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Mortgage Lending Industry

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. When the loan is paid down to 78% or 80% of the value of the property at the time the loan was taken






2. 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






3. 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






4. Act of transferring property title from one person to another






5. 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






6. A third party with a power of sale allowing him to foreclose without going to court






7. A loan that has priority over all other unsatisfied mortgages secured by the same property






8. The buyer is entitled to a deed conveying the legal title when the contract is fully paid and performed






9. To collect the loan payments from the borrower






10. A lender that holds - rather than sells - its loans






11. Where mortgages may be sold individually or bundled with other mortgages with similar features into mortgage-backed securities and sold on the equity market






12. A mortgage investor that prices and funds loans applied for through mortgage brokers






13. A fee charged to lenders to compensate for certain loan features that increase the risk






14. 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






15. Decides when the Fed will either buy government securities or sell them.






16. For most mortgages the premium is 2.25% of the loan amount - payable at closing or added to the loan amount and financed - nonrefundable






17. The one who gives the mortgage; i.e. - the borrower or debtor






18. Provides for release of the lien when the borrower pays off the debt






19. A third-party lender provides actual funds for the loan






20. 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






21. 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






22. 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






23. The seller finances the purchase and does not actually give the buyer any cash






24. The lender






25. A lender (e.g. - a bank - savings bank - credit union or mortgage lender) that interacts directly with the borrower and actually makes the loan






26. 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






27. 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






28. 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






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






30. 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






31. An immediate relative - a labor union or employer - a government agency or public entity - a nonprofit charitable organization






32. Total monthly payment doesn't change but the rate applied to principal and interest changes






33. The lender receiving the trust deed






34. The property is pledged as security - or collateral - but the borrower does not actually give up legal title or possession






35. Allows a borrower experiencing temporary financial difficulty to delay his monthly mortgage payments for a short period of time






36. 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






37. 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






38. 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






39. 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






40. 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






41. The lowest rates a lender charges for its best customers






42. 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






43. 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






44. 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






45. The borrower giving a trust deed to the lender






46. Takes or receives mortgage applications - assembles information - and prepares the paperwork and documentation necessary for obtaining a mortgage loan