled their promises and thus performed the contract
executory contract
exists when something in contract remains to be done by one or both parties. Real estate contracts are this before final settlement
valid contract
contains all essential elements of a contract and is binding on and enforceable by all parties
void contract
one that has no legal force or effect because it does not meet all legal elements for a contract.
voidable contract
one that seems on the surface to be valid but may be rescinded or disaffirmed by one of the parties (i.e. contract with minor)
unenforceable contract
seems to be valid on the surface but neither party can successfully sue the other to force performance. Valid between the parties (ie drunk when signed - Can choose to go through with transaction, but not legally bound to)
time is of the essence
contract must be performed by a specific time limit, after that it is breach of contract. Must be done by attorneys
assignment
transfer of rights through a contract
novation
substitution of a new contract for an existing agreement
breach of contract
violation of any terms of a contract without legal excuse
specific performance
the action in which a buyer files a court suit to force the seller to perform the contract
liquidated damages
sum agreed upon to serve as compensation if one party defaults
statute of limitations
NJ allows 6 years
rescission
the right to change your mind. Usually 3 days while under attorney review
NJ Planned real estate development full disclosure act
in planned unit developments purchasers have 7 day right of rescission
option
contract in which an owner gives the right to buy or lease the property at a fixed price within a stated period of time. Owner is bound to sell, optionee is not bound to buy
land contract
contract for deed or installment sale contract. Typically a means of seller financing. Seller retains fee ownership and the buyer gets possession and equitable interest in the property. Pays taxes and upkeep.
equitable title
the interest held by a vendee under a land contract or installment contract. The equitable right to obtain absolute ownership to property when legal title is held in another's name
contingency
certain happening without which a contract will not be valid
counteroffer
a new offer made as a reply to an offer received
earnest money
money deposited by a buyer that is applied to the purchase price if the sale is closed
escape clause
protection for seller when the contract is subject to the sale of the buyer's home
lease
transfers the right to possession and use of a property for a specified period of time
demise
transfer of property by lease
estate for years
lease for a definite period of time
periodic estate
automatically renews at end of lease period
tenancy at will
for an indefinite amount of time needs 3 months notice to terminate
tenancy at sufferance
without the landlords consent, lowest estate in the land
leasehold estate
tenants right to occupy land: 4 types estate for years, estate from period to period, estate at will, estate at sufferance
holdover tenancy
whereby a lessee retains possession of a leased property after his/her lease has expired and the landlord, by continuing to collect rent, agrees to the tenants continued occupancy
lessee
tenant
lessor
landlord
implied warranty of habitability
landlord guarantees the property is fit for habilitation and guarantees to make any necessary repairs to common elements
assignment of lease
tenant who transfers entire lease. New tenant has responsibility for payment of lease but old tenant maintains secondary liability
truth in renting
landlords must give a copy to all tenants and post a copy on property. States rights and duties of residential landlords and tenants. Not required for terms of less than one month, one or two family houses or three family if the landlord lives there
ADA
disabled must have full and equal access to facilities and services with reasonably achievable accomodations
constructive eviction
if a landlord fails to provide basic services for habitation, tenant may move out and cease paying rent
suit for possession
aka summary proceeding when a tenant breaches a lease or improperly retains possession of leased premises, landlord can regain possession through this process.
actual eviction
after summary proceeding and suit for possession when a landlord regains possession of a leased property
gross lease
tenant pays rent, landlord pays taxes, insurance, mortgage, repairs (property charges)
net lease
in addition to the rent, tenant pays some or all property charges (usually commercial leases)
triple net lease
tenant pays taxes, insurance and all other expenses except debt services
percentage lease
rental based on a percentage of the gross income received by a tenant doing business on the property
ground lease
owner leases land to a tenant who agrees to erect a building on it.
property manager
someone who preserves the value of an investment property while generating income for the owners
management agreement
creates an agency relationship between the owner and property manager
sublease
to transfer a portion of a lease
mortgage
pledge of real property that serves as collateral for a loan, creates a lien
bond
(aka note) the financing instrument signed by the borrower that states the terms of the loan. It's what makes the borrower personally liable for the entire amount borrowed, and creates the personal obligation
note
(aka bond) the financing instrument signed by the borrower that states the terms of the loan. It's what makes the borrower personally liable for the entire amount borrowed, and creates the personal obligation
mortgagee
lender
mortgagor
borrower
hypothecation
pledging of property as security for payment of a loan without surrendering possession of the property
default
failure to meet any of the obligations in the mortgage document
acceleration clause
if a borrower defaults, the lender has the right to ask for the entire debt to be due. First step to foreclosure
defeasance clause
ensures that when the debt is paid, the mortgagee has no further claim on the property
estoppel certificate
a document in which a borrower certifies the amount they owe on a mortgage loan and the rate of interest. used when mortgage is sold to a new lender
usury
charging an unreasonably high rate of interest
subordination agreement
agreement as to the priority of mortgage liens
satisfaction of mortgage
entered into the public record to show that the mortgage lien has been removed from this property
reduction certificate
when a mortgage is assumed or paid off, borrower requires statement detailing current amount due
alienation clause
provides that on the sale of the property the lender has the choice of either declaring the entire amount due, or permitting the buyer to assume the loan
foreclosure
when a borrower defaults in making payments or fulfilling any of the obligations set forth in the mortgage
sheriff's sale
when house is sold at an auction when foreclosed
sheriff's deed
given 10 days after purchase at sheriff's sale
short sale
lender agrees to accept whatever the house sells for on the open market rather than foreclose
deficiency judgement
if the foreclosure sale doesn't bring enough cash to pay the loan balance, can get a personal judgement against the holder of the note for the unpaid balance
real estate owned (REO)
properties acquired by the lender through foreclosure
Loan to value ratio (LTV)
the amount of a mortgage in relation in value to a home
Federal Housing Administatration (FHA)
operates under HUD and insures loans on real property made by lending institutions. Low down payment and allow for relatives or the seller to furnish some of the cash required at closing
amortized loan
kill off slowly over time
straight (term) loan
periodic payments of interest only, with the principal to be paid in full at the end of the term. Used for home improvements or second mortgage
balloon payment
periodic payments that do not fully amortize the amount of the loan by the time the final payment is due, the final payment is a larger amount than the others
biweekly mortgage
pay every 2 weeks instead of once a month. 26 payments a year, the extra money helps to reduce time on a fixed rate loan
adjustable rate mortgage (ARM)
shift the risk or reward of changing interest rates from the lender to the borrower. The adjustment period is the anniversary on which interest rate adjustments can be made.
