Term
| Who was responsible for privatising Fannie Mae? When? |
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Definition
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Term
| When was Freddie Mac created? Why? |
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Definition
| In 1970 as competitor to Fannie Mae |
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Term
| Are FHA, VA and RHS loans conventional mortgages? |
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Definition
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Term
| What are the 2 categories of conventional mortgages? |
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Definition
| Conforming and nonconforming |
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Term
| What's a conforming mortgage? |
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Definition
| Conforms to guidelines of Fannie Mae and Freddie Mac |
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Term
| What's another word for nonconforming loans? |
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Definition
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Term
| When was the FHA created? |
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Definition
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Term
| When did the FHA become part of HUD? |
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Definition
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Term
| What % of loans are FHA insured today? |
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Definition
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Term
| What's the max. ratio of mtg pymt to income? |
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Definition
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Term
| What's the max. ratio of housing costs & recurring debt to income? |
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Definition
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Term
| How many days after the discharge date of a Chapter 7 Bankruptcy will the FHA insure loans? |
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Definition
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Term
| When will the FHA insure loans for borrowers paying on Chapter 13 Bankruptcies? |
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Definition
| If timely payments to the Court for one year are verified and permission of the Court Trustee is granted |
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Term
| Who establishes lending limits for FHA-insured loans? |
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Definition
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Term
| Do the lending limits for FHA-insured loans differ between states and counties? |
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Definition
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Term
| What are allowable closing costs the borrower is allowed to pay? 11 |
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Definition
appraisal and inspection fees
credit report costs
origination fee
deposit verification fees
home inspection service fees up to $200.00
title examination and title insurance costs
doc. prep (by a third party not controlled by the lender)
property survey
attorney’s fees
recording fees
test and certification fees |
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Term
| What percentage of home value does FHA allow borrowers to finance? |
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Definition
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Term
| What percent of income can be spent on housing costs for loans on new construction for FHA loans? |
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Definition
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Term
| In an FHA loan, the seller can contribute up to what percent of purchase price towards closing costs and discount points? |
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Definition
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Term
| Describe the FHA 203(b) Mortgage product |
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Definition
Fixed Rate FHA Mortgage
A fixed rate loan program for qualified borrowers who intend to use the mortgaged property as their primary residence. |
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Term
| Describe FHA 203(k) loan product |
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Definition
Single Family Rehabilitation Mortgage Insurance
A loan product for borrowers who intend to rehabilitate their homes.
The loan may be used for a home already owned by the borrower or to purchase a home in need renovation. |
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Term
| Describe the FHA 251 loan product |
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Definition
Adjustable Rate FHA Mortgage
The interest rate is adjusted annually, and may increase or decrease during the term of the loan. |
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Term
| Describe the FHA 234(c) loan product |
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Definition
FHA Mortgage for Condominium Units
A loan product for borrowers who are buying a condominium. |
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Term
| Describe FHA 254 loan product |
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Definition
Graduated Payment Mortgage
A mortgage for a borrower with a limited income that is expected to increase substantially within five to ten years |
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Term
| When did the VA begin their loan guaranty program? |
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Definition
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Term
| Veterans who were engaged in active duty during World War II, the Korean War, and the Vietnam War must have served for a total of how many days, to qualify for a VA loan? |
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Definition
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Term
| Veterans of Post-World War II, Post-Korea, and Post-Vietnam must have engaged in how many days of continuous active duty for a VA loan? |
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Definition
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Term
| Veterans who served between September 8, 1980 and August 1, 1990 must complete how many months of continuous active duty? |
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Definition
| 24 months, or the full period (at least 181 days) |
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Term
| Veterans of the Gulf War era, which began on August 2, 1990 and continues into the present, must complete how many months of continuous active duty for a VA loan? |
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Definition
| 24 months of continuous active duty or the full period (at least 90 days) for which they were called to active duty |
