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Terms Used in the Mortgage Industry

Terms in this set (19)

Subordinate financing relates to:
Second mortgages
A mortgage lender closes a mortgage in their own name, funding the loan through a warehouse line. The lender does not act as a servicer, but sells the servicing rights along with the mortgage asset. When the lender sells the servicing rights in the secondary market, they receive compensation from the purchasing entity. Which of the following terms best describes this compensation?
Service release premium (SRP)
Which of the following incorporates closing costs associated with the loan into the interest rate for comparison and disclosure purposes?
APR
The term "escrow analysis" refers to:
The calculation used to determine how much can be held in an escrow account
If a conventional loan goes into default, is foreclosed upon, and causes the lender to lose money, which of the following would possibly reimburse the lender for the loss?
Mortgage insurance company
Yield spread premiums (YSP) compensate:
A borrower for closing a loan above par
Which of the following statements most accurately describes Freddie Mac?
A publicly-traded private entity which is government sponsored and was created in order to facilitate home ownership
Prepaid finance charges are defined as which of the following?
Finance charges that are paid separately before, at the time of consummation, or withheld from the loan proceeds
Aggregate escrow analysis can best be described as:
A formula which is used to determine whether or not servicers are holding too much money in a borrower's escrow or reserve accounts
Service release premiums (SRP) compensate:
A lender for the transfer of servicing rights
Finance charges which are paid separately before or at the time of closing are considered to be:
Prepaid finance charges
Which of the following occurs in the secondary mortgage market?
Fannie Mae pooling loans for sale on the securities market
Which of the following best describes amortization?
Paying enough principal and interest monthly to pay off the loan by the end of the loan term
The acronym COFI (cost of funds index) can best be described as:
A popular index used for ARMs
Which of the following lists contains terms which are all included in APR calculations?
Origination fee, per-diem interest, tax service fee, and discount points
The term "subordination" refers to:
The process of one lienholder accepting inferior lien priority in favor of another
The term "amortize" refers to which of the following?
The spreading of principal and interest payments over a certain period of time
In a residential mortgage loan transaction, where is any yield spread premium disclosed?
In both the Loan estimate and the closing disclosure
A standard owner's title policy would cover all of the following, except:
-Boundary disputes
-Unfiled mechanics liens
-Previous owners mortgage
-Previous owners judgment lien
Unfiled mechanics liens
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