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