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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 buyer is entitled to a deed conveying the legal title when the contract is fully paid and performed
FHA annual mortgage premium and cancellation
prime rates
equitable title
Construction financing
2. For most mortgages the premium is 2.25% of the loan amount - payable at closing or added to the loan amount and financed - nonrefundable
retail lender
FHA upfront mortgage premium
table funding
hypothecation
3. Provides for release of the lien when the borrower pays off the debt
due-on-sale (alienation) clause
defeasance clause
mortgagor
Acceptable gift suppliers
4. 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
conforming conventional loan requirements
FHA acceptable seller contribution
Acceptable gift suppliers
beneficiary
5. 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
primary (first) mortgage
mortgagee
mortgagor
USDA loan features
6. When the loan is paid down to 78% or 80% of the value of the property at the time the loan was taken
wholesale lender
private mortgage insurance payment stoppage
FHA acceptable seller contribution
statutory right of redemption
7. An immediate relative - a labor union or employer - a government agency or public entity - a nonprofit charitable organization
Acceptable gift suppliers
equitable title
hypothecation
due-on-sale (alienation) clause
8. 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
soft money loan
right of reinstatement
loan originator
promissory note information
9. 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
FHA acceptable seller contribution
secondary mortgage market
Acceptable gift suppliers
portfolio lender
10. 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
conveyance
Construction financing
FHA 203b
Acceptable gift suppliers
11. The one who gives the mortgage; i.e. - the borrower or debtor
equitable title
mortgagor
hypothecation
beneficiary
12. 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
statutory right of redemption
promissory note information
private mortgage insurance payment stoppage
budget (PITI) mortgage
13. The property is pledged as security - or collateral - but the borrower does not actually give up legal title or possession
budget (PITI) mortgage
right of reinstatement
wholesale lender
hypothecation
14. 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
USDA loan features
beneficiary
promissory note information
correspondent lender
15. A lender that holds - rather than sells - its loans
portfolio lender
subordination clause specifications
trustee
power-of-sale provision
16. A mortgage investor that prices and funds loans applied for through mortgage brokers
loan originator
wholesale lender
power-of-sale provision
Fed actions against inflation
17. 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
promissory note information
Federal Open Market Committee
table funding
subordination clause specifications
18. 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
statutory right of redemption
primary (first) mortgage
Construction financing
subordination clause specifications
19. 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
Fed actions against inflation
defeasance clause
loan level price adjustment
subordination clause specifications
20. A lender (e.g. - a bank - savings bank - credit union or mortgage lender) that interacts directly with the borrower and actually makes the loan
retail lender
hypothecation
forbearance
prime rates
21. A third-party lender provides actual funds for the loan
level payment mortgage
hard money loan
Acceptable gift suppliers
soft money loan
22. 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
loan originator
grantor (trustor)
FHA upfront mortgage premium
23. A third party with a power of sale allowing him to foreclose without going to court
wholesale lender
hypothecation
conforming conventional loan requirements
trustee
24. The seller finances the purchase and does not actually give the buyer any cash
FHA 203b
soft money loan
FHA annual mortgage premium and cancellation
FHA upfront mortgage premium
25. The lender
Federal Open Market Committee
mortgagee
USDA loan applicant requirements
FHA 203b
26. Act of transferring property title from one person to another
defeasance clause
soft money loan
promissory note information
conveyance
27. A loan that has priority over all other unsatisfied mortgages secured by the same property
primary (first) mortgage
conforming conventional loan requirements
Fed actions against inflation
FHA annual mortgage premium and cancellation
28. 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
table funding
beneficiary
due-on-sale (alienation) clause
forbearance
29. Decides when the Fed will either buy government securities or sell them.
budget (PITI) mortgage
hypothecation
statutory right of redemption
Federal Open Market Committee
30. To collect the loan payments from the borrower
soft money loan
loan level price adjustment
portfolio lender
service (a loan)
31. 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
USDA loan applicant requirements
soft money loan
due-on-sale (alienation) clause
wholesale lender
32. 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
FHA annual mortgage premium and cancellation
USDA loan applicant requirements
VA loan features
secondary mortgage market
33. The borrower giving a trust deed to the lender
trustee
grantor (trustor)
primary (first) mortgage
level payment mortgage
34. 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
equitable title
Federal Open Market Committee
VA loan features
Construction financing
35. 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
mortgagee
mortgagor
wholesale lender
36. 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
subordination clause specifications
FHA 203b
equitable right of redemption
promissory note information
37. A fee charged to lenders to compensate for certain loan features that increase the risk
mortgagor
loan level price adjustment
Fed actions against inflation
level payment mortgage
38. 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
FHA upfront mortgage premium
mortgagee
primary (first) mortgage
39. Total monthly payment doesn't change but the rate applied to principal and interest changes
level payment mortgage
service (a loan)
table funding
grantor (trustor)
40. 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
equitable title
Construction financing
power-of-sale provision
trustee
41. The lowest rates a lender charges for its best customers
prime rates
Fed actions against inflation
correspondent lender
equitable right of redemption
42. The lender receiving the trust deed
soft money loan
beneficiary
Fed actions against inflation
statutory right of redemption
43. Takes or receives mortgage applications - assembles information - and prepares the paperwork and documentation necessary for obtaining a mortgage loan
mortgagor
loan originator
forbearance
trustee
44. Allows a borrower experiencing temporary financial difficulty to delay his monthly mortgage payments for a short period of time
forbearance
FHA upfront mortgage premium
level payment mortgage
hard money loan
45. 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
Construction financing
loan level price adjustment
FHA acceptable seller contribution
power-of-sale provision
46. Where mortgages may be sold individually or bundled with other mortgages with similar features into mortgage-backed securities and sold on the equity market
conforming conventional loan requirements
secondary mortgage market
VA loan features
hypothecation