Term
| What year was the SAFE Act enacted? |
|
Definition
| 2008 (Secure and Fair Enforcement for Mortgage Licensing Act under HERA) |
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|
Term
| What does SAFE Act stand for? |
|
Definition
| Secure And Fair Enforcement for Mortgage Licensing Act. (of 2008 under HERA) |
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Term
| What does HERA stand for? |
|
Definition
| Housing and Economic Recovery Act |
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Term
| Who needs to be licensed under the SAFE Act? (3) |
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Definition
| Mortgage Lenders, Mortgage Brokers, and the MLO's that work for them. |
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Term
| What law requires Mortgage Lenders, Mortgage Brokers, and the MLO's that work for them to be licensed? |
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Definition
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Term
| Who only has to register under the SAFE Act instead of passing the test? |
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Definition
| Deposit taking institutions and their MLO's |
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Term
| True or False? - Deposit taking institutions and their MLO's are required to pass the SAFE Test. |
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Definition
| FALSE. BUT Non deposit taking institutions that arrange mortgages and their MLO's ARE REQUIRED to pass. |
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Term
| Mortgage Lenders ____1_____ loans and Morgage Brokers ____2______ loans. |
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Definition
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Term
| A ____1_____ makes a loan and a ____2____ arranges a loan. |
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Definition
| 1) Mortgage Lender 2) Mortgage Broker |
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Term
| How many hours (minimum) of prelicensing education is required by every state? |
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Definition
|
|
Term
| How many hours of Fed Law prelicensing education is required? |
|
Definition
|
|
Term
| How many hours of Ethics/Fraud prelicensing education is required? |
|
Definition
|
|
Term
| __________ and __________ both require 3 hours each of prelicensing eduction. |
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Definition
|
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Term
| How many hours of prelicensing education is required for non-traditional mortgage products? |
|
Definition
|
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Term
| What are two requirements to be considered a traditional mortgage loan under the SAFE Act? |
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Definition
| Must be a 30 year fixed rate loan. |
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Term
| The SAFE Act requires a loan to be a 30 year fixed rate in order to qualify as a ________. |
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Definition
|
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Term
| How many hours of CE (Continuing Education) are required each year? |
|
Definition
|
|
Term
| How many hours of CE are required for Fed Law each year? |
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Definition
| At least 3 hours of Fed Law education are required each year for continuing education (CE). |
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Term
| How many hours of CE are required for Ethics/Fraud each year? |
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Definition
| At least 2 hours of Ethics/Fraud are required each year for Continuing Education (CE). |
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Term
| How many hours of non traditional mortgage products education are required for CE each year? |
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Definition
| Continuing Education (CE) requires at least 2 hours of non traditional mortgage products education each year. The SAFE ACT defines a non traditional mortgage loan as anything other than a 30 year fixed rate loan. |
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Term
| Which section of the test requires 3 hours of education each year when completing CE? |
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Definition
| Fed Law requires 3 hours of Continuing Education (CE) each year. |
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Term
| Which 2 sections of the test require at least 2 hours of Continuing Education training each year? |
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Definition
| Ethics/Fraud and Non-Traditional Mortgage Products |
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Term
| Non-Traditional Mortgage Products and Ethics/Fraud each require at least _____ hours of Continuing Education training each year. |
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Definition
