AHIP 2024 FINAL EXAM 2024-2025, Exams of Nursing

Download AHIP 2024 FINAL EXAM 2024-2025 and more Exams Nursing in PDF only on Docsity! 1 | P a g e REAL ESTATE FINANCE CHAMPION EXAM 2024- 2025 WITH ACTUAL CORRECT QUESTIONS AND VERIFIED DETAILED ANSWERS |FREQUENTLY TESTED QUESTIONS AND SOLUTIONS |ALREADY GRADED A+|NEWEST|GUARANTEED PASS |LATEST UPDATE Which act increase the insurance coverage on all federally insured credit union accounts up to 250,000 Dodd Frank Wall Street reform act Real Estate Owned (REO) Lending institution asset classification for property obtained through a foreclosure Foreclosure Legal procedure whereby the security property may be sold to satisfy the unpaid promissory note Contract for deed A sales contract in which the buyer agrees to make regular payments to seller for equitable title General lien Debt instrument which attaches to all the property of the dead are not exempt from forced sale encumbrance A claim, lien, charge or liability attached to an binding real property Common examples of liens include Mortgages and trust deeds Tax liens Judgments Mechanics and material Manns liens (M&M) 2 | P a g e Specific lien Attaches to one or more specific or named properties (example a mortgage) Voluntary lien One that is freely given usually as collateral for a loan Involuntary Lien One that is placed on the property against the wishes of the property owner (example judgment and tax ) Mortgagor The borrower Mortgagee The lender In title theory states The borrower does not actually keep title to the property during the loan term In a lien theory state The buyer holds the deed to the property during the mortgage term Intermediary theory state Fall somewhere in between the third-party trusty holding the title to the property in trust has the right to foreclose once the buyer defaults A tax lien can be classified as what Involuntary and statutory An Easement for ingress and egress is known as Encumbrance Under a ___________ when the final payment is made to The seller title transferred to the buyer Contract for deed Points Percentages based on the amount of the loan Balloon loan Partially amortized loan with a substantially larger final payment Blanket mortgage 5 | P a g e Excessive Selling lending activity for the purpose of generating fees and commissions Air loan Financing that has been approved based entirely on fabrications including borrowers identities title work paystub's bank statements tax returns and appraisals Cash back at closing Unauthorized funds that are given to the property buyer or one of the real estate professionals at or after the closing of a purchase money mortgage transaction generally involves fraud as lenders do not allow a buyer to receive money at closing Inflated appraisal A property appraisal that intentionally arrives at an opinion of value that is higher than the actual value of the property commonly used in mortgage fraud schemes Affinity fraud investment scams that prey upon members of identifiable groups, such as religious or ethnic communities, the elderly, or professional groups Silent second A second position mortgage that is not disclosed to the senior lender in which is not recorded until after the first position mortgage has been recorded Participation agreements Two or more Lenders own a share or interest of a loan made to a debtor this allows the lenders to share or distribute the risk Interim interest Per diem interest Charged to the borrower from the day of closing through the end of the month is called what? How long does a fixed rate mortgage stay fixed for? The entire term of the loan Disadvantages of adjustable rate mortgages Increased monthly payments The inability to refinance early Borrower confusion Hire long-term costs Entitlement The size of loan a veteran may receive determined by term of service Back Ratio 6 | P a g e The ratio of the borrowers total reoccurring monthly debts Native American direct loan Direct loans for construction or improvement on Federal trust land Annual premium Insurance cost based on the loan to value ratio Serviceman's readjustment act Commonly known as the G.I. Bill of rights Government loans are divided into three categories FHA VA USDA Federal housing administration FHA Established in 1934 to improve the construction and financing of housing Upfront Mortgage Insurance Premium (UFMIP) A mortgage insurance premium paid at closing or added to the load at funding Following borrowers are eligible US citizens residing within the US US Permanent resident aliens Non-permanent resident aliens All must have valid sssn Tenure Equal monthly payments as long as at least one bar our lives and continues to occupy the property as a principal residence Term Equal monthly payments for a fixed period of months selected Line of credit Unscheduled payments or installments at times and in an amount of your choosing until the line of credit is exhausted Modified tenure Combination of line of credit and scheduled monthly payments for as long as you remain in the Modified term 7 | P a g e Combination of line of credit plus monthly payments for a fixed period of months selected by the borrower Residual income The amount of money that is left over each month after all of the borrowers major expenses are paid SAH specially adapted housing Help veterans with certain service-connected disabilities adapt or purchase a home To accommodate the disability What loan Was developed by HUD for the rehabilitation and repair of