Chapter 11- Study Guide

What are the three components of the real estate financing market?

• Governmental influence, primary mortgage market, secondary mortgage market

• Federal Reserve System, commercial banks, savings associations

• Interest rates, loan origination, mortgage brokers

• Borrowers, lenders, investors

What is the role of the Federal Reserve System (FED) in the real estate financing market?

• It sets the interest rates and helps create a favorable economic climate

• It originates loans and interacts with borrowers

• It purchases mortgage loans and assembles them into packages

• It provides direct loans to homebuyers

Which of the following is true about the primary mortgage market?

• It is where loans are originated and involves interactions with borrowers and lenders

• It purchases and sells existing mortgages

• It does not interact with borrowers

• It only involves governmental agencies

What is the function of mortgage brokers in the primary mortgage market?

• They bring borrowers and lenders together but do not lend money themselves

• They set interest rates and regulate the supply of money

• They purchase mortgage loans and sell them to investors

• They provide direct loans to borrowers

Which institutions are part of the secondary mortgage market?

• Frannie Mae, Freddie Mac, Ginnie Mae

• Commercial banks, savings associations, mutual savings banks

• Federal Reserve System, mortgage brokers, loan officers

• Borrowers, lenders, investors

Which government-sponsored enterprise deals with conventional and Federal Housing Administration (FHA) loans?

• Freddie Mac

• Ginnie Mae

• Frannie Mae

• Sallie Mae

Which government-sponsored enterprise deals primarily with conventional loans?

• Freddie Mac

• Ginnie Mae

• Frannie Mae

• Sallie Mae

What is the role of Ginnie Mae in the secondary mortgage market?

• It purchases mortgage loans from primary lenders.

• It sells mortgage-backed securities backed by FHA and VA loans.

• It provides insurance for mortgage loans.

• It offers direct loans to homebuyers.

What is a mortgage in the context of mortgage law?

• A voluntary, specific lien on real estate.

• A negotiable instrument like a check.

• A government grant for homebuyers.

• A type of insurance for property.

Who is the mortgagor in a mortgage loan transaction?

• The lender

• The borrower

• The government agency

• The real estate agent