| Two hours of continuing education are required for Ethics/Fraud and two hours are required for non-traditional mortgage products each year. |
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Term
| In order to become licensed as a mortgage broker company/lender or MLO you must not have had a felony in the last _______ years. |
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Definition
| Anyone convicted of a felony in the last 7 years cannot become licensed. |
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Term
| You cannot be licensed if you have been convicted of a __________ in the last 7 years. |
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Definition
| Anyone convicted of a felony in the last 7 years cannot be licensed. |
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Term
| How long does someone have to wait after being convicted of a felony relating to fraud, dishonesty, money laundering, etc. before they can become licensed? |
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Definition
| A person convicted of a a felony that had to do with fraud, dishonesty, money laundering etc. can NEVER become licensed (unless pardoned/expunged). |
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Term
| How long does someone have to wait to become licensed if a prior felony has been pardoned/expunged. |
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Definition
| There is no wait if a felony has been pardoned or expunged from your record. |
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Term
| How long does someone have to wait to retake the exam after failing? |
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Definition
|
|
Term
| How long does someone have to wait to retake the exam after failing 3 times? |
|
Definition
|
|
Term
| What does NMLS/R stand for? |
|
Definition
| Nationwide Mortgage Licensing System/Registry (Deposit taking institutions and their MLO's only need to register) |
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Term
| What regulatory entity created NMLS? |
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Definition
The Nationwide Mortgage Licensing System was created and is owned by SRR (State Regulatory Registry), which is an LLC of: CSBS - Conference of State Bank Supervisors
AARMR - American Association Of Residential Mortgage Regulators |
|
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Term
|
Definition
| Conference of State Bank Supervisors |
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|
Term
|
Definition
| American Association of Residential Mortgage Regulators |
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Term
| Does the NMLS approve/deny licenses? |
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Definition
| Nationwide Mortgage Licensing System does not approve or deny applications for licenses; they only process them for the states. The NMLS is authorized to accept applications for all 50 states and US Territories.(includes P.R., Guam and V.I.) |
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Term
| Do Processors and UW who are employed by licensed or exempt entities have to be licensed? |
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Definition
| Under the SAFE Act they are exempt. They can perform clerical and support duties and speak with the borrower to obtain documents but cannot discuss programs or rates. |
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Term
| Are Processors and UW who contract with a company required to be licensed? |
|
Definition
|
|
Term
| A licensed MLO can work for up to _______(how many) companies? |
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Definition
| A licensed MLO can only work for one company at a time. |
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Term
| What is an MLO/what duties do they perform? |
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Definition
| A Mortgage Loan Originator is someone who takes mortgage applications or negotiates rates and terms with borrowers. |
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Term
| How many companies can a contract Processor or Underwriter who is licensed as an MLO work for? |
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Definition
| A contract Processor or Underwriter who is licensed as an MLO can work for as many companies as they want. |
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Term
| How many hours of CE does a licensed MLO get credit for for each hour they teach an approved NMLS approved course? |
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Definition
| For each hour a licensed MLO teaches an approved NMLS course they get credit for two hours of Continuing Education (CE). |
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|
Term
|
Definition
FNMA - Federal National Mortgage Association
FHLMC - Federal Home Loan Mortgage Corporation |
|
|
Term
| What does GNMA stand for? |
|
Definition
| GNMA - Government National Mortgage Association |
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|
Term
