S Throughout the process of originating and selling mortgages, mortgage companies face a number of risks. Therefore, it is important for a lending institution to evaluate the risks of mortgage loan default through a process commonly referred to as: Multiple Choice O O O с warehousing. mortgage fallout. loan servicing. loan underwriting.
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S Throughout the process of originating and selling mortgages, mortgage companies face a number of risks. Therefore, it is important for a lending institution to evaluate the risks of mortgage loan default through a process commonly referred to as: Multiple Choice O O O с warehousing. mortgage fallout. loan servicing. loan underwriting.
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- Commercial loan agreements should contain which of the following: a. representations b. fees and charges c. means of repayment d. all of the above In order for the seller of securitized securities to remove the assets (i.e. mortgages) from the balance sheet, the sale must a. have a service agreement b. be overcollateralized c. be without recourse d. be made at a discount (original issue discount) Banks may deny creditworthy borrowers loan requests if a. they are non-corporate entities b. they are on late on paying taxes c. the loan is too risky d. they are individuals Chattel mortgages refer to a. a security agreement using corporate assets b. a security agreement using commercial equipment c. a security agreement using intangible property d. a security agreement using tangible personal propertyWhich of the following situations are likely to result in higher loan defaults? Mortgages are held by originating institutions in their portfolios. Borrowers have higher equity in their homes. Lenders who require documentation of income, liabilities and asset ownership. Borrowers with low credit scores.Customer loans are classified on a Depository Institution (DI)'s balance sheet as Select one: A. liabilities, because the customer may default on the loan. B. assets, because the DI earns servicing fees on the loan. C. assets, because the DI's major asset is its client base. D. assets, because DIs originate and monitor loan portfolios. E. liabilities, because the DI must transfer funds to the borrower at the initiation of the loan.
- Explain how a mortgage company’s degree of exposure to interest rate risk differs from that of other financial institutions.Discuss the two theories of mortgage default. What are the most important factors that influence the likelihood of default? Discuss the alternatives to default from the lender’s perspective and the incentives lenders face to offer them.What is a mortgage-backed security (MBS)? Why is it difficult for ratings agencies to determine the risk of an MBS? Describe how the existence of MBSs helps homebuyers in the United States.
- The sale of a mortgage portfolio by setting up mortgage pass-through securities is an example of A) Credit enhancement. B) Credit swap. C) Unbundling. D) Derivatives.Describe some of the motives and mistakes made by the mortgage brokers?how collateralized mortgage obligations (CMOs) help to alleviate some of the reinvestment and prepayment risk for investors?
- Loan structuring is the process of designing a loan to satisfy the financing demands of a business borrower. At the same time, it tries to protect the lender against losses caused by the borrower's refusal to repay the debt, as well as the interest and fees associated with it. Determine the process of credit facilities structuring that takes place in the bank.Which of the following statement is TRUE? Select one: O a. None of the other options is correct. O b. Losses on real estate loans are first compensated by the investors in commercial paper issued by the financial institution. O c. In a syndicated loan, a group of lenders shares the return, but not the default risk of the loan Od. When a bank gives a secured loan, the bank has first claim on specific assets of the borrower in the event of a default. Oe. When the repayment probability of a loan is equal to zero, the financial institution investing in this loan faces low credit risk.how the exposure to interest rate risk differs between mortgage companies and other financial institutions?