single-family properties 203 (K) When was the Servicemen's readjustment act also known as G.I. Bill signed into law 1944 Who was the bill or rights act/ servicemen's readjustment act signed by President Franklin FHA borrowers Can use a gift fund from who has a down payment Parent Cash- out refinancing loan Guaranteed by the VA which refinances any type of lien against a secured property Verification of Deposit (VOD) Form lenders use to obtain borrower balance information Front ratio Ratio of proposed loan payment to GMI Depreciation The reduction in value of property from deterioration or Obsolescence Loan estimate Form which replaces the good faith estimate Market value The most probable price a property should bring on the open market Pre-qualification and pre-approval letters are prepared on standard promulgated forms by? Texas department of savings and mortgage lending 10 | P a g e Also known as a statutory foreclosure Recasting The re-amortizing of a mortgage Default Breach or non-performance of the terms of a note or covenants of a mortgage Deficiency judgement The unpaid of a foreclosure mortgage, payable by court order Foreclosure Legal procedure by which secured property may be sold to satisfy an unpaid note Default related services Property inspections Property preservation services Foreclosure costs Home affordable foreclosure alternative (HAFA) Design for borrowers who cannot afford their current mortgage and have a pressing need to transition to more inexpensive housing Deed in Lieu of Foreclosure A mortgage modification option in which a borrower voluntarily deeds their collateral property in exchange for a release from all obligations under the mortgage In order to qualify for the streamlined modification program borrowers must have missed how many or more monthly payments on loans originated before 2008 3 Loan processing The process of collecting information about a borrower in order to build a loan file that will be used to make an underwriting decision Underwriting The process of evaluating a borrowers loan application to determine the risk involved for the lender Funding The process of transferring funds to a title or escrow company for disbursement Servicing 11 | P a g e Sending monthly payment statements and collecting monthly payments maintaining payment records and following up on delinquencies Origination The process of creating a new mortgage loan Residential mortgages are divided into two broad categories Conventional loans and governmental loans Governmental loans include FHA, VA, USDA Loans that are not sold in the secondary market are called Portfolio loans because the lender holds the loan and his or her investment portfolio Conventional conforming loans Conventional loans that meet the standards of Fannie Mae and Freddie Mac Four C's of good lending Character capacity capital and collateral Character Is the measure of the willingness of a borrower to make on-time payments Capacity Is a measure of the borrowers ability to repay the debt and is demonstrated through current earnings and job stability Capital The sum of all assets that the borrower has accumulated savings accounts investments and other assets demonstrate a level of financial responsibility Collateral Something of value that can be pledged as security for repayment of the loan One point discount Is one percent of the loan amount and is an upfront payment of interest paid by borrowers do to reduce the interest rate on the loan Mortgage broker Middleman between the borrower and the lender negotiating selling or arranging loans to be delivered to larger investors 12 | P a g e Mortgage banker Provide their own funds for the purpose of providing mortgage financing as opposed to commercial banks savings associations Correspondent lender Usually smaller in scale than mortgage bankers or brokers, these lenders typically extend loans with their own funds, at their own risk. Funding The process of transferring funds to a title or escrow company for disbursement Supply and demand The primary determinants of real estate values Supply can be restricted by a number of factors Land cost, construction, taxation, economics And local government building codes Land cost, construction, taxation, economics And local government building codes The demand for real estate is affected by Growth in employment, transportation systems, personal preference, the availability of credit, and federal government policy What is the single most important determinant of value in residential real estate The size of the employment market What did President Bush signed into law on July 30, 2008 The housing and economic recovery act of 2008 SAFE Act Designed to enhance consumer protection and reduce fraud by encouraging states to establish minimum standards for the licensing and registration of state license mortgage loan originators Who funds the FHA It funds itself When was the FHA (federal housing administration) created? 1934 How long is the lifespan of a $20 bill Less than 10 years What is the prime rate 15 | P a g e Preserves and promote public confidence in the US financial system by ensuring deposits in banks and thrift institutions for up to 250,000 Since created in 1933 no deposit or has lost a single cent of insured funds as a result of a failure Federal home loan Bank's A system of regional banks from which local lending institutions everywhere in America borrow funds to finance housing and economic development infrastructure and jobs Through which Avenue does the US treasury promote economic growth Policies that support job creation What does Department of treasury do Enforce federal finance and tax laws Currency and coinage Supervising national banks and thrift institutions According to the taxpayer bill of rights taxpayers have the right to Pay no more than the correct amount of tax Be informed Privacy When was HARP introduced? 