| What does FNMA stand for? |
|
Definition
| FNMA - Federal National Mortgage Association |
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|
Term
| What does FHLMC stand for? |
|
Definition
| FHLMC - Federal Home Loan Mortgage Corporation |
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|
Term
|
Definition
| FHA - Federal Housing Administration - its a division of HUD |
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|
Term
| What is the Federal Housing Administration a division of? |
|
Definition
| FHA - Federal Housing Administration - its a division of HUD (US Department of Housing and Urban Development) |
|
|
Term
|
Definition
| US Department of Housing and Urban Development |
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|
Term
|
Definition
| Government Sponsored Enterprise |
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|
Term
| Which organization buys government loans? |
|
Definition
| GNMA - Government National Mortgage Association buys government loans |
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Term
| What is the purpose of a GSE and who were the GSE's created by? |
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Definition
| GSE's (Fannie Mae and Freddie Mac) were created by Congress to create liquidity in the mortgage markets by adding a secondary market in which conventional conforming loans would be purchased from the lender, which frees up more money for the lender to create new loans. |
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Term
| What are the three types of government loans? |
|
Definition
|
|
Term
| FHA, VA and USDA are all government loans and therefore would be bought by _________. |
|
Definition
| GNMA - Ginnie Mae - Government National Mortgage Association |
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|
Term
| What are the three types of loans GNMA will buy? |
|
Definition
|
|
Term
| What type of loans will FNMA/FHLMC buy? |
|
Definition
| Conventional (non-government), conforming loans |
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|
Term
|
Definition
| The Federal Housing Administration does not create (make) loans, they insure them. |
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|
Term
| FHA _________s loans, VA ________s loans. |
|
Definition
| The Federal Housing Administration (FHA) insures loans, while VA guarantees them. |
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Term
| ________ insures loans, while _______ guarantees them. |
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Definition
| The FHA insures loans and the VA guarantees loans |
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Term
| What is the primary market? |
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Definition
| The primary market is where loans are originated (ie: MLO's, Brokers, Lenders, Banks, etc.) |
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|
Term
| What is the secondary market? |
|
Definition
| The secondary market is where loans are sold (GNMA, FHLMC, FNMA) |
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|
Term
CONFORMING VS. CONVENTIONAL:
A __________ loan can be a __________ loan but a _______________loan isn’t always a ___________ loan. |
|
Definition
| A conforming loan can be a conventional but a conventional loan isn't always a conforming loan. |
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|
Term
| What is a conventional loan? |
|
Definition
| A conventional loan is a non-government (not guaranteed or insured by VA, FHA or RHS{Rural Housing Service} of the US Department of Agriculture. Almost any type of loan, if not issued, guaranteed or insured by a government entity, is considered a conventional loan. |
|
|
Term
| What is a conforming loan? |
|
Definition
| A conforming loan meets the standards set forth by FNMA and FHLMC and must be a first mortgage. |
|
|
Term
| What is the maximum conforming loan amount for a single family dwelling? |
|
Definition
|
|
Term
| What is a non-conforming loan? Is it considered conventional? |
|
Definition
| A non-conforming loan does not meet FNMA/FHLMC guidelines but is still considered conventional. |
|
|
Term
| Are jumbo loans conforming and/or conventional? |
|
Definition
| A jumbo loan is a conventional, non-conforming loan (does not meet FNMA/FHLMC guidelines) |
|
|
Term
| Are 2nd mortgages/subordinate liens considered conforming and/or conventional? |
|
Definition
| A 2nd mortgage is a conventional, non-conforming loan. Non-conforming loans cannot be sold to GSE's. |
|
|
Term
|
Definition
| Mortgage Backed Securities are a product of the secondary market. |
|
|
Term
|
Definition
| Service Release Premium is the premium paid by the purchaser of the loan that is over the amount of the outstanding loan balance when a loan is sold on the secondary market. |
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|
Term
|
Definition
| An encumbrance is a claim against a property that is held by someone who is not the legal owner. ie: easement (utility), public and private restrictions (sidewalk), encroachment (fence or structure) |
