Champions Real Estate Finance Exam
Study Guide
Loan-to-Value Ratio (LTV) - Answer-The percentage of the lesser of the appraised value or
sales price that the lender will lend.
ex: If a borrower is approved for an 80% loan, it means that the lender will loan up to 80% of
the sales price or appr...
Correspondent Lender - Answer✔✔-Usually smaller in scale than mortgage bankers or brokers,
these lenders typically extend loans with their own funds, at their own risk.
Processing - Answer✔✔-Once application is complete the file moves into this phase.
Underwriting - Answer✔✔-The detailed process of evaluating a borrower's loan application to
determine the risk involved for the lender.
Closing - Answer✔✔-The consummation of a real estate transaction in which all appropriate
documents are signed and the proceeds of the mortgage loan are then disbursed by the lender.
Servicing - Answer✔✔-Includes collecting monthly payments, maintaining records of payments
and balances, collecting and paying taxes and insurance ( and managing escrow and impound
funds) remitting funds to the note holder, and following up on delinquencies.
Supply and Demand - Answer✔✔-an economic concept that states that the price of a good rises
and falls depending on how many people want it and depending on how much of the good is
available.
Funding - Answer✔✔-The process of transferring funds to a title or escrow company for
disbursement
The Safe Act - Answer✔✔-Designed to enhance consumer protection and reduce fraud. (Key
component of HERA)
M1 - Answer✔✔-Is defined as the sum of currency held by the public and transaction deposits
at depository institutions.
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