2009 Which refinancing option does HARP offer? Change from an adjustable to a fixed rate mortgage Lower interest rates Shorter term loans Fiat money Currency that is not backed by any precious metals Add the treasury level funds can be raised to pay for government spending by increasing what? Borrowing and raising taxes The interest rate a reserve bank charges edible financial institutions to borrow funds on a short-term basis Discount rate Redlining The practice of refusing to provide financing in a particular area because of location SML 16 | P a g e Responsible for the chartering regulation and supervision of Texas thrift industry TDHCA (Texas Department of Housing and Community Affairs) Responsible for the Regulation of the Texas manufactured housing industry SAFE Act Designed to enhance consumer protection and reduce fraud RMLO The industry term for residential loan originators as mandated by the safe act Created as part of Lyndon B Johnson warrant poverty Department of housing and urban development (HUD) Community development block Grants (CDBG) To help communities with economic development job opportunities in a housing rehabilitation Interstate Land Sales Full Disclosure Act Was passed by Congress in 1968 to protect consumers from fraud in the sale or lease of land Loan officer Used by mortgage brokers bankers and correspondent lenders Consumer financial protection bureau Has the authority to examine and enforce consumer protection regulations for all mortgage related businesses large non-bank financial companies and banks and credit unions with assets greater than 10 billion Community reinvestment act Was passed to ensure that banks would serve the needs of the community in which they were charted to do business prohibits red lining Equal Credit Opportunity Act (ECOA) Originally passed in 1974 ensures that all consumers are given an equal chance to obtain credit Truth in Lending Act (TILA) Designed to protect consumers in credit transactions by requiring clear disclosure of key terms of lending arrangements and all associated costs Home Mortgage Disclosure Act (HMDA) To provide the public with information that will help show whether financial institutions are serving the house in credit needs of their neighborhoods and communities and the aid public officials and targeting public investments from the private sector two areas where they are needed 17 | P a g e Fair Credit Reporting Act (FCRA) Designed to protect consumers against unfair credit reporting practices and protect credit privacy. To assure the consumer that these agencies are fair and accurate and exhibit confidentiality in their credit reporting methods Fair and accurate credit transaction act (FACTA) Intending to primarily help consumers fight the growing crime of identity theft Administrative procedures act (APA) 1946 Put into place standardized methods for the proposal of legislation from both executive departments and independent agencies under federal control FSA loan types include Farm ownership loans Operating loans Emergency loans Conservation loans Office of consumer credit commissioner Regulates the credit industry and educate consumers and creditors Office of consumer credit commissioner (OCCC) Regulated real estate transactions include Home equity loans Secondary mortgages Home-improvement loans Property tax lien lenders Texas department of savings and mortgage lending(SML) Agency of the state of Texas and is subject to the oversight and under the jurisdiction of the financial commission of Texas Texas reverse mortgage Important financial tool for many older home owners they don't pay for the house anymore instead they get money back Dr. Frank Wall Street Reform and consumer protection act signed into law in 2010 established the Consumer financial protection bureau Real estate transactions regulated by the office of consumer credit commissioner include Home equity loans Home-improvement loans Secondary mortgages 20 | P a g e Mortgage brokers Typically specialized as a middleman between borrowers and lenders Correspondent lender Someone who processes under rights closes and funds their own files in their name and then sells a loan to other mortgage lenders Credit Union Member owned depository institutions REIT Investment vehicle created by Congress in 1960 Primary mortgage market The market where borrowers and mortgage lenders come together to create a negotiate terms of a mortgage transaction Commercial banks Perform a variety of functions from being a depository institution to providing lines of credit and loan products to the communities in which they are chartered Life insurance companies Funded by premiums paid by those insured these funds are reinvested to produce capital Credit unions Not-for-profit organizations that exist to serve their members except deposits and make loans Real estate mortgage trusts (REMT) A special form of REIT that invest in mortgages or mortgage backed securities distributes the bulk of their income to investors as dividends paid from the income on mortgages in the sale of mortgages What is the