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N7
| Question | Answer |
|---|---|
| FHA insured loans | lender is insured from loss by FHA allows borrower loan with higher LTV ratio and smaller down paym. FHA approved lender makes loan borrower pays MIP mortgage insurance premium appraisal required escape clause 1-4 family unit owner occupied |
| Escape clause | appraisal value must be equal to or greater than purchase price and buyer must see appraisal or back out |
| VA loans | VA guarantees lender against loss on loans to veterans certificate of eligibility no MIP instead VA funding fee appraisal required (CRV) NO DOWN PAYMENT unless price exceeds appraisal |
| Conventional loan | loan made on basis of security/ability of borrow to repay no gov't insurance or guarantee minimum 20% down insured conventional loan |
| Insured Conventional loan | lender is insured against loss. (MI or PMI) mortgage insurance required on loan above 80% of value and allow lenders to lend up to 97% appraised value |
| MGIC | mortgage guarantee insurance corporation. oldest/most private mortgage ins. company |
| Loan fraud | falsifying income/assets. providing gift letters when it was actually a loan. causing lender higher damage then if they knew truth relating to sale. |
| Discount points | amount charged by lender to increase lenders yield. points determined by money market. 1 discount point=1% of loan amount. (1 point = 1/8%) |
| Origination fee | charged by the lender to cover initial cost to originate the loan |
| Loan assumption | buy doesn't originate a new loan, takes over payments/assumes liability on existing loan (promissory note) seller must get written release from lender to terminate liability |
| Novation | lender rewriting terms of existing loan, releasing seller from liability. (written note) |
| reduction certificate/assumption letter | lender to buyer: verify loam amount/terms/when buyer takes over payments |
| Primary mortgage market lenders | originate loans working with borrower (financial intermediaries). credit unions, banks, savings inst. originate oans in primary market and buy loans in secondary market |
| Secondary mortgage market | marketplace where loans originated in prmary market are sold to lenders/investors. frees up lenders funds to originate more loans with. |
| Warehousing | bundling loans for sale |
| Assignment | process of selling loan to another lender |
| Estoppel certificate | executed by borrower stating exact unpaid balance and rate of interest |
| Loan servicing | company who lenders pay |
| FNMA/FHLMC | Fannie Mae/Freddy Mack. set standards for conventional loands and buy them |
| GNMA | Ginnie Mae. Guarantees FHA/VA loans to secondary market buyers. operate aspects of federally assisted low income housing |
Created by:
bronny
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