Unit 12. Review Questions
Fannie Mae and Freddie Mac are able to replenish their own funds, enabling them to
purchase loans from primary lenders by:
a. borrowing from the Federal Reserve Bank
b. borrowing from each other
c. requesting grant funds through HUD
d. selling mortgage-backed securities - answerd. selling mortgage-backed securities
Lenders may order either a mandatory or standby commitment to sell loans to Fannie
Mae through:
a. the federal open market
b. the stock exchange
c. the free market auction
d. the administered price system - answerd. the administered price system
Which of the following statements regarding Fannie Mae guidelines is TRUE?
a. Loans with a higher than 80% LTV require private mortgage insurance
b. Maximum loan limits are set annually by each individual lender
c. The seller may contribute up to 6% towards borrower's closing costs
d. Homebuyer education and counseling is required of all borrowers - answera. Loans
with a higher than 80% LTV require private mortgage insurance
The BEST description of a nonconforming loan is one that:
a. exceeds loan limits set annually by Fannie Mae and Freddie Mac
b. does not meet Fannie Mae and Freddie Mac qualifying guidelines
c. is restricted to four-family units
d. is limited to low-income housing - answerb. does not meet Fannie Mae and Freddie
Mac qualifying guidelines
Fannie Mae debt-to-income ratios requirement is:
a. 25/30
b. 28/36
c. 20/27
d. 30/40 - answerb. 28/36
Freddie Max was originally chartered to:
a. compete with Fannie Mae
b. provide a secondary market for savings associations
c. purchase government loans
d. provide mortgage loans for qualified applicants - answerb. provide a secondary
market for savings associations
Fannie Mae and Freddie Mac are able to replenish their own funds, enabling them to
purchase loans from primary lenders by:
a. borrowing from the Federal Reserve Bank
b. borrowing from each other
c. requesting grant funds through HUD
d. selling mortgage-backed securities - answerd. selling mortgage-backed securities
Lenders may order either a mandatory or standby commitment to sell loans to Fannie
Mae through:
a. the federal open market
b. the stock exchange
c. the free market auction
d. the administered price system - answerd. the administered price system
Which of the following statements regarding Fannie Mae guidelines is TRUE?
a. Loans with a higher than 80% LTV require private mortgage insurance
b. Maximum loan limits are set annually by each individual lender
c. The seller may contribute up to 6% towards borrower's closing costs
d. Homebuyer education and counseling is required of all borrowers - answera. Loans
with a higher than 80% LTV require private mortgage insurance
The BEST description of a nonconforming loan is one that:
a. exceeds loan limits set annually by Fannie Mae and Freddie Mac
b. does not meet Fannie Mae and Freddie Mac qualifying guidelines
c. is restricted to four-family units
d. is limited to low-income housing - answerb. does not meet Fannie Mae and Freddie
Mac qualifying guidelines
Fannie Mae debt-to-income ratios requirement is:
a. 25/30
b. 28/36
c. 20/27
d. 30/40 - answerb. 28/36
Freddie Max was originally chartered to:
a. compete with Fannie Mae
b. provide a secondary market for savings associations
c. purchase government loans
d. provide mortgage loans for qualified applicants - answerb. provide a secondary
market for savings associations