least common form of mortgage financing? Seller financing Savings and loans Make loans for construction purchase repair or financing of houses and are usually locally owned and privately managed Interim interest or per diem interest Lender charges daily interest to borrower from the day of closing through the end of the month. P&I 21 | P a g e principal and interest PITI Principal, interest, taxes and insurance 1 point = 1% of the loan amount Fixed rate mortgage loan This typical mortgage loan is for a term of 15 or 30 years, with the rate remaining fixed for the entire term of the loan. (This loan is predictable) Adjustable rate mortgage has a interest rate that increase or decreases during the life of the loan. It's fixed for a period of time at the beginning of the loan. Rate changes for an arm( adjustable rate mortgage) are determined by Increases and decreases in a funds index that is not under the control of the lender. index What the lenders uses as an instrument to for measuring changes in interest rates. It is the lenders barometer of change in interest rates. The index and resulting rate move .... Up and down with the fluctuations in the market. Initial Adjustment Cap ARMs that offer a fixed rate period during the first years of the loan usually have an initial rate cap that is higher than the per adjustment cap In many ARMS the interest payment rate may increase as much as _______ higher than the first year take. 6% ADVANTAGES OF ARM MORTGAGE LOANS Lower interest rates, higher loans, falling rates Disadvantages of arm mortgage loans Early re-financing penalty, unpredictable home mortgage payments, long term cost, confusion A fixed rate loan is best for: The borrower remaining in a home long term, adverse to risk, or who believes the mortgage trend is upward., it's predictable 22 | P a g e Rehabilitation loans Buyer obtained financing to purchase the dwelling l, additional financing to do rehab construction, and the permanent mortgage once it's done. Collateral dependent loans (hard money) Asset based financing in which borrower receives funds secured by the value of a parcel of real estate. Hard money loans are made by private investors that have no faith in the borrower. loan-to-value (LTV) ratio Relationship between amount borrowed and appraised value (or sale price) of a property. PMI (Private Mortgage Insurance) Typically required when the loan ltv is greater than 80%. Major loan reforms spearheaded by FHA include: Fully amortized loans, down payment as low as 3.5%, low interest rates, mandatory collection of taxes and hazard insurance premiums in an escrow account, guidelines for borrower qualification FHA (Federal Housing Administration) Mortgage insurance program that protects the lender from loss in the event of default by the borrower by insuring the full amount of the loan. Loans must be in marketable condition (meet guidelines) to qualify for FHA mortgage insurance 203(b) program highlights borrow up to 96.5% ltv, limited lender fees, Program is limited to owner occupants Section 203(k) insuramce Enables homebuyers to finance both purchase of house and cost of rehab in one loan. up-front mortgage insurance premium (UFMIP) a one-time mortgage insurance fee paid at closing on FHA mortgage loans and can be added to the loan even if it causes the loan to be upside down. 1.75% of loan FHA ensured loans have maximum ratios of _______% front ratio and _______% back ratio. Higher ratios may be eligible with compensating factors determined by the underwriter. 31%, 43% secondary market Exists for purchase and sale of existing mortgages. Lenders and investors. Net Yield 25 | P a g e Cash on hand or be from a party related to the transaction. Escrows Required for all transactions regardless of LTV VA loan guarantee A guarantee offered by the U.S. Veterans Administration to lenders who make qualified mortgage loans to eligible veterans of the U.S. armed forces and their unmarried surviving spouses. entitlement of va program a dollar amount tha can be used to buy a house. One at a time. 0% down. Va loan can be used one on a farm residence to be owned and occupied by the veteran as a home. 203(k) Repair and rehabilitation of single family homes All pre-qualification and Pre-Approval Letters Subject to underwriting approval. Actions that will hurt your credit score Closing credit cards, missing payments, moving balances, shopping for credit, opening up numerous cards, borrowing from finance companies. Neutral inquiries Consumer initiated, preapproval, periodic review Hard money loans are made by Private investors generally in local areas. Seller must have own funds for Down payment On loan application one question asked will be Marital status Characteristics of value DUST Demand Utility Scarcity Transferability 26 | P a g e Market Value Most probable price the property will sell for in an arm's-length transaction under normal conditions on the open market chronicological age age defined in years Effective Age The age indicated by a structure's condition and utility. Gross Rent Multiplier (GRM) The figure used as a multiplier of the gross monthly income of a property to produce an estimate of the property's value. A marketing time of over _____months 6 Torrents system legal registration system used to verify ownership of real estate...Texas is not Chain of Title A history of the ownership affecting title to a parcel of land. Title policy will not cover what kind of items Schedule b, certain