Mortgage Markets Quiz Ch. 7
Terms in this set (11)
pass through securities
mortgage backed securities that "pass through" promised payments of principal and interest on pools of mortgages created by financial institutions to secondary market participants holding interest in the pools
We've encountered so-called "subprime" loans, which have been especially newsworthy over the last year or two. These are:
loans to higher-risk borrowers
A/an ________________ can be viewed as a multi-class pass-through security, arising when mortgage loans are securitized.
collateralized mortgage obligation
Julie is applying for a home mortgage loan of $190,000. The quoted interest rate is 9.0%. Julie will make equal monthly payments, to pay off the loan over 30 years. The monthly payment amount is _________. (nearest dollar)
"Freddie Mac" and "Fannie Mae" are important institutions that came up in connection with:
securitization of mortgage loans.
If a mortgage loan is called "conventional," this means that the loan:
is not a VA or FHA mortgage
Over recent years, many home mortgages have been ______________. This means that the mortgage loans are pooled, and bonds are issued against the mortgage loan payments represented in the pool
A/an ________________ mortgage is one in which the interest rate is tied to some market interest rate. As the market rate changes, the mortgage interest rate will be re-set; hence, the payment amount can change.
Mortgage fees paid by the homeowner at or prior to closing upon the purchase of a house typically include all but which one of the following
With a fixed rate mortgage the _____ bears the interest rate risk and with an ARM the ______ bears the interest rate risk
Mortgage payments are _____ on a 15 year fixed rate mortgage than on a 30 year fixed rate mortgage, and _____ is paid on a 15 year mortgage than on a 30 year mortgage, ceteris paribus
Higher; less interest