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Term
| Encroachments, public and private restrictions, and easements are all types of __________. |
|
Definition
| Encumbrances - a claim against a property that is held by someone who is not the legal owner. |
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|
Term
| A _________ can keep title from transferring, while an encumbrance will not. |
|
Definition
|
|
Term
| A lien can keep title from transferring, while an __________ will not. |
|
Definition
|
|
Term
| Can a lien keep title from transferring? |
|
Definition
|
|
Term
| Does an encumbrance keep title from transferring? |
|
Definition
|
|
Term
| A mortgagee/trustee is the ______________. |
|
Definition
| Mortgagee / Trustee = lender (MORTGAGEE AND LENDER BOTH HAVE TWO E’S IN THEM SO THEY GO TOGETHER) |
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|
Term
| A mortgagor/trustor is the ______________. |
|
Definition
| Mortgagor/ Trustor = Borrower (BORROWER AND MORTGAGOR/TRUSTOR BOTH HAVE “O" and "R” IN THEM SO THEY GO TOGETHER) |
|
|
Term
|
Definition
| Conveyance - You convey title when you transfer title from owner to owner. |
|
|
Term
| What is it called when you transfer title from owner to owner? |
|
Definition
|
|
Term
|
Definition
| Reconveyance - When a borrower has a mortgage out with a lender - means they don't have free and clear rights to title. When the borrower pays off the loan the lender must RECONVEY the property to the borrower (satisfaction of mortgage) |
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|
Term
| When the borrower satisfies the mortgage and the title transfers back to the borrower this is called _______________. |
|
Definition
|
|
Term
| What is the difference between a mortgage and a Note? |
|
Definition
| The mortgage is the promise to use the property as collateral for a loan. The Note is the promise to repay a debt. |
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Term
| A DOT (deed of trust) is used in a ________ theory state. |
|
Definition
| In a title theory state, the lender holds title in the name of the borrower through a Deed of Trust until the debt is paid in full. At that point title is reconveyed back to the borrower. |
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|
Term
| A Mortgage is used in a __________ theory state. |
|
Definition
| Lien theory states use mortgages. The deed stays with the borrower and the lender places a lien on the property using the mortgage instrument |
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|
Term
| What is a contract for deed? |
|
Definition
| A contract for deed is a complete financing agreement and sales contract between the buyer and seller. The seller agrees to directly finance the transaction. |
|
|
Term
| How is the late payment fee calculated on a VA loan? |
|
Definition
| The late payment on a VA loan is 4% of the P&I (Principal and Interest) |
|
|
Term
| What type of loan uses 4% of the principal and interest payment to calculate the late payment fee? |
|
Definition
| Late payment fees on VA loans are calculated by taking 4% of the principal and interest payment. |
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|
Term
| What are the two types of prepayment penalties? |
|
Definition
1) Hard prepayment penalty - set time frame, the property if sold or refinanced during this time frame would allow the lender to charge a set penalty
2) Soft prepayment penalty - With a soft prepayment penalty you CAN sell without a penalty but CANNOT refinance without a penalty |
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|
Term
| What type of prepayment penalty restricts you from refinancing without a penalty but allows you to sell without a penalty? |
|
Definition
| With a soft prepayment penalty you CANNOT refinance without a penalty but you CAN sell without incurring a penalty. |
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|
Term
| What is the purpose of an exculpatory clause? |
|
Definition
| An exculpatory clause is a part of a contract that removes an individual's liability under the contract |
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|
Term
| What is a defeasance clause? |
|
Definition
| A defeasance clause allows the lender to tae the property without foreclosure in a title state (Deed of Trust) when the borrower defaults. |
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|
Term
| How is the priority of liens determined? (who has first, second, etc.?) |
|
Definition
| Tax/goverment liens are always first, then the order is determined by the date they were recorded. |
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|
Term
|
Definition
| Table funding is when the loan closes and is sold to the lender who funded simultaneously. |
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|
Term
| Can JUMBO loans be purchased by FNMA/FHLMC even though they are not conforming? |
|
Definition
| Jumbo loans can be purchased by Fannie Mae and Freddie Mac but will come with higher rates and are not considered conforming. |