taxes and assessments, utility easements, liens, exceptions like encroachments collateral something pledged as security for repayment of a loan, to be forfeited in the event of a default. one point discount One percent of loan payed up front A loan with no discount points Par loan Origination The process of making or initiating a new loan. Processing Loan processor builds a file that will be used in underwriting decision. During processing 27 | P a g e Credit reports will be ordered by threee agencies. Exemptions from capital gains $500,000 for Married couple , 250k single encumbrance a claim, charge, or liability that attaches to real estate lien A right given by law to certain creditors to have their debts paid out of the property of a defaulting debtor, usually by means of a court sale. Types of Liens on Real Property general to specific General Lien A lien that attaches to all property owned by an individual. Real and personal. Specific Lien A lien affecting or attaching only to a certain, specific parcel of land or piece of property. examples of encumbrances tax liens, mortgages, easements, encroachments Mortgage package Promissory note and mortgage Common occurs new foreclosure Payment delinquency, don't pay taxes, failure to maintain property, failure to keep insured contract for deed (land contract) Sales contract between buyer and seller Lifting clause A clause which gives the borrower the ability to replace the primary instrument with another without affecting the subordinate instrument's position. Cross-default clause triggers a debt default if the issuer defaults on any of its other debt obligations Mortgage A pledge of real property as security for a debt. 30 | P a g e Amortization The repayment or satisfaction of a debt by installment payments of principal and interest on a regular basis Conventional Loan A loan that is neither federally insured nor guaranteed - a private sector loan Fixed Rate Amortized Loan A loan with equal regular payments of principal and interest until the debt is fully repaid or amortized Bi-weekly Loan A fixed rate amortized loan in which one-half of a monthly payment is made every two weeks resulting in much quicker growth of equity and significant interest savings Term Loan A loan with payments of interest only until the end of the term, when the entire principal is repaid in one lump sum - a zero amortization loan - a straight loan Straight Loan` A loan with payments of interest only until the end of the term, when the entire principal is repaid in one lump sum - a zero amortization loan - a term loan Blanket Loan Several pieces of property secured by a single loan (several lots on one note) Release Clause A clause often found in a blanket loan allowing the borrower to obtain partial releases of specific lots by making required lump sum payments Package Loan A loan secured by real property plus personal property Budget Loan A loan where the monthly payment includes not only principal and interest but taxes and insurance - called the PITI payment PITI Principal, interest, tax, insurance - a common payment for amortized loans. Balloon Loan A partial amortization loan - equal regular payments of principal and interest, but long before the debt is amortized a final payment, substantially larger that the others is required to pay off the debt - the balloon payment 31 | P a g e Participation Loan Two or more lenders own a share - to lessen the lenders' risk; or one lender who collects principal and interest plus a percent of the profits on the investment property. Shared Appreciation Loan A loan with an investor/lender who collects principal and interest payments and then a percent of the profits when the property when the property is sold Open-end Loan A home equity line of credit - similar to a credit card but secured by real property Adjustable Rate Mortgage - ARM A loan with an interest rate tied to a readily available index - the rate will be adjusted periodically causing payment changes Margin On an adjustable rate mortgage the percent added to the index Construction Loan Short term financing with funds advanced periodically during the stages of construction - a term loan. Wraparound Loan A new mortgage on a property is placed in a secondary lien position - it includes both the unpaid balance of the first mortgage plus additional amounts - the first mortgage is not paid off GPM - Graduated Payment Mortgage A loan whose payments start low and raise every year, usually for five years, after which they level off for the remaining term of the loan - can result in negative amortization Negative Amortization An increase in debt due to payments less than the interest owed - can be associated with a graduated payment mortgage Reverse Annuity Mortgage A home equity loan available to homeowners over 62 years of age - the lender makes payments to the borrower based on the equity in their property - the loan comes due upon the sale of the property or the death of the owner Sub-prime Loan A loan with risk based pricing for borrowers with a credit rating the in A minus F range - the interest rate will be one to five percent higher than for a prime borrower Primary Market 32 | P a g e Where consumers go to borrow money - banks, mortgage companies etc Secondary Market Where lenders go to borrow money - Fannie Mae, Ginnie Mae, Freddie Mac Conforming Loan A standardized conventional loan written on uniform documents that meets the purchase requirements of Fannie Mae and Freddie