CHAMPIONS REAL ESTATE FINANCE PAPER EXAM
LATEST QUESTIONS AND ANSWERS SURE A+
✔✔Farm Credit Administration (FCA) - ✔✔Oversight of farmer Mac
✔✔Farmer Mac - ✔✔An agency that operates similarly to Fannie Mae and Freddie, but
for agricultural loans.
✔✔front ratio - ✔✔Is used to qualify a borrower for a loan based upon the proposed
house payment and their gross monthly income.
✔✔back ratio - ✔✔The ratio of the borrower's total recurring
monthly debts
✔✔Conventional Loan - ✔✔Loan made with real estate as security and does not involve
government participation in the form of insuring or guaranteeing the loan
✔✔Portfolio loan - ✔✔Loan not intended for resale on the secondary market
✔✔Primary Mortgage Market - ✔✔where lenders and borrowers come together and
negotiate loan terms
✔✔Savings and loans - ✔✔Locally owned & privately managed
State or federally chartered
Receives individuals savings and uses these funds to make long term amortized loans
to home purchasers
✔✔credit unions - ✔✔not-for-profit banks set up by organizations for their customers to
use and return surplus income to their members in the form of dividends
, ✔✔Real Estate Investment Trust (REIT) - ✔✔Created 1960 with the goal to make it
possible for small investors to invest in larger commercial properties by purchasing
shares in the organizations that owns real estate
✔✔encumbrance - ✔✔A claim, lien, charge, or liability attached to and binding real
property. Place limitations on propert owners
✔✔Liens - ✔✔Right given by law to certain creditors to have debits pains out of the
property of a defaulting debtor usually by means of a court of sale
✔✔Mortgagor - ✔✔Borrower
✔✔Mortgagee - ✔✔Lender
✔✔promissory note/ real-estate lien note - ✔✔Borrowers unconditional promise to repay
✔✔Mortgage - ✔✔Document that pledges the property as security for repayment of the
note recorded I. The county in which the property is located
✔✔Foreclosure - ✔✔Legal procedure whereby the secured property maybe sold to
satisfy unpaid promissory note
✔✔Real Estate Owned (REO) - ✔✔Property acquired by a lending institution through
foreclosure and held in inventory.
✔✔Lifting clause - ✔✔A clause which gives the borrower the ability to replace the
primary instrument with another without affecting the subordinate instrument position
✔✔Cross defaulting clause - ✔✔A clause which states that in the event of a borrower
defaults on the primary instrument the secondary instrument is automatically defaulted
✔✔Lock in clause - ✔✔Condition of a mortgage loan which prohibits pre-payment of the
loan prior to a certain date
✔✔Alienation Clause - ✔✔Due on sale clause states balance is due if sold w/o
mortgagee's approval
✔✔Release Clause
-Defeasance clause - ✔✔may require lender to execute a satisfaction of mortgage if
portion of loan is paid
✔✔Subordination Clause - ✔✔Is a calls in which a holder of a mortgage permits a
subsequent mortgage to take priority
LATEST QUESTIONS AND ANSWERS SURE A+
✔✔Farm Credit Administration (FCA) - ✔✔Oversight of farmer Mac
✔✔Farmer Mac - ✔✔An agency that operates similarly to Fannie Mae and Freddie, but
for agricultural loans.
✔✔front ratio - ✔✔Is used to qualify a borrower for a loan based upon the proposed
house payment and their gross monthly income.
✔✔back ratio - ✔✔The ratio of the borrower's total recurring
monthly debts
✔✔Conventional Loan - ✔✔Loan made with real estate as security and does not involve
government participation in the form of insuring or guaranteeing the loan
✔✔Portfolio loan - ✔✔Loan not intended for resale on the secondary market
✔✔Primary Mortgage Market - ✔✔where lenders and borrowers come together and
negotiate loan terms
✔✔Savings and loans - ✔✔Locally owned & privately managed
State or federally chartered
Receives individuals savings and uses these funds to make long term amortized loans
to home purchasers
✔✔credit unions - ✔✔not-for-profit banks set up by organizations for their customers to
use and return surplus income to their members in the form of dividends
, ✔✔Real Estate Investment Trust (REIT) - ✔✔Created 1960 with the goal to make it
possible for small investors to invest in larger commercial properties by purchasing
shares in the organizations that owns real estate
✔✔encumbrance - ✔✔A claim, lien, charge, or liability attached to and binding real
property. Place limitations on propert owners
✔✔Liens - ✔✔Right given by law to certain creditors to have debits pains out of the
property of a defaulting debtor usually by means of a court of sale
✔✔Mortgagor - ✔✔Borrower
✔✔Mortgagee - ✔✔Lender
✔✔promissory note/ real-estate lien note - ✔✔Borrowers unconditional promise to repay
✔✔Mortgage - ✔✔Document that pledges the property as security for repayment of the
note recorded I. The county in which the property is located
✔✔Foreclosure - ✔✔Legal procedure whereby the secured property maybe sold to
satisfy unpaid promissory note
✔✔Real Estate Owned (REO) - ✔✔Property acquired by a lending institution through
foreclosure and held in inventory.
✔✔Lifting clause - ✔✔A clause which gives the borrower the ability to replace the
primary instrument with another without affecting the subordinate instrument position
✔✔Cross defaulting clause - ✔✔A clause which states that in the event of a borrower
defaults on the primary instrument the secondary instrument is automatically defaulted
✔✔Lock in clause - ✔✔Condition of a mortgage loan which prohibits pre-payment of the
loan prior to a certain date
✔✔Alienation Clause - ✔✔Due on sale clause states balance is due if sold w/o
mortgagee's approval
✔✔Release Clause
-Defeasance clause - ✔✔may require lender to execute a satisfaction of mortgage if
portion of loan is paid
✔✔Subordination Clause - ✔✔Is a calls in which a holder of a mortgage permits a
subsequent mortgage to take priority