|
|
Term
| A loan that exceeds the Federal National Mortgage Association's (FNMA) limit of $417,000 is known as what type of loan? |
|
Definition
|
|
Term
| A JUMBO loan is a loan that exceeds the Fannie Mae limit of $______________. |
|
Definition
|
|
Term
| What is a non-traditional loan? |
|
Definition
| A non-traditional loan is anything other than a 30 year fixed rate loan. |
|
|
Term
| What are the two requirements to be considered a traditional loan? |
|
Definition
| Must be fixed rate, 30 year loan |
|
|
Term
| A 30 year fixed rate loan is considered a _______. |
|
Definition
|
|
Term
|
Definition
| A 1003 is a Uniform Residential Loan Application |
|
|
Term
| What is the form number for a Uniform Residential Loan Application (URLA)? |
|
Definition
|
|
Term
|
Definition
| A 1008 is an Underwriting and Transmittal Summary |
|
|
Term
| What is the form number for the Underwriting and Transmittal Summary? |
|
Definition
|
|
Term
| Fannie qualifying ratios (front end [housing]and back end[total debt to income]) are __/__. |
|
Definition
|
|
Term
| Front end (housing) qualifying ratio for FNMA is __%. |
|
Definition
|
|
Term
| Back end (total debt) qualifying ratio for FNMA is __%. |
|
Definition
|
|
Term
| What two types of AUS (Automated Underwriting Systems) does FNMA use? |
|
Definition
1) DO - Desktop Originator and is used by brokers
2) DU - Desktop Underwriter and is used by lenders |
|
|
Term
|
Definition
| LP - Loan Prospector is used by lenders and brokers |
|
|
Term
| What is a 4506T? (don't forget the T) |
|
Definition
| A 4506T is a Request for copy of tax transcript |
|
|
Term
| How soon must a borrower occupy the property after the purchase according to Fannie/Freddie guidelines? |
|
Definition
| A borrower must occupy the property within 60 days of the purchase according to FNMA/FHLMC guidelines when buying owner occupied property. |
|
|
Term
| Does FHA make or insure loans? |
|
Definition
| The Federal Housing Administration (FHA) does not make loans, they insure them. |
|
|
Term
| The FHA is a division of ______. |
|
Definition
| The FHA is a division of HUD. |
|
|
Term
| What entity is the largest insurer of mortgage loans? |
|
Definition
| FHA is the largest insurer of mortgage loans. |
|
|
Term
| What are the two types of MI (Mortgage Insurance) that are charged on an FHA loan? |
|
Definition
1) UFMIP - Up front mortgage insurance premium
2) (Annual) Monthly MIP |
|
|
Term
| Is mortgage insurance on FHA loans charged up front when the loan is closed, monthly, or both? |
|
Definition
| MI on FHA loans has two parts. An up front premium is charged when the loans closes and the borrower pays 1/12th of an annual premium each month after that. |
|
|
Term
| How long does MIP stay on an FHA loan with an LTV greater than 90%? |
|
Definition
|
|
Term
| How long does MIP stay on an FHA loan with an LTV of 90% or less? |
|
Definition
|
|
Term
| Is anyone eligible for an FHA loan? |
|
Definition
|
|
Term
| Can gift funds be used to close on FHA loans? |
|
Definition
|
|
Term
| What are the prepayment penalties on an FHA loan? |
|
Definition
| There aren't any. That was a trick question dummy. |
|
|
Term
| How much can a seller contribute towards closing costs on an FHA loan? |
|
Definition
|
|
Term
| What are the qualifying ratios (front and back end) for an FHA loan? |
|
Definition
|
|
Term
| What is the housing (front end) qualifying ratio for an FHA loan? |
|
Definition
|
|
Term
| What is the back end qualifying ratio for an FHA loan? |
|
Definition
|
|
Term
| Who are VA loans sold to? |
|
Definition
| GNMA - VA loans are sold to Ginnie Mae, as they are guaranteed by the government |
|
|
Term
| How much of a down payment is required on a VA loan? |
|
Definition
| No down payment is required on VA loans |
|
|
Term
| What is the actual entitlement limit on a VA loan when the COE lists $36,000? |
|
Definition
| The limit on a VA loan is 4 times the amount listed on the COE up to 25% of the county loan limit $104,250 |
|
|
Term
| What is the maximum origination fee a lender can charge on a VA loan? |
|
Definition
| 1% is the maximum origination fee a lender can charge on a VA loan. |
|
|
Term
|
Definition
| VA loans are always assumable and it does not have to be a veteran who assumes the loan. |
|
|
Term
| When is the veterans entitlement restored after a VA loan is assumed? |
|
Definition
| If a VA loan is assumed by someone else, the veteran's entitlement will not be restored until the debt is paid off. |
|
|
Term
| What is the qualifying ratio (same for front and back end) for a VA loan? |
|
Definition
| The qualifying ratio for a VA loan is 41%. |
|
|
Term
| 41% is the qualifying ratio for what type of loan? |
|
Definition
| The qualifying ratio for a VA loan is 41%. |
|
|
Term
| How much can sellers contribute towards the closing costs on a VA loan? |
|
Definition
| Sellers can contribute 4% towards closing costs on VA loans. |
|
|
Term
On a VA loan what is the funding fee percentage for each of the following?
