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Real Estate Principles Real Estate: An Introduction To The Profession

The document discusses sources of financing for real estate. It describes the primary market, where lenders originate loans, and the secondary market, where lenders can sell loans. The primary sources of loans are savings and loans associations, commercial banks, life insurance companies, mortgage companies, mortgage brokers, and municipal bonds. The secondary sources are FNMA, GNMA, FHLMC, and Farmer Mac. The document also discusses usury laws, due-on-sale clauses, prepayment penalties, and key terms related to real estate financing.

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36 views

Real Estate Principles Real Estate: An Introduction To The Profession

The document discusses sources of financing for real estate. It describes the primary market, where lenders originate loans, and the secondary market, where lenders can sell loans. The primary sources of loans are savings and loans associations, commercial banks, life insurance companies, mortgage companies, mortgage brokers, and municipal bonds. The secondary sources are FNMA, GNMA, FHLMC, and Farmer Mac. The document also discusses usury laws, due-on-sale clauses, prepayment penalties, and key terms related to real estate financing.

Uploaded by

denden007
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PPT, PDF, TXT or read online on Scribd
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Real Estate Principles

Ninth Edition

Real Estate:
An Introduction to the Profession
Ninth Edition

By Charles J. Jacobus
South-Western Publishing©2002

South-Western Publishing©2002
Chapter 13
_______________________________________

Sources of Financing

South-Western Publishing©2002
Financing

• Primary Market – where lenders originate


loans.
• Secondary Market – provides a way for
lenders to sell a loan.

South-Western Publishing©2002
Primary Loan Sources

• Savings and loan Associations


• Commercial Banks
• Life Insurance Companies
• Mortgage Companies
• Mortgage Brokers
• Municipal Bonds

South-Western Publishing©2002
Secondary Loan Sources

• FNMA
• GNMA
• FHLMC
• Farmer Mac

South-Western Publishing©2002
The Secondary Mortgage Market
Primary Market Secondary Market

Mortgage Financial
Lenders Intermediaries

Mortgage
Borrowers
Investors

South-Western Publishing©2002
Mortgage Loan Delivery Systems

South-Western Publishing©2002
Usury

• State legislation that imposes an interest rate


ceiling on loans.
• U.S. Congress passed legislation that exempts
from state usury limits most first lien home
loans made by institutional lenders.

South-Western Publishing©2002
Other Financing Conditions

• Due-on-Sale – call clause.


• Prepayment- penalty for the right to repay a
loan early.

South-Western Publishing©2002
Key Terms
• Alienation clause • Mortgage broker
• Automated underwriting • Mortgage company
system • Participation certificates
• Computerized loan • Primary market
origination • Secondary market
• Disintermediation
• Usury
• Fannie Mac

South-Western Publishing©2002

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