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1. Know the components of a mortgage, types of loans government vs.

conventional, etc and the documents that go with it.


a. Bowrrer signs 2 documents
i. Promissory note
ii. Deed of trust mortgage
b. Government loans
i. FHA less down payment and 29%
ii. VA
c. Conventional loans
i. Non-government loan
ii. Home equity loans
2. Role of Fannie Mae and Freddie Mac
a. Which mortgage market secondary
b. What are the different kinds of loans some are government
guaranteed some are not
c. First time home buyer what kind of loan do they get
3. Roles of FHA and VA and their roles in the lending market
a. FHA the borrower defaults the lender does not take property back

expand on it
b. VA for military veterans; guarantees tops 20% of the loan
c. Know difference between insuring and guaranteeing
d. If there is a foreclosure situation and the lender closes on the
property what can they do?
i. Sue you unless deed of loan says they cant sue you
ii. Deficiency judgment go to court to say you owe that much?
iii. Deficiency means there is not enough money to pay
e. Balloon loan partially amortizing
f. Markup Lender adds to the index MARGIN- cant change
g. Dollar amount up to which a loan is considered a conforming loan
i. 417,000 if over considered a jumbo loan or non-conforming
h. Most profitable part of
i. Originating and funding the loans
4. Mortgage banker revenue comes from what sources, how do they fund loans,
what is a portfolio lenders
a.
5. 3 Cs of underwriting
a. Capacity
i.
b. Collateral
i. Some down payment
c. Credit worthiness
i. Good credit score and no deficiency judgments
d. The two ratios for underwriting
i. Front ratio- housing ratio 28% 36%
ii.
e. WAREHOUSE LINEMORTGAGE BANKERS LINE OF CREDIT
f.
6. Know how to calculate debt ratios, fv value of a loan

a. Risk factors involved in mortgage banking- if rate has changed


i. Pipeline risk or interest rate risk
b. Types of mortgage bankers
i. Full service mortgage bankers
1. Like bank of America
c.
7. Relationship of a realtor with the client, what kinds of agency, agreements,
etc
a. LAW OF AGENCYi. Does not have to act on behalf of one of the parties
b. LISTING AGREEMENT- IF GOING TO SELL
c. BUYERS AGENT AGREEMENT- represent your buyer
d. SALES CONTRACT
8. RESPA
a. Real estate and settlement procedures act
i. Several things are mandated
1. 3 days to
2. Receive a booklet talking about closing and closing costs
3. Settlement statement standardized form
4.
9. What is included in closing costs
a. Buyers side
i. Appraisal costs-pay when happens
ii. Origination feeiii. Underwriting
iv. Tax certification fee
v. Flood certification fee
vi. Prepaid insurance
vii. Money for escrow
viii. Transfer tax
ix. Mortgage tax
x. File fee
xi. CLOSING COST- AN IMPORTANT ONE
b. Sellers side
c. Close on the 15th of the month some sort of proration
i. Taxes get prorated
ii. May have to prorate insurance and rent, utilities, etc.
d.
10.Legal and equitable title
a. Legal title
i. When you actually own it
b. Equitable title
11.Time value of money problems
a. Money invested at this rate what is the money at end
b. What is the actual money the lender brought

c. LOOK AT CHAPTER 14 SLIDES


d. CALCULATE INTEREST AND PAYMENTS OF FULLY AMORTIZING LOAN
e. HOW POINTS AFFECT A LOAN IF YOU PAY OFF EARLY
12.NPV and IRR
a. PURCHASE PRICE AND CASH FLOWS

13.Calculate monthly payments


14.Lenders yield, apr. how upfront fees affect yield and borrowing cost.
a. APR EFECTIVE BORROWING COST
b. Calculate lenders yield
c. Calculate APR
CALCULATIONS
Debt ratio
Problems about fv stuff
Effective borrowing cost
Payment on the loan
Calculate payment interest only and fully amortizing
Remaining balance on loan