HUD Housing Counselor Study for Exam – JLM Questions and Answers

Front end ratio (parts) - Answer- Monthly Housing Expense / Gross Income Back End Ratio (parts) - Answer- Monthly housing+debt (on credit report - car loan, credit cards & etc) / Gross Income Renter Ratio - Answer- 30% / 36% Conventional Ratio - Answer- 28% / 36% FHA (Federal Housing Administration) Ratio - Answer- 31% / 43% EEM - Energy Efficent Mort - Answer- 33% / 45% VA - Answer- 41% (must include child care with other debts) MIP - Answer- Mortgage Insurance Premium FHA MIP ANNUAL COST - Answer- 0.80% TO 1.05% VA MIP ANNUAL COST - Answer- NONE USDA MIP ANNUAL COST - Answer- 0.50% ANNUAL FEE CONVENTIONAL MIP ANNUAL COST - Answer- 0.50% TO 1.50% Home equity loan - Answer- Think 2nd mortgage - 1 large expense - closing costs HELOC - Answer- Think line of credit - A home equity line of credit, or HELOC, is a line of credit that you can take from at any time during the draw period, up to your credit limit. Typically, the draw period is 10 years and the repayment period lasts 15 years. FHA 203(k) Rehabilitation Loan - Answer- Think 1st mortgage + reno costs - must complete in 6 months - Must use a contractor - must be structural - Stream line FHA 203 (k) - Answer- Think 1st mortgage + reno costs - must complete in a couple of months - Must use a contractor - must be no structural - can't exceed 35k - FHA EEM Mortgage - Answer- Purchase Energy Efficient Home or Reno - Must use a HERS consultant Title 1 loan - Answer- For single unit or up to 5 unit - Repairs up $25,000 Credit Ulitization Ratio - Answer- 30% or lower Tracking Expenses - Answer- -control your expenses by capturing spending -seasonal distribution of expenses -using budget payment plans tracking income - Answer- continuously keeping up with how much money you are earning Maximum Affordable Housing Expense - Answer- Front end ratio x Gross Income Debt to Income ratio - Answer- Car payment + credit cards + other credit report debt + PITIA / Gross income Civil rights act of 1866 - Answer- law that established federal guarantees of civil rights for all citizens Plessy vs. Ferguson - Answer- Separate but equal Home Owners' Loan corporation 1933 - Answer- HOLC as an effort to avoid foreclosures Redlining - Answer- A process by which banks draw lines on a map and refuse to lend money to purchase or improve property within the boundaries. Deed Restrictions 1933 - Answer- Clauses in a deed limiting the future uses of the property. Deed restrictions may impose a vast variety of limitations and conditions—for example, they may limit the density of buildings, dictate the types of structures that can be erected, or prevent buildings from being used for specific purposes or even from being used at all. Shelly v. Kraemer (1948) - Answer- Ruled that restrictive covenants (in buying houses) were illegal Brown v. Board of Education 1954 - Answer- Overrules Plessy v. Ferguson (no stare decisis). Racial segregation violates 14th Amendment Equal Protection Clause ("separate is inherently unequal") Executive Order 11063 - Answer- President John F. Kennedy signed the Executive Order 11063. The order prohibited discrimination in the sale, leasing, rental, or other disposition of properties and facilities owned or operated by federal government or provided federal funds Civil Rights Act of 1964 - Answer- outlawed discrimination based on race, color, religion, sex, or national origin April 4, 1968 - Answer- The date MLK was assassinated Civil Rights Act of 1968 - Answer- Fair Housing Act - banned discrimination in housing Housing and Urban Development Act of 1968 - August 1, 1968 - Answer- Ginnie Mae, with the aim of expanding the availability of government secured home loans to moderate-income families Amendment to Fair Housing Act 1978 and 1988 - Answer- Seven Characteristic - race, color, national orgin, religion, sex, disability, and famillial status LGBT Housing Discrimination - July 1, 2010 - Answer- new policy that provides for lesbian, gay, bisexual, and transgender individuals and families with assistance when facing discrimination. Judical foreclosure - Answer- Foreclosure is lawsuit, Servicer issues a summons, if contested court date is set Non-Judicial Foreclosure - Answer- foreclosure that does not require court proceedings or a judgment of foreclosure - the result of the power of sale clause in a deed of trust notice of default (NOD) - Answer- a document prepared by a trustee at the direction of a lender to begin a non-judicial foreclosure proceeding. After 120 Days delinquency Loss Mitigation Submission Process - Answer- 1. Determine reason 2. Determine if home owner wants to remain 3. Determine the type of mortgage 4. Gather documents 5. Complete forms 6. Submit to servicer 7. Respond to additional requests 8. If request is approved, check for affordability or if denied determine why - escalate if necessary