Active duty
Reserve/Guard
Subsequent use |
|
Definition
Active duty - 2.15%
Reserve/Guard - 2.4%
Subsequent use - 3.3% |
|
|
Term
| What does IRRRL stand for? |
|
Definition
| IRRRL - Interest Rate Reduction Refinance Loan |
|
|
Term
| What is the percent of the USDA guaranty fee? Can it be financed into the loan? |
|
Definition
| The USDA guarantee fee is 2% and can be financed into the loan, which means the max LTV on a USDA loan is 102%. |
|
|
Term
|
Definition
| ARM - Adjustable Rate Mortgage |
|
|
Term
| What is the start rate or teaser? |
|
Definition
| The start rate/teaser is the lower introductory rate a borrower gets for a specified period of time at the beginning of the loan. |
|
|
Term
| LIBOR and COFI are _______. |
|
Definition
| LIBOR and COFI are indexes. London Interbank Offered Rate and Cost of Funds Index. |
|
|
Term
| What is the margin? Does it change? |
|
Definition
| The margin is the amount that will be added to the chosen index at each adjustment (provided that it is within the caps). The margin stays the same throughout the life of the loan. It is the index that changes. |
|
|
Term
|
Definition
| Caps limit the amount an interest rate can change. Usually an adjustment period cap and a life of loan cap. Sometimes there is an initial adjustment cap too. |
|
|
Term
| How to calculate fully indexed rate: |
|
Definition
| M + I = R ( fully indexed rate) (MARGIN PLUS INDEX EQUALS FULLY INDEXED RATE) **MAKE SURE IT DOES NOT EXCEED CAPS** |
|
|
Term
| What is the minimum term allowed on a balloon? |
|
Definition
| 5 years is the minimum term allowed on a balloon loan. |
|
|
Term
| What is the minimum age to receive a HECM - Home Equity Conversion Mortgage? (reverse mortgage) |
|
Definition
| A borrower must be at least 62 years old to qualify for a reverse mortgage (HECM). |
|
|
Term
| LTV is based on age for an HECM (reverse mortgage). The older you are the _____________ the LTV. |
|
Definition
| On a Home Equity Conversion Mortgage (reverse mortgage), the older you are, the higher the LTV. |
|
|
Term
| What are the credit and income requirements for a reverse mortgage (HECM)? |
|
Definition
| There are no credit or income requirements for a reverse mortgage. |
|
|
Term
| What are the 3 ways to get your money from an HECM (reverse mortgage)? |
|
Definition
3 ways to get your money from a reverse mortgage (Home Equity Conversion Mortgage):
1.) Lump Sum
2.) Monthly
3.) Home Equity Line of Credit ( HELOC) |
|
|
Term
| What does HECM stand for? |
|
Definition
| A Home Equity Conversion Mortgage is also known as a reverse mortgage or an HECM. |
|
|
Term
| How long do the heirs have to refinance or sell the property after the borrower for an HECM has deceased? |
|
Definition
| Home Equity Conversion Mortgage: No repayment until death - heirs can refi or sell - have 12 months |
|
|
Term
| Does the age of the property affect the money received for an HECM? |
|
Definition
| The age of the property does not affect the amount of money received for an HECM. |
|
|
Term
|
Definition
| A Home Equity Line of Credit is open ended credit provided using the borrower's equity in the property as collateral. |
|
|
Term
| Is a construction loan permanent financing? |
|
Definition
| A construction loan is interim financing taken in draws until the construction is complete, at which time it is typically replaced by "permanent financing" aka "a take out loan". |
|
|
Term
| What is the Fannie Mae form used by an appraiser to certify construction is complete? |
|
Definition
| A form 1004D (D IS FOR DONE) is used by an appraiser for a FNMA loan to certify construction is complete. |
|
|
Term
| What is a form 1004D used for? |
|
Definition
| A form 1004D (D IS FOR DONE) is used by an appraiser for a FNMA loan to certify construction is complete. |
|
|
Term
| What is the Freddie Mac form used by an appraiser to certify construction is complete? |
|
Definition
| A form 442 is used by an appraiser for a FHLMC loan to certify construction is complete. |
|
|
Term
| What is a form 442 used for? |
|
Definition
| A form 442 is used by an appraiser for a FHLMC loan to certify construction is complete. |
|
|
Term
|
Definition
| POC - Paid outside of closing |
|
|
Term
|
Definition
| PFC - Prepaid Finance Charge (discount points) |
|
|
Term
| What is the percent of the USDA guaranty fee? Can it be financed into the loan? |
|
Definition
| The USDA guarantee fee is 2% and can be financed into the loan, which means the max LTV on a USDA loan is 102%. |
|
|
Term
|
Definition
| ARM - Adjustable Rate Mortgage |
|
|
Term
| What is the start rate or teaser? |
|
Definition
| The start rate/teaser is the lower introductory rate a borrower gets for a specified period of time at the beginning of the loan. |
|
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Term
| LIBOR and COFI are _______. |
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Definition
| LIBOR and COFI are indexes. London Interbank Offered Rate and Cost of Funds Index. |
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Term
| What is the margin? Does it change? |
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Definition
