Real Estate Finance champion school test Questions and Correct Solutions 2024/2025

Real Estate Finance champion school test Questions and Correct Solutions 2024 Loan processing - Answer -The process of collecting information about a borrower in order to build a loan file that will be used to make an underwriting decision Underwriting - Answer -The process of evaluating a borrowers loan application to determine the risk involved for the lender Funding - Answer -The process of transferring funds to a title or escrow company for disbursement Servicing - Answer -Sending monthly payment statements and collecting monthly payments maintaining payment records and following up on delinquencies Origination - Answer -The process of creating a new mortgage loan Residential mortgages are divided into two broad categories - Answer -Conventional loans and governmental loans Governmental loans include - Answer -FHA, VA, USDA Loans that are not sold in the secondary market are called - Answer -Portfolio loans because the lender holds the loan and his or her investment portfolio Conventional conforming loans - Answer -Conventional loans that meet the standards of Fannie Mae and Freddie Mac Four C's of good lending - Answer -Character capacity capital and collateral Character - Answer -Is the measure of the willingness of a borrower to make on-time payments Capacity - Answer -Is a measure of the borrowers ability to repay the debt and is demonstrated through current earnings and job stability Capital - Answer -The sum of all assets that the borrower has accumulated savings accounts investments and other assets demonstrate a level of financial responsibility Collateral - Answer -Something of value that can be pledged as security for repayment of the loan One point discount - Answer -Is one percent of the loan amount and is an upfront payment of interest paid by borrowers do to reduce the interest rate on the loan Mortgage broker - Answer -Middleman between the borrower and the lender negotiating selling or arranging loans to be delivered to larger investorsMortgage banker - Answer -Provide their own funds for the purpose of providing mortgage financing as opposed to commercial banks savings associations 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. Funding - Answer -The process of transferring funds to a title or escrow company for disbursement Supply and demand - Answer -The primary determinants of real estate values Supply can be restricted by a number of factors - Answer -Land cost, construction, taxation, economics And local government building codes Land cost, construction, taxation, economics And local government building codes - Answer - The demand for real estate is affected by - Answer -Growth in employment, transportation systems, personal preference, the availability of credit, and federal government policy What is the single most important determinant of value in residential real estate - Answer -The size of the employment market What did President Bush signed into law on July 30, 2008 - Answer -The housing and economic recovery act of 2008 SAFE Act - Answer -Designed to enhance consumer protection and reduce fraud by encouraging states to establish minimum standards for the licensing and registration of state license mortgage loan originators Who funds the FHA - Answer -It funds itself When was the FHA (federal housing administration) created? - Answer -1934 How long is the lifespan of a $20 bill - Answer -Less than 10 years What is the prime rate - Answer -The interest rate that is determined by individual banks Single-family housing direct home loan is also known as - Answer -Section 502 Direct loan program A loan with no discount points is known as a - Answer -Par Loan Monetary policy - Answer -maintenance of stable money supply that provides for growth in the economy while keeping inflation in check federal reserve responsibility Fiscal policy - Answer -federal government spending approved by congress us treasury raises money to support spending decision of congress Open market operations - Answer -Buying or selling government securities by the federal reserveDiscount rate - Answer -Set by the Board of Directors of the federal reserve banks subject to approval by the board of governors Federal deposit insurance Corporation - Answer -Insures deposits in banks and thrift institutions M1 - Answer -Is defined as the sum of currency held by the public and transaction deposits at depository institutions M2 - Answer -Is defined as M1 plus savings deposits small denomination time deposits in retail money market mutual fund shares By 1971 All currency in the United States was converted to - Answer -Fiat money At the treasury level funds can be raised to pay for government spending by - Answer -Raising taxes