REAL ESTATE FINANCE CHAMPION SCHOOL(RMLO) STUDY GUIDE WITH ALL SOLUTIONS

REAL ESTATE FINANCE CHAMPION
SCHOOL(RMLO) STUDY GUIDE WITH
ALL SOLUTIONS OFFERED




Loan processing - correct answer-The process of collecting information about a
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borrower in order to build a loan file that will be used to make an underwriting
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decision
b




Underwriting - correct answer-The process of evaluating a borrowers loan
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application to determine the risk involved for the lender
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Funding - correct answer-The process of transferring funds to a title or escrow
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company for disbursement
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Servicing - correct answer-Sending monthly payment statements and collecting
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monthly payments maintaining payment records and following up on delinquencies
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Origination - correct answer-The process of creating a new mortgage loan
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Residential mortgages are divided into two broad categories - correct answer-
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Conventional loans and governmental loans
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Governmental loans include - correct answer-FHA, VA, USDA
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Loans that are not sold in the secondary market are called - correct answer-Portfolio
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loans because the lender holds the loan and his or her investment portfolio
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Conventional conforming loans - correct answer-Conventional loans that meet the
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standards of Fannie Mae and Freddie Mac
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,Four C's of good lending - correct answer-Character capacity capital and collateral
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Character - correct answer-Is the measure of the willingness of a borrower to make
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on-time payments
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Capacity - correct answer-Is a measure of the borrowers ability to repay the debt
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and is demonstrated through current earnings and job stability
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Capital - correct answer-The sum of all assets that the borrower has accumulated
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savings accounts investments and other assets demonstrate a level of financial
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responsibility
b




Collateral - correct answer-Something of value that can be pledged as security for
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repayment of the loan
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One point discount - correct answer-Is one percent of the loan amount and is an
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upfront payment of interest paid by borrowers do to reduce the interest rate on the
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loan
b




Mortgage broker - correct answer-Middleman between the borrower and the lender
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negotiating selling or arranging loans to be delivered to larger investors
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Mortgage banker - correct answer-Provide their own funds for the purpose of
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providing mortgage financing as opposed to commercial banks savings associations
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Correspondent lender - correct answer-Usually smaller in scale than mortgage
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bankers or brokers, these lenders typically extend loans with their own funds, at
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their own risk.
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Funding - correct answer-The process of transferring funds to a title or escrow
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company for disbursement
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Supply and demand - correct answer-The primary determinants of real estate values
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Supply can be restricted by a number of factors - correct answer-Land cost,
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construction, taxation, economics And local government building codes
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Land cost, construction, taxation, economics And local government building codes -
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correct answer-
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The demand for real estate is affected by - correct answer-Growth in employment,
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transportation systems, personal preference, the availability of credit, and federal
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government policy
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What is the single most important determinant of value in residential real estate -
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correct answer-The size of the employment market
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What did President Bush signed into law on July 30, 2008 - correct answer-The
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housing and economic recovery act of 2008
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, SAFE Act - correct answer-Designed to enhance consumer protection and reduce
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fraud by encouraging states to establish minimum standards for the licensing and
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registration of state license mortgage loan originators
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Who funds the FHA - correct answer-It funds itself
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When was the FHA (federal housing administration) created? - correct answer-1934
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How long is the lifespan of a $20 bill - correct answer-Less than 10 years
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What is the prime rate - correct answer-The interest rate that is determined by
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individual banks
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Single-family housing direct home loan is also known as - correct answer-Sectionb b b b b b b b b bb b


502 Direct loan program
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A loan with no discount points is known as a - correct answer-Par Loan
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Monetary policy - correct answer-maintenance of stable money supply that provides
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for growth in the economy while keeping inflation in check federal reserve
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responsibility
b




Fiscal policy - correct answer-federal government spending approved by congress
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us treasury raises money to support spending decision of congress
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Open market operations - correct answer-Buying or selling government securities by
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the federal reserve
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Discount rate - correct answer-Set by the Board of Directors of the federal reserve
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banks subject to approval by the board of governors
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Federal deposit insurance Corporation - correct answer-Insures deposits in banks
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and thrift institutions
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M1 - correct answer-Is defined as the sum of currency held by the public and
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transaction deposits at depository institutions
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M2 - correct answer-Is defined as M1 plus savings deposits small denomination
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time deposits in retail money market mutual fund shares
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By 1971 All currency in the United States was converted to - correct answer-Fiat
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money
b




At the treasury level funds can be raised to pay for government spending by -
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bcorrect answer-Raising taxes b b


Increasing borrowing b




Federal reserve - correct answer-The central banking system of the United States
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