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Test your basic knowledge |
Mortgage Lending Industry
Start Test
Study First
Subjects
:
personal-finance
,
industries
Instructions:
Answer 46 questions in 15 minutes.
If you are not ready to take this test, you can
study here
.
Match each statement with the correct term.
Don't refresh. All questions and answers are randomly picked and ordered every time you load a test.
This is a study tool. The 3 wrong answers for each question are randomly chosen from answers to other questions. So, you might find at times the answers obvious, but you will see it re-enforces your understanding as you take the test each time.
1. The payor and payee - the amount owed - the rate of interest - and whether it is fixed or adjustable - the due date(s) for payment - loan terms - Which may include: a prepayment privilege - a prepayment penalty - a lock-in clause - an acceleration cl
correspondent lender
mortgagor
promissory note information
Fed actions against inflation
2. Where mortgages may be sold individually or bundled with other mortgages with similar features into mortgage-backed securities and sold on the equity market
table funding
conveyance
secondary mortgage market
statutory right of redemption
3. An immediate relative - a labor union or employer - a government agency or public entity - a nonprofit charitable organization
due-on-sale (alienation) clause
loan level price adjustment
Acceptable gift suppliers
forbearance
4. Act of transferring property title from one person to another
hard money loan
mortgagor
conveyance
equitable right of redemption
5. Allows a trustee to foreclose and sell the property on behalf of the lender without a court order and issue a trustee's deed conveying title to the purchaser
power-of-sale provision
secondary mortgage market
conveyance
loan originator
6. A defaulted borrower has a period after default to stop a foreclosure by paying all past-due payments and penalties and bringing the loan current - instead of having to pay off the entire debt
prime rates
right of reinstatement
hard money loan
loan level price adjustment
7. Provides for monthly mortgage payments to include an amount equal to 1/12 of the estimated annual property taxes and property insurance premiums - homeowners' association dues and/or special assessments
Home Equity Conversion Mortgage
budget (PITI) mortgage
table funding
equitable right of redemption
8. Up to 6% of the purchase price toward the buyer's actual closing costs - prepaid taxes and insurance - discount points - buydown fees - mortgage insurance premiums - and other financing concessions - but nothing toward the down payment
level payment mortgage
FHA acceptable seller contribution
Construction financing
promissory note information
9. A loan that has priority over all other unsatisfied mortgages secured by the same property
trustee
FHA annual mortgage premium and cancellation
primary (first) mortgage
level payment mortgage
10. Allows a borrower experiencing temporary financial difficulty to delay his monthly mortgage payments for a short period of time
promissory note information
forbearance
wholesale lender
Home Equity Conversion Mortgage
11. Total monthly payment doesn't change but the rate applied to principal and interest changes
level payment mortgage
budget (PITI) mortgage
equitable title
Construction financing
12. A third party with a power of sale allowing him to foreclose without going to court
level payment mortgage
trustee
conveyance
forbearance
13. For most mortgages the premium is 2.25% of the loan amount - payable at closing or added to the loan amount and financed - nonrefundable
FHA upfront mortgage premium
budget (PITI) mortgage
Home Equity Conversion Mortgage
primary (first) mortgage
14. A loan that enables a homeowner age 62 or older to convert some of the equity in his home to cash to pay living expenses
Home Equity Conversion Mortgage
beneficiary
Acceptable gift suppliers
equitable title
15. A lender (e.g. - a bank - savings bank - credit union or mortgage lender) that interacts directly with the borrower and actually makes the loan
Home Equity Conversion Mortgage
USDA loan features
loan originator
retail lender
16. The property is pledged as security - or collateral - but the borrower does not actually give up legal title or possession
table funding
hypothecation
mortgagor
promissory note information
17. When the loan is paid down to 78% or 80% of the value of the property at the time the loan was taken
prime rates
FHA annual mortgage premium and cancellation
private mortgage insurance payment stoppage
loan level price adjustment
18. The one who gives the mortgage; i.e. - the borrower or debtor
mortgagor
hypothecation
private mortgage insurance payment stoppage
forbearance
19. An owner - or other person with an interest in the property may - by paying off the entire debt and court costs - prevent a foreclosure sale
equitable right of redemption
subordination clause specifications
FHA 203b
promissory note information
20. An owner - or other person with an interest in the property may - by paying off the entire debt and court costs - reclaim the property following a foreclosure
wholesale lender
loan originator
statutory right of redemption
private mortgage insurance payment stoppage
21. Helps finance the purchase of a one- to four-unit family home that the borrower intends to occupy as his residence (i.e. - move in within 60 days after closing and stay in the property for 12 months) - using a 15- or 30-year loan and a cash investmen
FHA 203b
budget (PITI) mortgage
equitable right of redemption
right of reinstatement
22. To collect the loan payments from the borrower
subordination clause specifications
service (a loan)
budget (PITI) mortgage
Construction financing
