Champions School of Real Estate - Real Estate Finance A loan unable to be sold to Fannie Mae or Freddie Mac (i.e. A sub-prime loan) Correct Ans - Non-Conforming Loan VA Correct Ans - Veteran's administration - assists veterans in the purchase of housing by guaranteeing loans) Seller's equity Correct Ans - Cash price minus the loan balance A clause often found in a blanket loan allowing the borrower to obtain partial releases of specific lots by making required lump sum payments. Correct Ans - Release Clause One percent of a loan that is a loan processing fee Correct Ans - Origination Point The repayment or satisfaction of a debt by installment payments of principal and interest on a regular basis. Correct Ans - Amortization A law allowing individuals to inspect their credit files, correct errors and attach explanatory statements. Correct Ans - Fair Credit Reporting Act
(FCRA)
A law requiring lenders to meet the needs of the community in which they are chartered to do business. Correct Ans - Community Reinvestment Act A clause allowing a lender to move to or take a lower lien position. Correct Ans - Subordination Clause A loan whose payments start low and rise every year, usually for five years, after which they level off for the remaining term of the loan - can result in negative amortization. Correct Ans - Graduated Payment Mortgage
(GPM) 1 / 2
An increase in debt due to payments less than the interest owed - can be associated with a graduated payment mortgage. Correct Ans - Negative Amortization TIL, REG Z, Regulation Z, or the Consumer Credit Protection Act - a law passed to help consumers understand the true cost of borrowing money. Correct Ans - Truth in Lending Buyer's Equity Correct Ans - The down payment amount at closing.DD 214 Correct Ans - Veteran's discharge papers - provided to demonstrate eligibility for a VA loan.A loan secured by real property plus personal property. Correct Ans - Package loan An upfront payment of points used to reduce the borrower's monthly payment - by paying points at closing a borrower may secure a lower rate on the loan. Correct Ans - Buy Down A clause outlining the obligations of the original borrower and a new borrower in the event the loan is assumed. Correct Ans - Assumption Clause Lender under a mortgage Correct Ans - Mortgagee The action of pledging real property as security for a debt Correct Ans - Hypothecation A loan with an investor/lender who collects principal and interest payments and then a percent of the profits when the property is sold. Correct Ans - Shared Appreciation Loan Borrower under a mortgage Correct Ans - Mortgagor A loan that is neither federally insured nor guaranteed - a private sector loan.Correct Ans - Conventional Loan
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