Term
| Supply and Demand of Money and Interest Rates |
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Definition
| Inverse relationship. Available mortgage money goes down, mortgage interest rates goes up and vice versa. |
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Term
| Demand for mortgage money is affected by.... |
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Definition
Changes in the number and size of households
Shifts in geographic preference for housholds
Existing inventory of structures
Changes in employment rates and income
Changes in costs of real property services, taxes and maintenance
Changes in construction costs |
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Term
| Selling of US Treasure Bonds affects what... |
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Definition
| Removes funds from the mortgage market resulting in higher interest rates. |
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Term
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Definition
| Consists of 7 member board of governors and 12 reserve banks. |
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Term
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Definition
Conducting nations monetary policy - Actions undertaken to influence availability and cost of money.
Supervising and regualting banking institutions
Maintaining stability of financial system. |
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Term
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Definition
Involve the purchase and sale of US Treasury and Federal Agency Securities.
Sell Securities, pulls money out of circulation which reduces the supply of money. |
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Term
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Definition
The interest rate charged by member banks for borrowing money from the fed.
Increase discount rate, banks pay more for money which increase lending rate, reducing the number of loans. |
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Term
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Definition
Amount of funds that an institution must hold in reserve against deposits.
Increase reserves, immediate impact on availability of funds out for circulation, interst rates increase. |
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Term
| Federal Home Loan Bank System (FHLBS) |
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Definition
| Regulatory agency for nations savings associations. |
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Term
| Office of Thrift Supervision |
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Definition
| Branch of Treasury that replaced the FHLB Board as regulator of the thrift industry. |
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Term
| Federal Housing Finance Board |
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Definition
| Supervises mortgage lending by the 12 regional FHLB's |
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Term
| Federal Deposit Insurance Corporation |
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Definition
Insures deposits in banks and savings associations.
Independent agancy of the government.
Deposits insured to $250000 till 2014 than back to $100000. |
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Term
| Deposit Insurance Fund DIF |
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Definition
| Replaces Bank insurance fund and savings association insurance fund insuring both banks and savings associations. |
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Term
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Definition
Market where securities or goods are actually created.
Commercial Banks and Savings Associations are examples. |
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Term
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Definition
Middleman who brings together borrowers and lenders.
Do not make loans.
Arrange loans.
Earns Loan Origination Fee. |
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Term
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Definition
Person or firm who originates, sells and services loans.
Originate loans and package loans together to sell as a package.
Primarily VA and FHA sold on secondary market. |
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Term
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Definition
| Process whereby financial middlemen consolidate many small savings accounts belonging to individual depositors and invest those funds in large, diversified projects. |
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Term
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Definition
| A disengagement process wehn depositors withdraw money from savings for direct investment in stocks, money market and other securities. |
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Term
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Definition
Chartered by either state or federal government.
Supervised by Comptroler of Currency.
National must have National or NA in name. |
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Term
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Definition
Referred to as Thrifts or Savings Banks.
Chartered by State or Federal.
If Federal, must have Federal or FA in name. |
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Term
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Definition
Originate loans with either their own funds or borrowed capital.
Not financial intermediaries because they do not accept deposits. |
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Term
| Life Insurance Companies (LICs) |
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Definition
Not thrift institutions.
Through mortgage bankers or loan officers, invest in loans secured by large scale commericial and industrial real estate. |
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Term
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Definition
Formerly Farmers Home Administration.
Dept of Agriculture.
Direct loans to farmers, rural residents and communities.
New Loans
Insure Loans
Guarantee Loans |
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Term
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Definition
Home Buyers
Investors
Businesses
Sponsors/Developers |
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Term
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Definition
Commercial Banks
Savings Associations
Mutual Savings Banks
Life Insurance Companies
Rural Housing Service
Mortgage Companies |
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Term
| Secondary Mortgage Market |
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Definition
Fannie Mae
Ginnie Mae
Freddie Mac
Other Entities |
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Term
| Secondary Mortgage Market |
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Definition
Investor market that buys and sells existing mortgages.
Makes primary market mroe efficient by selling loans obtaining funds for additional funds.
Principal source of mortgage capital in US. |
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Term
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Definition
Federal National Mortgage Association
Stock holder owned government regulated corporation.
Does not lend money to homebuyers.
Works with lenders to ensure they do not run out of mortgage funds.
Loans must be Conforming Loans - Meeting Fannie Mae Guidelines. |
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Term
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Definition
| Fannie Mae funds for large builders and real estate companies in amounts of $25 Million or more. |
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Term
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Definition
Securities guaranteed by pools of mortgages.
Issued by Fannie Mae.
Highly Liquid Investments |
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Term
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Definition
Federal Home Loan Mortgage Corporation
Private Stockholder Owned Company.
Regulated by Sec of HUD and Treasury.
Secondary Market for Savings Associations. |
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Term
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Definition
Government National Mortgage Association
Government owned and financed corporation.
Depart of HUD.
Serves as a Guarantor of Mortgage Backed Securities.
In exchange for a fee, Ginnie Mae guarantees the timely payment of principal and interest to investors. |
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Term
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Definition
| Payments of the underlying mortgages(P+I) that are passed throught to the investor. |
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Term
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Definition
Upfront charge imposed to increase the actual yield froma mortgage without showing an increase in the interest rate on the mortgage.
Based on loan amount.
1 Point = 1% |
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Term
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Definition
| Each discount point increased lenders yeild by 1/8%. |
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