| The margin is the amount that will be added to the chosen index at each adjustment (provided that it is within the caps). The margin stays the same throughout the life of the loan. It is the index that changes. |
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Term
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Definition
| Caps limit the amount an interest rate can change. Usually an adjustment period cap and a life of loan cap. Sometimes there is an initial adjustment cap too. |
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Term
| How to calculate fully indexed rate: |
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Definition
| M + I = R ( fully indexed rate) (MARGIN PLUS INDEX EQUALS FULLY INDEXED RATE) **MAKE SURE IT DOES NOT EXCEED CAPS** |
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Term
| What is the minimum term allowed on a balloon? |
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Definition
| 5 years is the minimum term allowed on a balloon loan. |
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Term
| What is the minimum age to receive a HECM - Home Equity Conversion Mortgage? (reverse mortgage) |
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Definition
| A borrower must be at least 62 years old to qualify for a reverse mortgage (HECM). |
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Term
| LTV is based on age for an HECM (reverse mortgage). The older you are the _____________ the LTV. |
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Definition
| On a Home Equity Conversion Mortgage (reverse mortgage), the older you are, the higher the LTV. |
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Term
| What are the credit and income requirements for a reverse mortgage (HECM)? |
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Definition
| There are no credit or income requirements for a reverse mortgage. |
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Term
| What are the 3 ways to get your money from an HECM (reverse mortgage)? |
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Definition
3 ways to get your money from a reverse mortgage (Home Equity Conversion Mortgage):
1.) Lump Sum
2.) Monthly
3.) Home Equity Line of Credit ( HELOC) |
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Term
| What does HECM stand for? |
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Definition
| A Home Equity Conversion Mortgage is also known as a reverse mortgage or an HECM. |
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Term
| How long do the heirs have to refinance or sell the property after the borrower for an HECOM has deceased? |
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Definition
| Home Equity Conversion Mortgage: No repayment until death - heirs can refi or sell - have 12 months |
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Term
| Does the age of the property affect the money received for an HECM? |
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Definition
| The age of the property does not affect the amount of money received for an HECM. |
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Term
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Definition
| A Home Equity Line of Credit is open ended credit provided using the borrower's equity in the property as collateral. |
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Term
| Is a construction loan permanent financing? |
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Definition
| A construction loan is interim financing taken in draws until the construction is complete, at which time it is typically replaced by "permanent financing" aka "a take out loan". |
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Term
| What is the Fannie Mae form used by an appraiser to certify construction is complete? |
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Definition
| A form 1004D (D IS FOR DONE) is used by an appraiser for a FNMA loan to certify construction is complete. |
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Term
| What is a form 1004D used for? |
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Definition
| A form 1004D (D IS FOR DONE) is used by an appraiser for a FNMA loan to certify construction is complete. |
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Term
| What is the Freddie Mac form used by an appraiser to certify construction is complete? |
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Definition
| A form 442 is used by an appraiser for a FHLMC loan to certify construction is complete. |
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Term
| What is a form 442 used for? |
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Definition
| A form 442 is used by an appraiser for a FHLMC loan to certify construction is complete. |
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Term
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Definition
| POC - Paid outside of closing |
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Term
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Definition
| PFC - Prepaid Finance Charge (discount points) |
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