Chapter 4 Outline (1)

Fannie mae mortgage backed securities mbs 1 mortgage

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Fannie Mae mortgage-backed securities (MBS) 1. Mortgage loans packaged into securities 2. Sold in international capital markets 3. “Universal Debt Facility Offering Circular” provides information L. Underwriting standards 1. Electronic underwriting system a. Desktop Underwriter ® b. Desktop Originator ® 2. Guidelines a. Private mortgage insurance (PMI) coverage with loan to value (LTV) exceeding 80 percent b. Percentage required for down payment c. Seller contribution toward closing costs ©2015 Kaplan, Inc. May be reproduced for educational uses only.
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Essentials of Real Estate Finance Fourteenth Edition d. Homebuyer education required on MyCommunityMortgage ® e. Ratios set for housing and total debt expense f. Minimum down payment g. Prior foreclosure 3. Conforming and nonconforming loans a. Conforming loans conform to Fannie Mae/Freddie Mac guidelines b. Nonconforming loans do not meet guidelines c. Loan limits adjusted annually d. Jumbo loans exceed maximum loan limits 4. Credit scoring a. Based on risk factors b. National repositories 1) Experian 2) Equifax 3) TransUnion c. FICO scores 5. Establishing nontraditional credit a. FICO Tier I b. FICO Tier II c. FICO Tier III 6. Fannie Mae loan products a. Fixed loans b. Adjustable-rate loans c. Home construction loans d. Renovation loans e. HomePath loans f. MyCommunityMortgage ® loans V. FREDDIE MAC A Organization 7. Created under Emergency Home Finance Act of 1970 a. Provides secondary market for savings associations and thrifts b. Under direction of Federal Home Loan Bank Board 8. Since 1989, independent stock company and GSE M. Secondary market operations 1. Purchases conventional, FHA, and VA loans 2. Collateralize mortgage packages as participation certificates (PCs) 3. Placed in conservatorship under FHFA in 2008 N. Underwriting standards 1. Guidelines generally same as for Fannie Mae ©2015 Kaplan, Inc. May be reproduced for educational uses only.
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Essentials of Real Estate Finance Fourteenth Edition 2. One exception to Fannie Mae: only use debt-to-income ratio for qualifying 3. Electronic underwriting system a. Loan Prospector ® b. Assessment of risk O. Freddie Mac loan products 1. Fixed and adjustable rate 2. Home Possible ® affordable loans P. Qualified Residential Mortgage (QRM) 1. Potential new program for Fannie Mae and Freddie Mac a. Requires 20 percent down payment, 28/36 ratios, above-average credit score b.
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  • Fall '07
  • Murray
  • Mortgage loan, Subprime mortgage crisis

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