Champions Real Estate Finance 2 Versions Exam With Perfect Questions And Answers 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. - Closing 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. - Servicing 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. - Supply and Demand The process of transferring funds to a title or escrow company for disbursement - Funding Designed to enhance consumer protection and reduce fraud. (Key component of HERA) - The Safe Act Is defined as the sum of currency held by the public and transaction deposits at depository institutions. - M1 Is defined as M1 plus saving deposits, small-denomination time deposits (those issued in amounts of less than $100,000) and retail money market mutual funds shares. - M2 Is currency that is not backed by any precious metals at all. - Fiat Money Is the maintenance of a stable money supply that provides for growth in the economy while keeping inflation in. The federal reserves is responsible for this policy in the United States. - Monetary Policy Federal Government spending. Approved by Congress. At the treasury level, funds can be raised to pay for government spending by raising taxes and increasing borrowing. - Fiscal Policy is the central bank of the United States - Federal Reserve (The Fed) When there is an excess of money supply in the market. - Monetary inflation When there is more money in the market and less goods for sale. - Demand-pull inflation Occurs when the cost of production and offering services increase, thereby causing manufacturers and tradespeople/vendors to rais their prices accordingly. - Cost-push inflation The interest rate charged member banks that borrow from the Federal Reserve Systems - Discount rate Is the rate that the Federal reserve charges banks for unsecured loans, most of which are for a very short term. - Federal Funds Rate 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 appraised value, whichever is lower. - Loan-to-Value Ratio (LTV) Includes both real and personal property ( fixtures and furnishings) - Package Mortgage Covers more than one piece of property. - Blanket Mortgage Method of financing which preserves the low, existing interest rate on the original note. - Wraparound Mortgage Permits additional borrowing on the same note. This is sometimes called a credit card mortgage or a home equity line of credit - HELOC. - Open-End Mortgage