CHAMPIONS REAL ESTATE FINANCE
CERTIFICATION TEST PAPER QUESTIONS
AND SOLUTIONS VERIFIED ANSWERS
●● Package Mortgage
Answer: Includes both real and personal property ( fixtures and
furnishings)
●● Blanket Mortgage
Answer: Covers more than one piece of property.
●● Wraparound Mortgage
Answer: Method of financing which preserves the low, existing interest
rate on the original note.
●● Open-End Mortgage
Answer: Permits additional borrowing on the same note. This is
sometimes called a credit card mortgage or a home equity line of credit -
HELOC.
●● Budget Mortgage
Answer: The monthly house payment includes principal, interest, taxes
and insurance (known as PITI)
,●● Collateral -Dependent Loans
Answer: A hard money loan is a specific type of asset-based financing in
which a borrower receives funds secured by the value of a parcel of real
estate.
●● Character
Answer: Is a measure of the willingness of a borrower to make on-time
payments. Credit character is revealed in the borrower's credit report.
●● Capacity
Answer: Is a measure of the borrower's ability to repay the debt, and is
demonstrated through current earnings and job stability.
●● Capital
Answer: Is the sum of all assets that the borrower has accumulated.
●● Collateral
Answer: Is something of value that can be pledged as security for
repayment.
●● Yield
Answer: Is the return that the investor recieves over the life of the loan.
(Also known as profit)
,●● Originator
Answer: The process of creating a new mortgage loan, including all
steps taken by a lender to attract and qualify a borrower.
●● Mortgage Broker
Answer: Typically functions as a middleman between the borrower and
the lender, negotiating, selling or arranging loans to be delivered to
larger investors. At one time originated up to 80% of all mortgage loans.
(Back on the rise)
●● Mortgage Banker
Answer: Entities which provide their own funds for the purpose of
providing mortgage financing, as opposed to commercial banks/savings
associations. (Held, or "Warehoused")
●● Correspondent Lender
Answer: Usually smaller in scale than mortgage bankers or brokers,
these lenders typically extend loans with their own funds, at their own
risk.
●● Processing
Answer: Once application is complete the file moves into this phase.
, ●● Underwriting
Answer: The detailed process of evaluating a borrower's loan application
to determine the risk involved for the lender.
●● Closing
Answer: The consummation of a real estate transaction in which all
appropriate documents are signed and the proceeds of the mortgage loan
are then disbursed by the lender.
●● Servicing
Answer: Includes collecting monthly payments, maintaining records of
payments and balances, collecting and paying taxes and insurance ( and
managing escrow and impound funds) remitting funds to the note holder,
and following up on delinquencies.
●● Supply and Demand
Answer: an economic concept that states that the price of a good rises
and falls depending on how many people want it and depending on how
much of the good is available.
●● Funding
Answer: The process of transferring funds to a title or escrow company
for disbursement
CERTIFICATION TEST PAPER QUESTIONS
AND SOLUTIONS VERIFIED ANSWERS
●● Package Mortgage
Answer: Includes both real and personal property ( fixtures and
furnishings)
●● Blanket Mortgage
Answer: Covers more than one piece of property.
●● Wraparound Mortgage
Answer: Method of financing which preserves the low, existing interest
rate on the original note.
●● Open-End Mortgage
Answer: Permits additional borrowing on the same note. This is
sometimes called a credit card mortgage or a home equity line of credit -
HELOC.
●● Budget Mortgage
Answer: The monthly house payment includes principal, interest, taxes
and insurance (known as PITI)
,●● Collateral -Dependent Loans
Answer: A hard money loan is a specific type of asset-based financing in
which a borrower receives funds secured by the value of a parcel of real
estate.
●● Character
Answer: Is a measure of the willingness of a borrower to make on-time
payments. Credit character is revealed in the borrower's credit report.
●● Capacity
Answer: Is a measure of the borrower's ability to repay the debt, and is
demonstrated through current earnings and job stability.
●● Capital
Answer: Is the sum of all assets that the borrower has accumulated.
●● Collateral
Answer: Is something of value that can be pledged as security for
repayment.
●● Yield
Answer: Is the return that the investor recieves over the life of the loan.
(Also known as profit)
,●● Originator
Answer: The process of creating a new mortgage loan, including all
steps taken by a lender to attract and qualify a borrower.
●● Mortgage Broker
Answer: Typically functions as a middleman between the borrower and
the lender, negotiating, selling or arranging loans to be delivered to
larger investors. At one time originated up to 80% of all mortgage loans.
(Back on the rise)
●● Mortgage Banker
Answer: Entities which provide their own funds for the purpose of
providing mortgage financing, as opposed to commercial banks/savings
associations. (Held, or "Warehoused")
●● Correspondent Lender
Answer: Usually smaller in scale than mortgage bankers or brokers,
these lenders typically extend loans with their own funds, at their own
risk.
●● Processing
Answer: Once application is complete the file moves into this phase.
, ●● Underwriting
Answer: The detailed process of evaluating a borrower's loan application
to determine the risk involved for the lender.
●● Closing
Answer: The consummation of a real estate transaction in which all
appropriate documents are signed and the proceeds of the mortgage loan
are then disbursed by the lender.
●● Servicing
Answer: Includes collecting monthly payments, maintaining records of
payments and balances, collecting and paying taxes and insurance ( and
managing escrow and impound funds) remitting funds to the note holder,
and following up on delinquencies.
●● Supply and Demand
Answer: an economic concept that states that the price of a good rises
and falls depending on how many people want it and depending on how
much of the good is available.
●● Funding
Answer: The process of transferring funds to a title or escrow company
for disbursement
