Mortgage Markets
Where do mortgage loans originate?
Primary Market
Loans not insured or guaranteed by the federal government and can take on any form that the customer and mortgage lender agree to.
Conventional Loans
The amount the lender charges for the use of money; usually expressed as an annual percentage.
Interest Rate
The ___ gathers documents that verify income, employment, monthly bills, savings account, etc. to prepare the loan file for review.
Loan Processor
Where are mortgages traded and mortgage lenders and other financial intermediaries transact with investors?
Secondary Market
Designed for low and moderate housing markets; great for first-time homebuyers and customers with cash liquidity restrictions.
FHA Loans
The period between the commencement date and termination of a Note or Mortgage.
Loan Term
What document evidences the borrower's promise to repay the loan?
Note
To minimize risk, investors publish requirements describing what loans they are willing to purchase. What are these requirements known as?
Investor Guidelines
What are are the features of a loan product?
Interest Rate, Payment Type, Loan Amortization
What are the four components of a loan file?
Credit, Income, Assets, Property
What party purchases loans in the secondary mortgage market?
Investors
The contract that outlines the duties and obligations of the servicer, stipulates what the servicing fee will be and when remittance is due is known as the _________.
Servicing Agreement
What are the roperty types
Single-Family Attached/Detached, PUD/Condo/Co-Op, Manufactured Home
The pay down of the loan over time, where principal payments reduce the principal balance.
Loan Amortization
What is the security instrument used to pledge the property as collateral?
Mortgage (or Deed of Trust)
What are ways a servicer can make revenue?
servicing fees, float income, ancillary fees, and interest income
Some lenders (and some loan programs) require customers to maintain an __________ account that pays the property taxes and insurance.
Escrow Account
This is the legal execution of the loan. This is where the title is transferred from the seller to the buyer/borrower and the mortgage lender establishes its various legal repayment, collateral and default rights.
Closing
What are the four components that make up the loan payment?
PITI