HUD Certification Exam Flashcards

HUD Certification Exam Flashcards AnnualCreditReport.comWhere does a client go to get a free credit report?Type of loan that may be a good fit for those that have a poor credit history and/or are ineligible for other loans Subprime Mortgage Loan Fair Housing Assistance Program (FHAP)Provides annual funding to state and local agencies that enforce fair housing laws that are substantially equivalent to the Fair Housing Act. These funds go towards an agency's capacity building, administrative costs, investigative and enforcement efforts, training and other projects designed to support enforcement of fair housing law.Per FHA, you are considered self-employed if you have ___% or greater ownership interest in a business.25% The midpoint in the family income range for a metropolitan statistical area of for the non-metropolitan parts of a state Area Median Income Back-End RatioA rate that calculates a borrower's total monthly debt, including housing and other debt obligations, as a percentage of gross monthly income.Association DuesCharged by community or Homeowners Association to pay for repairs, upkeep, landscaping, improvements and property management.When must your lender terminate PMI?78% or at midpoint of the loan. You can request earlier once principal balance falls below 80% of original loan value Marketing AnalysisAim is to identify groups of people who would benefit most if targeted by the campaign, the characteristics of these people, and their expectations.Subprime Mortgage LoansA type of mortgage with less stringent lending and underwriting terms and conditions, usually offered to borrowers with blemished or limited credit histories.CharacterCredit history, employment history, and housing stability to determine the likeliness that the borrower will repay their debts Homeowners InsuranceAn insurance policy that can provide coverage for damages to a dwelling and contents that belong to the homeowner.Affordable front-end ratio for renters30% Fair Credit Billing Act (FCBA)Which federal law protects a consumer's right to dispute a billing error associated with his/her credit card account.Ground RentAn arrangement in which the owner of a dwelling or structure does not own the land on which the structure resides.

Mortgage Insurance Premium (MIP)A monthly payment, usually part of the mortgage payment for FHA loans, paid by a borrower for mortgage insurance.EscrowFunds to be used for specific purposes by parties carrying out a mutual transaction, deposited with a third party.What is the purpose for the Veterans Affairs Supportive Housing (VASH) program To end veterans homelessness CollateralLenders often request a borrower to pledge specific property or assets as collateral to secure repayment of loan.Balloon PaymentsAn oversize payment due at the end of a mortgage Front-end RationA rate that calculates a borrower's housing-related obligations as a percentage of gross monthly income. AKA

• Housing Ratio

Type of mortgage may be a good fit for eligible veterans, suitable credit and sufficient income and have a certificate of eligibility.VA Loan Civil Rights Act of 1968Following the assassination of Dr. Martin Luther King Jr., Congress passed what monumental piece of legislation, which prohibits discrimination in housing sales, rentals, and financing based on race, color, national origin, religion, sex, disability and familial status?Conventional LoanA mortgage loan backed by private lenders. Loans with a DP less than 20% of purchase price may require private mortgage insurance (PMI) Fair and Accurate Credit Transactions Act (FACTA) You have the right to a free annual credit report.7The Fair Housing Act, as amended, protects how many characteristics?CapacityLender considers consistency of employment and income, adequacy of income to repay debt, recurring debts and frequency and type of wages Profit and Loss StatmentsA summary of revenue, costs, and expenses incurred during a defined period, such as a fiscal year.Know Before you Owe (TRID)requires easier to use mortgage disclosure forms that clearly outline the terms of the mortgage to the borrower and provide detailed explanations about how form should be completed and used.

Types of CreditCredit: Variety of accounts (e.g. credit card, auto loan,

mortgage) Pre-Payment PenaltyA provision in some loans that charges a fee to a borrower who makes mortgage payments ahead of schedule.CapitalLenders inquire about how much money a borrower has saved to pay a deposit or down payment for the home intended to purchase.

Amounts OwedCredit: Ratio of total credit extended to the amount of credit

owed.

Public Housing AgenciesA state, county, municipality, or other government agency that develops or operates low-income housing.Adjusted Gross IncomeGross income minus adjustments, or reductions, that one is eligible for, such as deductions for unreimbursed business expenses, tuition and fees, and contributions to certain retirement accounts.NSF FeeFee charged if there is not enough money in an account to cover a check payment of other purchase.CD; Money Market; High-Interest AccountExamples of accounts that would be ideal for short-term large purchase savings The Know Before you Owe rule combined the Good Faith Estimate and the Truth in Lending disclosure and became what document?Loan Estimate If client has a project based voucher and moves out of the unit, do they lose the voucher assitance?Yes Energy Efficient Mortgage (EEM)Assists individuals to purchase an energy efficient home or refinance a home to make energy efficient improvements

New CreditCredit: Number of recent credit inquiries, as well as new

credit accounts.Personal InformationThe section of the credit report that contains employer details.Consumer RightsThe section of the credit report that contains information about how to correct inaccuracies.

Account HistoryCredit: Payment history of accounts, including late

payments, delinquencies, judgments, and liens.DefaultThe inability to make timely payments or fulfill legal obligations of loan terms.Fair Market RentA determination of the monthly rent of a rental property, calculated by HUD. Factored by geography and unit size, sets payment standards for public housing programs InquiriesThe section of the credit report that will show recent attempts to open a credit card.Truth in Lending Act (TILA)Requires lenders disclose important information to protect consumers againstinaccurate and unfair loan billing and credit card practices, it requires lenders to provideconsumers with loan cost information so that they can comparison shop.Overdraft FeeFee charged when an account doesn't have money to cover a purchase and the financial institution loans money to complete the payment.Home Equity LoanProvides a lump sum of money for home improvements - often referred to as a second mortgage Real Estate Settlement Procedures Act (RESPA) Prohibits certain abusive practices that increase the cost of settlement services. Requires mortgage transaction disclosures that describe closing costs, lender servicing

and escrow account practices, and business relationships Discount PointsA type of pre-paid interest normally paid at closing and generally calculated to be equivalent to 1% of the total loan