index
the interest rate on an ARM may go up or down based upon the key changes in a national indicator. The most common one is the rate on US Treasury Bills
ceiling
the maximum allowable interest rate on an ARM
cap
the loan agreement may set a maximum percentage an interest rate may go up in an adjustment period of an arm. The add'l percentage are either: saved by the lender to use the next time, absorbed by the lender or added to the principal
negative amortization
principal increases instead of decreases
assumable
mortgage transferred to the next owner of the property
interest
charge for the use of someone else's money
amortization schedule
payment schedule showing how much principal and interest is being paid in every payment of a fully amortized loan
tax deduction
homeowners may deduct all property taxes, prepaid interest points and mortgage prepayment penalties
points
prepaid interest paid to compensate for a low interest rate, can be paid by buyer or seller
buydown
lending institutions lower the interest rate in exchange for extra payment of points
PITI
Principal, Interest, Taxes and Insurance - all included in monthly loan payment. Taxes and insurance kept in escrow until needed
budget loan
PITI loan
conventional loan
made between a borrower and lending institution
Private mortgage insurance (PMI)
must get if down payment is less than 20% protects lender from loss in case of foreclosure
broker's price opinion
written estimate that resembles a comparative market analysis. Used to show when payments equal 20% of home price so you can stop paying PMI
FHA 203B
most widely used FHA loan, 1-4 family residences. Single upfront PMI charge paid in cash or added to loan. Allows all or some of down payment to be a gift from relatives
amendatory clause
In all FHA and VA loans, says that if the house appraises for less than the agreed upon sale price, the buyer is not obligated to complete the purchase
VA Mortgage
only owner occupied residences owned or co-owned by the veteran on 1-4 family residences. Guaranteed by the govt but loan is from a local lending institution
certificate of reasonable value (CRV)
a VA appraisal. If property doesn't appraise for purchase price, buyer can get out of the contract
New Jersey Housing and Mortgage Finance Agency (NJHMFA)
offers below market interest loans with low or no down payment to qualified buyers who purchase homes in urban target areas.
target area
urban areas where low cost loans are offered by NJHMFA
purchase money mortgage
a note secured by a mortgage given by a buyer, as a mortgagor, to a seller, as a mortgagee. Also any mortgage for a purpose other than refinancing
reverse mortgage
regular monthly payments are made to the borrower, based on the equity the homeowner has in the property given as security for the loan. Mostly for senior citizens
home equity loan
a form of second mortgage where owners whose property has appreciated in value may borrow up to new loan to value ratios, or establish a line of credit
interim financing
bridge loan or swing loan. Temporary loan, usually interest only to bridge gap between selling of two residences
shared equity mortgage
purchaser receives some financial help in the form of a contribution towards the down payment, a concessionary interest rate or assistance with the monthly payments. The "partner" may be a lending institution, the seller, the government or a relative. Typically the partner receives a share of the profit when the property is sold
package mortgage
includes real estate and all fixtures and appliances on the property (furnished condos)
blanket mortgage
covers more than one parcel of land and is used to finance subdivisions developments
wraparound mortgage
frequently used as a method of refinancing real property or financing the purchase of real property when an existing mortgage is retained.
open end mortgage
used by borrowers to obtain additional funds to improve their property.
construction loan
finance the construction of improvements on real estate
mortgage banker
work for financial institutions and loan money
mortgage broker
licensed intermediaries who bring mortgage bankers and borrowers together. Charge a fee, often of the borrower, for their services
underwriting
when a lender carefully investigates application information
qualifying ratios
percentage of income a borrower is allowed to spend on mortgage payments
primary mortgage market
lenders who supply funds to borrowers and keep the loans or who sell them to investors
secondary mortgage market
loans that are bought and sold, not originated
Fannie Mae
FNMA Privately owned corp that provides a secondary market for mortgage loans. Largest purchaser of mortgages, and sets guidelines. Loans that meet their standards are called conforming loans
Ginnie Mae
Government National Mortgage Association Government corporation that was formed to assist with low income, moderate income and high risk mortages. Guaranteed by the government
Freddie Mac
Federal Home Loan Mortgage Corporation warehouses packages of mortgages
jumbo loan
non conforming loan - larger than Fannie Mae guidelines
portfolio loan
lending institution is planning on keeping it's mortgages rather than selling to the secondary market
regulation Z
Truth in lending act requires that the borrower be fully informed of all finance charges, as well as the annual interest rate, before a transaction is consummated.
triggering terms
if any of them are used in mortgage advertising, three further items of information must be included
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