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Unformatted text preview: ;Ls and have reduced their lending for residential mortgages in recent years. Nonetheless, they remain the third largest lender group in residential mortgage holdings, behind S&Ls and commercial banks.
3-6 Licensing School for Appraisal, CPA, Contractors, Insurance, Real Estate, Notary, Nurse, Food Handlers, Tax and Securities 3: INSTITUTIONAL LENDERS
Type of institution – Depository financial intermediary, together with S&Ls are classified as “thrifts”. Organization – Mutual savings banks operate much like former savings and loan associations, but they exist chiefly in the northeastern United States. None exist in California. LIFE INSURANCE COMPANIES
Life insurance companies sell insurance policies and annuities and use the premiums paid plus reinvested dividends for investment. Life insurance companies are another important source of real estate financing, particularly for commercial properties, such as shopping centers and office buildings. They are also a major source of credit for large apartment house projects, hotels and motels, industrial buildings, and regional shopping malls. Type of institution – Financial non–depository intermediary. A life insurance company is a firm that specializes in the insuring of lives for specified amounts in exchange for specified premium payments. The premiums are invested until such time as funds are needed to pay claims or to establish reserves for losses. These premiums are invested in many outlets, including trust deeds and mortgage loans. State chartered – Life insurance companies are chartered by states and operate under the insurance laws of the states in which they operate. They may be organized as either corporate or mutual companies. Mechanism – Payouts to policyholders take the form of benefits, which are reasonably predictable based on mortality tables, and policy loans. Life insurance companies generally seek out the best yields consistent with their cash flow needs and have no basic commitments to res...
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This note was uploaded on 12/30/2010 for the course SOC 101 taught by Professor Zhung during the Spring '10 term at Punjab Engineering College.
- Spring '10