23. Allows the lender to declare the entire balance of the loan due at once; or refuse to allow another person to assume the loan - if the title is transferred
due-on-sale (alienation) clause
conveyance
grantor (trustor)
table funding
24. Takes or receives mortgage applications - assembles information - and prepares the paperwork and documentation necessary for obtaining a mortgage loan
loan originator
secondary mortgage market
portfolio lender
wholesale lender
25. The seller finances the purchase and does not actually give the buyer any cash
soft money loan
retail lender
loan level price adjustment
hypothecation
26. The borrower giving a trust deed to the lender
mortgagor
FHA annual mortgage premium and cancellation
level payment mortgage
grantor (trustor)
27. A fee charged to lenders to compensate for certain loan features that increase the risk
loan level price adjustment
retail lender
defeasance clause
FHA upfront mortgage premium
28. Has lower priority even though it may have had priority based on its date of recording; or will remain subordinate in the event that the first mortgage is refinanced
mortgagor
table funding
loan originator
subordination clause specifications
29. The veteran borrower is charged a nonrefundable upfront funding fee - which can be financed - instead of a mortgage insurance premium - for the guarantee; no down payment up to the Freddie Mac conforming loan limit; seller can pay all of the borrower
FHA acceptable seller contribution
power-of-sale provision
FHA upfront mortgage premium
VA loan features
30. The lender
mortgagee
loan level price adjustment
table funding
primary (first) mortgage
31. The seller contribution up toward the buyer's closing costs can be up to 9% if the LTV is no more than 75% - 6% if the LTV is above 75% and less than 90% - or 3% if the LTV is 90% or higher - the maximum contribution is only 2% if the property is for
promissory note information
conforming conventional loan requirements
FHA annual mortgage premium and cancellation
correspondent lender
32. Can be used to build - repair - rehabilitate - renovate or relocate a primary residence - or to purchase and prepare a site for one - including providing water and sewage facilities; 30-year term - a fixed interest rate set by the lender - no require
USDA loan features
retail lender
conforming conventional loan requirements
beneficiary
33. The lender receiving the trust deed
beneficiary
conforming conventional loan requirements
FHA acceptable seller contribution
due-on-sale (alienation) clause
34. The lowest rates a lender charges for its best customers
USDA loan features
portfolio lender
prime rates
retail lender
35. A mortgage broker will originate - process and close a loan underwritten and funded by a secondary lender in his own name - but then assign the loan to that lender at the closing table
prime rates
defeasance clause
table funding
soft money loan
36. A mortgage investor that prices and funds loans applied for through mortgage brokers
conforming conventional loan requirements
table funding
wholesale lender
FHA annual mortgage premium and cancellation
37. A lender that holds - rather than sells - its loans
portfolio lender
FHA annual mortgage premium and cancellation
conforming conventional loan requirements
Construction financing
38. High-interest interim (or temporary) financing - used to finance the cost of labor and materials used during construction. It extends from start to completion of the work - when it is paid off - often with the proceeds of a more permanent form of fin
Construction financing
conforming conventional loan requirements
loan level price adjustment
primary (first) mortgage
39. Generally a smaller lender that takes applications and underwrites and funds loans either with its own money or from a line of credit with a larger lender and - immediately upon closing - sells the loans to wholesale lenders under previously agreed-u
retail lender
service (a loan)
correspondent lender
secondary mortgage market
40. Must be without adequate housing; cannot qualify for a conventional home loan with private mortgage insurance; must have a steady income of up to 115% of the median income for the area - have a reasonable credit history and be able to afford the mort
equitable title
USDA loan applicant requirements
secondary mortgage market
FHA acceptable seller contribution
41. Provides for release of the lien when the borrower pays off the debt
subordination clause specifications
equitable right of redemption
defeasance clause
beneficiary
42. A third-party lender provides actual funds for the loan
FHA acceptable seller contribution
hard money loan
loan originator
mortgagee
43. Decides when the Fed will either buy government securities or sell them.
conveyance
FHA annual mortgage premium and cancellation
Federal Open Market Committee
secondary mortgage market
44. The buyer is entitled to a deed conveying the legal title when the contract is fully paid and performed
FHA annual mortgage premium and cancellation
equitable title
USDA loan applicant requirements
Fed actions against inflation
45. Raise its asset reserve requirements for members - raise its target for the federal funds rate at Which members borrow from each other - raise the discount rate it charges members to borrow money from the Federal Reserve Bank - sell government securi
defeasance clause
subordination clause specifications
Fed actions against inflation
mortgagor
46. Term LTV Annual MIP Cancellation - > 15 yrs | > 95% | .55% | LTV 78%; payments 5 years - > 15 yrs | < 95% | .50% | LTV 78%; payments 5 years - < 15 yrs | > 90% | .25% | LTV 78% - < 15 yrs | < 90% | None | N/A
budget (PITI) mortgage
FHA annual mortgage premium and cancellation
loan level price adjustment
level payment mortgage