Mac - both loan amount and borrower characteristics must meet the guidelines Non-Conforming Loan A loan unable to be sold to Fannie Mae or Freddie Mac - for example a sub-prime loan Truth in Lending TIL, REG Z, Regulation Z, or the Consumer Credit Protection Act - a law passed to help consumers understand the true cost of borrowing money APR Annual Percentage Rate - a number that tells a borrower the total cost of a loan - not just interest, the sum of all charges associated with the loan Trigger Term An advertising term that tells a buyer financing is available without giving the cost of that financing -it triggers the need to additional information (monthly payment, interest rate, down payment, term, etc.) Equal Credit Opportunity Act ECOA - a law prohibiting discrimination by lenders on the basis of sex, marital status, race religion, age, or participation in public assistance programs Fair Credit Reporting Act FCRA - a law allowing individuals to inspect their credit files, correct errors and attach explanatory statements Community Reinvestment Act A law requiring lenders to meet the needs of the community in which they are chartered to do business Redlining The refusal to lend in a particular geographic area - prohibited by the Community Reinvestment Act Mortgage Broker An individual who brings a borrower and lender together for a fee - an intermediary between the borrower and the lender Mortgage Banker 35 | P a g e All residential mortgage loan originators must now? Be registered with the Nationwide Mortgage Licensing System and Registry (NMLSR). Fiscal policy Relates to federal government spending. Government spending is approved by the U.S. Congress. Federal Fair Housing statutes prohibit housing discrimination based on... Race, color, national origin, sex, religion, families with children, and disabilities. Effective Age The appraiser's estimate of the age of the house based upon its ongoing maintenance and upgrades. A house might have been well maintained and updated over the years; therefore, the appraiser might determine that a 20-year-old house might have an effective age of 10. This moves up and down with fluctuations in financial markets. The index and resulting rate. Loan-to-value ratio The percentage of the lesser of the appraised value or sales price that the lender will lend. In an amortizing loan the monthly payment includes an amount that is applied first to interest that is due, with the remainder of the loan payment being applied to the outstanding loan balance (also known as the principal balance). FHA has had a major influence on real estate financing. Major loan reforms spearheaded by FHA include: Fully-amortized loans, downpayment as low as 3.5% , low interest rates, mandatory collection of taxes and hazard insurance premiums in an escrow account, guidelines for borrower qualification. COLLATERAL-DEPENDENT LOANS (HARD MONEY LOAN) A hard money loan is a specific type of asset-based financing in which a borrower receives funds secured by the value of a parcel of real estate. The lenders bear less risk with FHA because.. FHA will pay a claim to the lender in the event of a homeowner's default. A second mortgage (or second deed of trust) is... An instrument subordinate to the primary mortgage. The money that mortgage companies use to make loans comes from? the sale of bonds, which is considered a business transaction, not a savings account deposit procedure. 36 | P a g e $8,200 x .36 = $2,952 $1,375 = $1,577 The lender files suit with the judicial system, and.. the borrower will receive a note in the mail demanding payment. A deficiency judgment is the difference between what is owed on the mortgage and the price the home sells for at the foreclosure auction. A lien is A right given by law to certain creditors to have debts paid out of the property of a defaulting debtor, usually by means of a court sale. Lenders may also offer the option of recasting, or re-amortizing, a mortgage. This can reduce the borrower's monthly payment, thus making resolving a default situation more manageable. Ad valorem (according to value) taxes are assessed based upon the.. assessed value of the property and the existing tax rate. The assessed value for tax purposes is determined by the taxing authority, and may be well above or below the value based upon a real appraisal. GRM Sales Price / Monthly Rent The return is called a yield and it represents the money earned on an investment. The Texas Department of Housing and Community Affairs (TDHCA) Is an agency responsible for affordable housing, housing related and community service programs, and the regulation of the state's manufactured housing industry. A marketing time of over 6 months may be problematic as it indicates... a slow market that creates a drag on property values In strict foreclosure proceedings The lender files a lawsuit on the homeowner that has defaulted. Municipal bond Government entities regularly sell bonds to fund major capital investments. One advantage of municipal bonds is that the interest paid to investors is not subject to federal income tax, making them appealing 37 | P a g e to investors who need to shelter some income from taxation. Where applicable, municipal bonds may also be exempt from state and local income tax. Freddie Mac A federally chartered corporation established as the Federal Home Loan Mortgage Corporation (FHLMC) in 1970 for the purpose of purchasing mortgages in the secondary market. Initial Adjustment