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