California Real Estate Finance

by BOND

• ISBN13: 9780324143720
• ISBN10: 0324143729
• Edition: 7th
• Format: Paperback
• Copyright: 2002-05-23
• Publisher: South-Western Educational Pub

Summary

Master the basics of real estate finance with CALIFORNIA REAL ESTATE FINANCE! With a focus on real estate financing for the home buyer, this practical real estate text provides you with the tools you need to succeed. Studying is made easy with a complete glossary and section on the use and application of the financial calculator to solve real estate math problems. Coverage includes common mortgage problems, types of lenders, financing options, and much, much more!

Table of Contents

Preface	xiii
Introduction to Real Estate Finance	1	(30)
Preview	1	(1)
Welcome to the Real World of Real Estate Finance	1	(3)
Short Overview of the Mortgage Market	4	(1)
The Meaning of Money	4	(2)
The Flow of Money and Credit into the Mortgage Market	6	(2)
Federal Control of the Money Supply	8	(6)
Cost Characteristics of the Mortgage Market	14	(5)
Instruments of Real Estate Finance	19	(4)
The Five-Step Financing Process	23	(8)
Summary	24	(1)
Important Terms and Concepts	25	(1)
Reviewing Your Understanding	25	(1)
Questions for Discussion	25	(1)
Multiple-Choice Questions	26	(3)
Additional Resources	29	(2)
Institutional Lenders	31	(22)
Preview	31	(2)
Savings Banks	33	(2)
Commercial Banks	35	(4)
Life Insurance Companies	39	(2)
Mutual Savings Banks	41	(1)
Depository Institutions and Monetary Control Act	42	(1)
Pension and Retirement Funds	43	(1)
Government Regulatory Agencies	44	(1)
Trade Associations	45	(8)
Summary	46	(1)
Important Terms and Concepts	47	(1)
Reviewing Your Understanding	48	(1)
Questions for Discussion	48	(1)
Multiple-Choice Questions	48	(5)
Noninstitutional Lenders and the California Real Property Loan Law	53	(24)
Preview	53	(1)
Private Party Lenders	54	(3)
Usury Law	57	(1)
Mortgage Companies	58	(2)
Real Property Loan Law	60	(5)
Syndications	65	(1)
Real Estate Investment Trusts and Endowment Funds	66	(2)
Credit Unions and Finance Companies	68	(1)
Financial Advisory Role of the Broker	69	(8)
Summary	70	(1)
Important Terms and Concepts	71	(1)
Reviewing Your Understanding	71	(1)
Questions for Discussion	71	(1)
Multiple-Choice Questions	72	(3)
Additional Resources	75	(2)
Adjustable Rate and Other Alternative Mortgage Instruments	77	(26)
Preview	77	(1)
Objectives and Rationale	78	(1)
Adjustable Rate Mortgages (ARMs)	79	(8)
Convertible Rate Loans	87	(2)
Loans Amortized for 30 Years, but Due in 5 or 7 Years	89	(1)
Reverse Annuity Mortgage (RAM)	90	(2)
Miscellaneous Alternative Plans	92	(2)
Epilogue	94	(9)
Summary	95	(1)
Important Terms and Concepts	96	(1)
Reviewing Your Understanding	96	(1)
Questions for Discussion	96	(1)
Multiple-Choice Questions	97	(3)
Additional Resources	100	(3)
Conventional Loans	103	(26)
Preview	103	(1)
What Is a Conventional Loan?	104	(4)
Keeping Up with Lender Policies	108	(4)
Buy-Down Loans	112	(2)
Low Down Payment Conventional Loans	114	(1)
California Fair Lending Regulations	115	(3)
Mortgage Insurance	118	(11)
Summary	123	(1)
Important Terms and Concepts	124	(1)
Reviewing Your Understanding	124	(1)
Questions for Discussion	124	(1)
Multiple-Choice Questions	124	(5)
Government-Backed Financing	129	(28)
Preview	129	(1)
Federal Housing Administration	130	(6)
Department of Veterans Affairs	136	(12)
Cal-Vet Loans	148	(9)
Summary	152	(1)
Important Terms and Concepts	153	(1)
Reviewing Your Understanding	153	(1)
Questions for Discussion	153	(1)
Multiple-Choice Questions	153	(4)
Points, Discounts, and the Secondary Mortgage Market	157	(22)
Preview	157	(1)
Points and Discounts	158	(5)
Secondary Mortgage Market	163	(16)
Summary	172	(1)
Important Terms and Concepts	172	(1)
Reviewing Your Understanding	173	(1)
Questions for Discussion	173	(1)
Multiple-Choice Questions	173	(3)
Additional Resources	176	(3)
Qualifying the Property	179	(32)
Preview	179	(1)
