chapter 6 7

chapter 6 7 - 1. Mortgage loan credit could be considered a...

Info iconThis preview shows pages 1–2. Sign up to view the full content.

View Full Document Right Arrow Icon
1. Mortgage loan credit could be considered a type of consumer credit because of the fact that the consumer is using the loan to buy something with it. Mortgage loan credit could also be consider business or investment credit because real estate is one of the best investments because it is shown that over time real estate increases in value more than most other investments. 2. I would want to buy a home because it usually increases in value over time faster than most other investments. Buying a home and then selling it can also make people very rich. I would want to rent if I wasn’t going to stay in the area for long. 3. A first mortgage is when the initial purchase of real property, and it provides the lender with the first claim on the value of the real estate in the event the borrower defaults on the loan and cannot pay. But the second mortgage is where the mortgage contracts are purchase by various federal agencies and later sold to investors. 4. The FHA(Federal Housing Administration) was established primarily to increase home construction, reduce unemployment, and operate various loan insurance programs. The Veterans Administration was authorized to guarantee or insure home, farm, and business loans made by veterans by lending institutions. The Private mortgage insurance guarantees the repayment of conventional home mortgage loans in exchange for a one-time premium paid by the mortgage holder. 5. Second-layer lenders conduct secondary market activities in the buying and selling of loans and provide credit to primary lenders in the form of borrowed money. Examples of these lenders are Federal Home Loan Mortgage Corporation, the Federal National Mortgage Association, and the Government National Mortgage Association. Secondary mortgage market is where mortgage contracts are purchased by various
Background image of page 1

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full DocumentRight Arrow Icon
Image of page 2
This is the end of the preview. Sign up to access the rest of the document.

Page1 / 3

chapter 6 7 - 1. Mortgage loan credit could be considered a...

This preview shows document pages 1 - 2. Sign up to view the full document.

View Full Document Right Arrow Icon
Ask a homework question - tutors are online