CD4:
Real Estate Finance Today
~Content Detail~
Basics of Real Estate Finance
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Define and explain the use of the principal financing instruments: the note,
the mortgage, and the deed of trust
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Name major sources of mortgage loan funding in the primary market
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Identify and explain the role of the primary players in the secondary market
Government Influences on Real Estate Finance
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Explain the significance of the Federal Reserve Board as it relates to
mortgage lending
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Name and explain the functions of the government agencies most influential
in home mortgage financing
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Describe the most significant Congressional Acts that apply to home mortgage
lending
Current Trends in Mortgage Lending
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List the benefits and criticisms of the current trend toward computerized
loan approvals, including the "drive-by" appraisal
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Name the three major credit repositories and the source of credit scoring
most commonly used today
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Describe the factors influencing an individual's credit score and ways to
improve scores
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Explain the new concept of "risk-based financing" and its potential
influence on the real estate market
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Recognize the influence of the growing immigrant population on today's real
estate market
Conventional Mortgage Loans
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Describe the guidelines of the Fannie Mae/Freddie Mac conforming loans
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Explain the purpose of private mortgage insurance (PMI) and alternatives in
practice today
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Calculate the borrowing power of a prospective purchaser
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Describe the affordable loan products offered by Fannie Mae and Freddie Mac
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List the components of an adjustable rate mortgage (ARM), the benefits and
disadvantages
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Calculate the monthly mortgage payment on any given loan
Government Insured or Guaranteed Loans
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List the guidelines to be followed for both FHA and VA loans, including
maximum loan amount, minimum down payment, qualifying ratios, seller
contribution, and assumability
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Explain the costs involved and the purpose of the FHA mortgage insurance
premium and the VA funding fee
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Make a list of compensating factors that may be considered to enable a
borrower to gain loan approval
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Calculate the down payment, loan amount, and monthly mortgage payment for an
FHA loan including any mortgage insurance, and for a VA loan including
funding fee where required
Special Financing Alternatives
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Explain the various ways that sellers may be able to provide financing for
the purchaser of their property
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Describe the essential elements of a lease-purchase contract
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Understand the special problems encountered by a self-employed borrower
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List alternative sources of cash for down payment and closing
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Explain the purpose and implementation of a reverse annuity mortgage
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