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Term
| Veterans in the Reserves must have how many years of service in order to qualify for a VA-guaranteed loan? |
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Definition
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Term
| Spouses of active duty service members who have been missing in action or a prisoner of war qualify for VA loans after how many days? |
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Definition
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Term
| DTI ratio quideline for VA loans |
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Definition
41%
Over 45%, must be approved by the Chief of the VA’s Loan Processing Section
Over 50%, the loan must be approved by the Chief of the Processing Section and the VA’s Loan Guaranty Officer |
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Term
| How are closing costs paid for VA loans? Refis? |
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Definition
| Vets pay in cash, except for refinancing. Refis must be for 90% or less of home value |
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Term
| what's the cap for the amt. lenders loan out for VA loans? |
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Definition
| No more than 4X the $60k limit |
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Term
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Definition
| Yes. No restrictions if closed before 3/1/88. |
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Term
| What's the loan limits for Native American vets? |
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Definition
$80.000.00 or the cost of a home, whichever is less
must pay a funding fee of 1.25% of the loan for new loans, or .5% for refi. |
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Term
| What are the 2 types of construction loans? |
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Definition
Rollover loans
Construction only |
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Term
| What are the 2 ways to withdraw $ for a const. loan? |
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Definition
Draw system, used in most construction loans. Borrower draws funds as needed
Voucher system, borrower submits bills and receipts for payment |
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Term
| What are the 4 caps used in ARMs? |
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Definition
lifetime cap
how much the interest rate can increase or decrease during the life of the loan, usual cap is 5% or 6% above the initial interest rate
interest cap
max. int. rate can change in a specified amt of time
payment cap
Max. amt the payment may change in a specified time
floor rate cap
minimum rate the loan may have |
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Term
| what's the adjustment freq. for most ARMs? |
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Definition
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Term
| How are ARM adjustments made? |
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Definition
| by adding the index and the lender’s margins |
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Term
| What's a Service Release Premium (SRP)? |
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Definition
| Premium which lenders may receive for releasing their right to service a mortgage loan by collecting the mortgage payments |
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Term
| What's a Yield Spread Premium (YSP)? |
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Definition
a payment which a lender issues to a mortgage broker when the broker originates a mortgage loan with an interest rate above the market rate.
often the primary source of compensation for brokers. |
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Term
| What are the 5 lender fees charged for loans? |
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Definition
Doc prep fee
Loan underwriting fee
Tax service fee (making sure property taxes are paid)
Flood Certificate fee
Wire transfer fee at close |
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Term
| What are the 2 broker fees charged? |
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Definition
Origination fee (higher with lower rate, lower with higher rate)
Loan processing fee |
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Term
| What is the current debt to income ratio? |
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Definition
| 28/36. First number is PITI divided by income. 2nd number is PITI plus all other debt, divided by income. |
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Term
| What's the ratio for FHA loans? front/back end |
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Definition
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Term
| When must borrowers purchase PMI? |
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Definition
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Term
| What types of buydowns are there, and what's a buydown? |
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Definition
A buydown lowers the interest rate. A point of buydown is 1% of the loan.
Temporary buydowns lower the rate for a set time.Most common is 2/1, which reduces the rate 2% for 1 year. The next year, it goes up 1% and 1% again the next year.
Permanent buydowns reduce the rate for the life of the loan. |
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Term
| What is the secondary market? When was it created? |
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Definition
It buys loans, pools and securitizes them and sells them as investments on Wall Street.
Fannie Mae started this in 1938 with purchases of FHA-secured loans. |
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Term
| When could Fannie Mae start purchasing non FHA-secured loans? |
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Definition
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Term
| When could Fannie Mae start purchasing ARMs and 2nd mtgs? |
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Definition
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Term
| What entity loosely regulates Fannie Mae? |
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Definition
| OFHEO, an agency within HUD. |
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Term
| What's Ginnie Mae's mission? |
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Definition
To guarantee securities backed by the FHA, VA and RHS loans.
Only handles federally-insured loans.
The only entity that is directly backed by US Govt. |
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Term
| Where do Ginnie Mae's profits go? |
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Definition
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