What Does Qualifying the Property Mean?	180	(3)
Appraising a Property	183	(5)
Using a Standard Appraisal Form	188	(9)
Underwriting the Loan	197	(1)
Planned Unit Developments and Condominiums	198	(2)
Influence of the Financial Institutions Reform, Recovery and Enforcement Act (FIRREA) on Appraisals	200	(3)
Working with Appraisers: The Do's and Don'ts	203	(8)
Summary	204	(1)
Important Terms and Concepts	205	(1)
Reviewing Your Understanding	205	(1)
Questions for Discussion	205	(1)
Multiple-Choice Questions	206	(3)
Additional Resources	209	(2)
Qualifying the Borrower	211	(30)
Preview	211	(1)
Ability or Capacity to Pay: A Case History	211	(3)
How Lenders Qualify Prospective Borrowers	214	(1)
Capacity to Pay	214	(4)
Qualifying Under Government-Backed Loans	218	(5)
What Is Income?	223	(3)
Co-Borrowing	226	(1)
After Income, What Then?	227	(2)
Desire to Pay	229	(3)
Working with Lenders	232	(9)
Summary	234	(1)
Important Terms and Concepts	235	(1)
Reviewing Your Understanding	235	(1)
Questions for Discussion	235	(1)
Multiple-Choice Questions	236	(3)
Additional Resources	239	(2)
Processing, Closing, and Servicing Real Estate Loans	241	(38)
Preview	241	(1)
Processing the Loan	242	(10)
How Is a Loan Approved?	252	(2)
Closing the Loan	254	(13)
After the Loan: Rights and Responsibilities	267	(2)
Handling Loan Takeovers	269	(10)
Summary	270	(1)
Important Terms and Concepts	271	(1)
Reviewing Your Understanding	271	(1)
Questions for Discussion	271	(1)
Multiple-Choice Questions	272	(3)
Additional Resources	275	(4)
Foreclosures and Other Lending Problems	279	(32)
Preview	279	(1)
Collateral Provisions of Deeds of Trust	280	(1)
Default and Foreclosure	281	(9)
Minimizing Loan Defaults	290	(8)
Other Lending Problems	298	(13)
Summary	302	(1)
Important Terms and Concepts	302	(1)
Reviewing Your Understanding	303	(1)
Questions for Discussion	303	(1)
Multiple-Choice Questions	304	(3)
Additional Resources	307	(4)
Construction Loans	311	(28)
Preview	311	(1)
Nature of Construction Loans	312	(3)
Evaluation and Lending Process	315	(5)
Take-Out or Permanent Loans	320	(11)
Public Construction	331	(8)
Summary	332	(1)
Important Terms and Concepts	333	(1)
Reviewing Your Understanding	333	(1)
Questions for Discussion	333	(1)
Multiple-Choice Questions	334	(5)
Basic Mathematics of Real Estate Finance	339	(50)
Preview	339	(1)
Review of the Basic Components of a Real Estate Loan	340	(4)
The Real World of Financial Calculators and Computers	344	(1)
Illustrated Use of Texas Instruments BA Real Estate Calculator	345	(9)
Annual Percentage Rates	354	(35)
Summary	356	(1)
Important Terms and Concepts	356	(1)
Reviewing Your Understanding	356	(1)
Questions for Discussion	356	(1)
Multiple-Choice Questions	357	(3)
Additional Resources	360	(29)
Creative Financing Approaches	389	(42)
Preview	389	(1)
Secondary Financing Techniques	390	(8)
All-Inclusive Trust Deed (AITD)	398	(10)
Installment Sales Contract	408	(3)
Lender Participations	411	(1)
Sale-Leaseback	412	(4)
Open-End Trust Deed	416	(1)
Commercial Loan	417	(1)
Stock Equity	418	(1)
Blended-Rate Loans	418	(2)
Creative Financing Disclosure Act	420	(1)
Imputed Interest	421	(10)
Summary	425	(1)
Important Terms and Concepts	426	(1)
Reviewing Your Understanding	426	(1)
Questions for Discussion	426	(1)
Multiple-Choice Questions	426	(5)
Financing Small Investment Properties	431	(28)
Preview	431	(1)
The Single-Family House as Income Property	432	(3)
The Two- to Four-Unit Residential Property	435	(2)
Apartment House Investments: 5 to 24 Units	437	(4)
Break-Even Analysis	441	(2)
Financing Starts with the Listing	443	(4)
Introduction to Commercial and Industrial Properties	447	(3)
Debt Coverage Ratio	450	(9)
Summary	452	(1)
Important Terms and Concepts	452	(1)
Reviewing Your Understanding	453	(1)
Questions for Discussion	453	(1)
Multiple-Choice Questions	453	(4)
Additional Resources	457	(2)
Glossary	459	(16)
Answers to Multiple-Choice Questions	475	(4)
Index	479