Term
| Primary Mortgage Market Members |
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Definition
Mortgage companies
Savings and loan associations
commercial banks
mutual savings banks
credit unions
life insurance companies
Individuals (20% of all mortgages) |
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Term
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Definition
| Does not actually lend money, they receive a fee for bringing together borrowers and lenders |
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Term
| What do Mortgage companies do? |
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Definition
they make mortgage loans and then sell the mortgage to a long term invester
For originating the loan the lender receives an origination fee paid for by borrower as part of closing costs
This lender will frequently service the loan for the long term invester and receive a service fee for performing the task |
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Term
| Secondary Mortgage Market |
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Definition
| Nannie Mae, Ginnie Mae, Freddie Mac, and Farmer Mac. They provide an ongoing source of funds to lenders. They also worked to standardize loan documents and forms, loan types and loan approval criteria. |
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Term
| Federal National Mortgage Association |
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Definition
Private, profit-making corporation, chartered by U.S. Congress.
They buy VA guaranteed, and FHA insured and conventional mortgages |
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Term
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Definition
Government National Mortgage Association
Is a federal agency within the US Department of Housing and Urban Development
They underwrite only VA guaranteed, FHA Insured or Farmer's Home Administration mortgages |
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Term
| Federal Home Loan Mortgage Corp. |
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Definition
Also known as The mortgage corporation or Freddie Mac.
It is a private, profit making corporation, chartered by the US Congress. It buys VA guaranteed, FHA insured and conventional mortgages |
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Term
| Federal Agricultural Mortgage Corporation |
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Definition
| Farmer Mac is a federal agency withing the farm credit system. It underwrites only mortgages on agricultural real estate |
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Term
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Definition
the basis for the cost of money.
Supply is a combination of real savings (spending less than earnings) as well as fiat money
Demand is created by the borrowing needs of governments, businesses and individuals |
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Term
| The federal reserve system regulates: |
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Definition
| The reserve requirements of bank as well as the discount rate |
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Term
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Definition
| the portion of the banks' deposits which must be set aside and remain unavailable for loans or any other use |
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Term
| Upward presure on interest rates |
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Definition
| caused by increasing banks' reserve requirements or by increasing the dicount rate |
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Term
| downward pressure on interest rates |
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Definition
| caused by reducing the banks' reserve requirement or by reducing the discount rate |
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Term
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Definition
| The cost to a member bank for borrowing money from the district Federal Reserve Bank |
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Term
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Definition
| money printed by the government |
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Term
| Mortgage loan application requires this information |
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Definition
Income
Debts and other obligations
Assets |
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Term
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Definition
Equal Credit Opportunity Act: a federal law passed in 1974, to ensure that credit is made available with fairness and without discrimination based on:
Race, color, or national origin
Sex
Religion
Age
Marital Status
Receipt of income from public assistance program |
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Term
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Definition
| occurs when a mortgage lender refuses to make loans in a specific area, regardless of the borrower's qualifications or the condition of the property. This is a violation of the Community Reinvestment Act and Title VII of the Federal Civil Rights Act |
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Term
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Definition
| the consumer credit protection act which went into effect in 1969. The purpose of this act is to make sure consumers are informed at to the true cost of lending |
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Term
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Definition
| w/in 2 days after loan application the lender must disclose the dollar amounts of finance charges, loan origination fees, Discount points baid by borrower, the APR,they must receive consumer handbook booklet on ARM loans, when they have the right of recission and they must meet specific advertising requirements |
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Term
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Definition
| The application fee, interest, private mortgage premiums, loan origination fees, and discount points. |
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Term
| Private mortgage insurance premiums |
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Definition
| necessary in conventional mortgage loans where the borrower wants to finance more than 80% of the property's value |
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Term
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Definition
| These fees compensates the lender for expenses and services provided to initiate the loan |
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Term
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Definition
| Paid by borrower. Expressed as a percentage of the borrower's mortgage loan amount, This fee incerases teh effective rate of interest to the lender above the stated interest rate. This does not benefit lender. 0 points is best. |
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Term
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Definition
The annual percentage rate:
This reflects the true cost of borrowing by combining the interest cost with the other financing costs to compute a percentage that reflects teh true cost of borrowing.
It is helpful to the borrower wehn comparing different lenders. It may be rounded to the nearest 1/8% |
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Term
| Who is exempt from truth in lending |
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Definition
Business or commercial credit
Agricultural Credit
Personal Property Credit over $25,000 |
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Term
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Definition
| Right to cancel. In Reg Z if a borrower uses a principle dwelling as collateral for a loan, the borrower has up to 3 days o cancel the transaction. This right of recission does not aply to purchase or construct a principla residence |
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Term
| Advertising requirements of Reg Z |
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Definition
If an ad states the interest rate, the APR must also be stated. The interest rate can't be more conspicuous than the APR.
If an advertisment states the down payment, term, number of payments or the $ amount of fincance charges, then it must also include, cash price or amount of loan, the amount of down payment, the number amount and frequency of payments, the APR and the total of the payments (not required in sale of a dwelling) |
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Term
MATH
Principal X Interest Rate |
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Definition
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Term
MATH
Sale price X loan-to-value ratio |
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Definition
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Term
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Definition
In PA interest is paid in arrears
Ex: June's monthly payment includes April's interest |
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