Cap ARMs that offer a fixed-rate period during the first years of the loan usually have an initial rate cap that is higher than the per adjustment cap. Gift funds cannot be... cash on hand or be from a party related to the transaction (i.e. agent, builder, broker, seller). Under the Torrens System a property owner obtains a certificate much like an automobile title that is recorded in the public records The maximum LTV ratio for a FHA-insured loan is 96.5% Unlike banks, credit unions... return surplus income to their members in the form of dividends Loan processing process of collecting information about a borrower to build a loan file used to make underwriting decisions Underwriting process of evaluating a borrower's loan application to determine the risk involved for lender Funding process of transferring funds to title or escrow company for disbursement Servicing Sending monthly payment statements and collecting monthly payments, maintaining payment records and following up on delinquencies Origination The process of creating a new mortgage loan Pre-qualification/Pre-approval 40 | P a g e recent innovation is the creation of fiat money, which is currency that is not backed by any precious metals at all. ultimate statement of faith because it has no intrinsic value. At the treasury level, funds can be raised to pay for government spending by increasing borrowing and raising taxes The ________ is the interest rate a reserve bank charges eligible financial institutions to borrow funds on a short-term basis. discount rate Money has immediate purchase power M1 sum of currency held by the public and transaction deposits at depository institutions (which are financial institutions that obtain their funds mainly through deposits from the public, such as commercial banks, savings and loan associations, savings banks, and credit unions). M2 M1 plus savings deposits, small-denomination time deposits (those issued in amounts of less than $100,000), and retail money market mutual fund shares. Fed uses three primary monetary policy tools to influence cost and availability of credit 1. Open market operations 2. The discount rate 3. Reserve requirements Excess of money supply in the market monetary inflation how many federal home loan banks in the US? twelve when cost of production and services increases, causing manufacture prices to increase its called? who charters, regulates, and supervises all national banks and federal savings associations? OCC FDIC insurance limit for deposit $250K Federal reserve system classic example of compromise—a decentralized central bank that balanced the competing interests of private banks and populist sentiment; 1913 by Woodrow Wilson 41 | P a g e U.S. Treasury primarily responsible for raising funds to finance the operations of the US Government. IRS (Internal Revenue Service) a bureau of the Department of Treasury that is tasked with the enforcement of income tax laws and oversees the collection of federal income taxes. Troubled Asset Relief Program (TARP) In September 2008, our nation was on the edge of falling into a second Great Depression; created to restore the nation's financial stability and restart economic growth Office of the Comptroller of the Currency (OCC) charters, regulates, and supervises all national banks and federal savings associations as well as federal branches and agencies of foreign banks. monetary policy Policy that deals with interest rates and the supply of money in the US economy. fiscal policy Relates to federal government spending open-market operations Buying or selling government securities by the Federal Reserve. U.S. Mint primary mission is to serve American people by manufacturing, distributing, and circulating precious metal coins, collectible coins and national medals. statutory authority The IRS is organized to carry out the responsibilities of the Secretary of the Treasury under section 7801 of the Internal Revenue Code. The Secretary has full authority to administer and enforce the internal revenue laws and has the power to create an agency to enforce these laws. The IRS was created based on this legislative grant. Federal Home Loan Bank System (FHLB) 42 | P a g e system of regional banks from which local lending institutions everywhere in America borrow funds to finance housing, economic development, infrastructure and jobs. Federal Deposit Insurance Corporation (FDIC) Insures deposits in banks and thrift institutions; independent agency of the Federal Government; receives no Congressional appropriations Federal Funds Rate reserve requirements discount rate Set by the board of directors of the Federal Reserve Banks, subject to approval by the Board of Governors The Fed's most flexible and often-used tool of monetary policy is _____________ for buying or selling government securities. open market operations which program is not administered by HUD? CFPB Which transaction is exempt from RESPA? temporary loans under the ______________, the use of certain terms in an advertisement triggers the need for full disclosure of lending terms At least ____% of CDBG funds must be used for activities that benefit low and moderate income persons 70% NOT a Key provisions of FACTA no redlining Income eligibility for the ______ is capped at 115% of the median income of the area which the property is located. USDA Rural housing program Dodd-Frank Wall Street Reform & Consumer Protection Act of 2010 established the consumer financial protection bureau