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Chapter 6
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Lending Institutions
Institutional and Non-Institutional
Insurance Companies (Institutional)
1. largest supplier of real estate loan.
2. Specialize in large loan (3million +)
3. work through mortgage company (Loan correspondent)
Commercial Bank (Institutional)
Specialty (Construction Loan)
-Interim, short term, 3 month~ 3 years
-Long term; take-out loan
Compensating balance
Federal Credit Union:
1. Greatest share of mortgages (home loan) market
2. Most fund in home loan/mortgage
3. Having greatest percentage of assets in R.E. mortgage
Mortgage companies (Non-Institutional)
deal in mortgage readily saleable in secondary market
Private lenders
largest source of junior mortgage loans (second mortgages funds)
Portfolio risk management includes:
A) Reserves
B) Diversification
C) Liquidation
D) All of the above
all of the above
Secondary mortgage market (Federal Reserve system)
Resale market place for existing loan
Liquidity & market ability of loan
Federal Home Loan Mortgage Corporation (Freddie Mac)
nationwide secondary market for residential conventional loans
Federal national mortgage association
secondary market for FHA and VA guaranteed loans
Government national mortgage association (GNMA - Ginnie Mae)
administer mortgage support programs which could not be carried out in the private market.
Federal Reserve System
tighten available loan funds (Discount points)
Decrease loan activities
"Tight Money" market:
more second trust deed (Inflationary period)
Loan to Value ration
Loan Amount / Appraise Value
1. the lower the ratio, the higher the equity.
2. Conventional loan offer a lower LTV.
Loan Commitment (lender's)
1. Credit history (Fair & Isaac company - FICO score)
2. Borrower's present income
3. Appraisal (property)
4. All of the Above
Construction loan
Interim Loan - short term loan
Take-out loan : Long-term
Debt-Income Ratio
a loan-qualifying tool used by lender
Lenders first line of defense against borrower
Income
Author
Criwolf
ID
215642
Card Set
Chapter 6
Description
chapter 6
Updated
2013-05-02T06:07:28Z
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