Final Exam Review
1. Define financial leverage. - answer Use of borrowed funds
2. What is the right of rescission under Regulation Z? - answer Cancel loan application
within 3 days
3. What is the goal of the neighborhood stabilization program? - answer quire &
Redevelop foreclosure properties
4. What agency regulates Fannie Mae and Freddie Mac? – answer FHFA
5. What is the difference between a mortgage banker and a mortgage broker? - answer
Banker makes the loans
Broker brings the borrower & lender together
6. What is the difference between a specific lien and a general lien? – answer Specifc is
one property
General is all non exepmt property
7. What is the drawback of a loan with a balloon payment? - answerCant usually make
payment; need to refinance
8. What entity administers the Federal Housing Administration? - answerHUD
9. What future impacts might a foreclosure have on a borrower? - answerDamaged
Credit, harder & more expensive to get loans , possible tax consequences
10. The home improvement program offered by the Texas Veterans Land Board is for
up to what dollar amount & what length term? - answer$25,000 For 20 years
$10,000 or less For 10 years
11. What is the primary activity of the Federal Reserve's open market operations? -
answerBuying & selling treasury & other gov securities
12. Define conforming loans. - answerA loan that meets the dollar amount limit set by
Fannie Mae & Freddie Mac guidelines.
13. What are the debt-to-income ratios used by the FHA and the VA? What ratios are
used by Fannie Mae / Freddie Mac for conventional loans? - answerFannie & Freddie-
28%/36%
FHA-31%/43%
1. Define financial leverage. - answer Use of borrowed funds
2. What is the right of rescission under Regulation Z? - answer Cancel loan application
within 3 days
3. What is the goal of the neighborhood stabilization program? - answer quire &
Redevelop foreclosure properties
4. What agency regulates Fannie Mae and Freddie Mac? – answer FHFA
5. What is the difference between a mortgage banker and a mortgage broker? - answer
Banker makes the loans
Broker brings the borrower & lender together
6. What is the difference between a specific lien and a general lien? – answer Specifc is
one property
General is all non exepmt property
7. What is the drawback of a loan with a balloon payment? - answerCant usually make
payment; need to refinance
8. What entity administers the Federal Housing Administration? - answerHUD
9. What future impacts might a foreclosure have on a borrower? - answerDamaged
Credit, harder & more expensive to get loans , possible tax consequences
10. The home improvement program offered by the Texas Veterans Land Board is for
up to what dollar amount & what length term? - answer$25,000 For 20 years
$10,000 or less For 10 years
11. What is the primary activity of the Federal Reserve's open market operations? -
answerBuying & selling treasury & other gov securities
12. Define conforming loans. - answerA loan that meets the dollar amount limit set by
Fannie Mae & Freddie Mac guidelines.
13. What are the debt-to-income ratios used by the FHA and the VA? What ratios are
used by Fannie Mae / Freddie Mac for conventional loans? - answerFannie & Freddie-
28%/36%
FHA-31%/43%
