Essentials of Real Estate Finance

by Sirota, David; Barrell, Doris

• ISBN13: 9780793160846
• ISBN10: 0793160847
• Edition: 10th
• Format: Paperback
• Copyright: 2003-04-01
• Publisher: Real Estate Education Co

Summary

70,000 real estate professionals have been trained by Essentials of Real Estate Finance. This text is a practical resource of finance information that agents can refer to and depend on in their day-to-day business. It provides comprehensive coverage of real estate concepts as well as a detailed overview of the industry. Essentials of Real Estate Finance can help students pass their exams, assist professionals advising clients, or help buyers understand what finance options are available.

Table of Contents

Preface	vi
About the Author	vii
About the Consulting Editor	viii
Acknowledgments	ix
The Nature and Cycle of Real Estate Finance	1	(13)
Key Terms	1	(1)
The Nature of Real Estate Finance	1	(2)
Mortgage Lending Activities	3	(3)
Real Estate Cycles	6	(4)
Changes in Real Estate Finance	10	(1)
Summary	11	(2)
Review Questions	13	(1)
Money and the Monetary System	14	(19)
Key Terms	14	(1)
What is Money?	15	(1)
The Federal Reserve System (the Fed)	16	(3)
Instruments of Credit Policy	19	(4)
The United States Treasury	23	(5)
The Federal Home Loan Bank System (FHLB)	28	(1)
Summary	29	(2)
Review Questions	31	(2)
Additional Government Activities	33	(15)
Key Terms	33	(1)
U.S. Department of Housing and Urban Development (HUD)	34	(4)
Other Federal Legislation	38	(3)
State Financing Agencies	41	(1)
Agricultural Lending	42	(1)
The Farm Credit System (FCS)	43	(2)
Summary	45	(1)
Review Questions	46	(2)
The Secondary Mortgage Market	48	(20)
Key Terms	48	(1)
Fannie Mae	49	(8)
Freddie Mac	57	(3)
The Government National Mortgage Association (GNMA)	60	(1)
Other Government Participants	61	(1)
Real Estate Mortgage Investment Conduits (REMICs)	62	(1)
Secondary Market for Junior Financing Loans	63	(1)
Summary	64	(2)
Review Questions	66	(2)
Sources of Funds: Fiduciaries	68	(10)
Key Terms	68	(1)
Commercial Banks	69	(2)
Mutual Savings Banks	71	(1)
Savings Associations/Thrifts	71	(2)
Life Insurance Companies	73	(1)
Pension and Retirement Programs	73	(2)
Credit Unions	75	(1)
Summary	75	(2)
Review Questions	77	(1)
Sources of Funds: Semifiduciary and Nonfiduciary	78	(16)
Key Terms	78	(1)
Semifiduciary Lenders	78	(10)
Nonfiduciary Lenders	88	(2)
Other Lenders	90	(1)
Summary	90	(2)
Review Questions	92	(2)
Instruments of Real Estate Finance	94	(36)
Key Terms	94	(1)
Encumbrances and Liens	95	(1)
Loan Secured by a Real Estate Interest	96	(2)
The Note and Deed of Trust (Trust Deed)	98	(1)
Note and Mortgage	99	(15)
Contract for Deed (Land Contract)	114	(4)
Junior Finance Instruments	118	(3)
Special Provisions in Mortgage Lending Instruments	121	(5)
Summary	126	(2)
Review Questions	128	(2)
Conventional Loans	130	(14)
Key Terms	130	(1)
Interest Rates	130	(3)
Private Mortgage Insurance (PMI)	133	(2)
Permanent/Temporary (Escrow) Buydown Plan	135	(1)
Borrower's Qualifications	136	(2)
Special Conventional Loan Programs	138	(4)
Summary	142	(1)
Review Questions	143	(1)
FHA-Insured Loans	144	(12)
Key Terms	144	(1)
Organization and Requirements	145	(1)
Program Summary	145	(1)
Underwriting Guidelines	146	(5)
Other Frequently Used FHA Loans	151	(1)
Direct Endorsement and Coinsurance	152	(1)
Advantages of the FHA Mortgage	152	(1)
FHA Contributions to Real Estate Finance	153	(1)
Summary	153	(2)
Review Questions	155	(1)
VA-Guaranteed Loans	156	(14)
Key Terms	156	(1)
The United States Department of Veterans Affairs Real Estate Loan Guarantee Program	156	(1)
Program Application	157	(9)
VA Graduated-Payment Mortgage (GPM)	166	(1)
Summary	166	(2)
Review Questions	168	(2)
Processing Real Estate Loans	170	(29)
Key Terms	170	(2)
Qualifying the Borrower	172	(11)
Qualifying the Collateral	183	(9)
Qualifying the Title	192	(3)
Summary	195	(2)
Review Questions	197	(2)
Closing Real Estate Loans	199	(16)
Key Terms	199	(1)
Costs of Securing a Loan	199	(9)
Servicing the Loan	208	(3)
Assignment of the Loan	211	(1)
Summary	211	(2)
Review Questions	213	(2)
Contemporary Real Estate Finance	215	(34)
Key Terms	215	(1)
Interest	216	(2)
Variations in Payments and Interest Rates	218	(2)
Innovative Payment Plans	220	(7)
Variations in Formats	227	(9)
Tax-Free Mortgage Lending	236	(5)
Sale-Leaseback	241	(1)
Seller Refinances Prior to Sale	241	(1)
Trading on Seller's Equity	242	(1)
Equity Participation	242	(1)
Summary	243	(3)
Review Questions	246	(3)
Defaults and Foreclosures	249	(18)
Key Terms	249	(1)
Defaults	250	(2)
Adjustments	252	(3)
Foreclosures	255	(6)
Deficiency Judgements	261	(1)
Tax Impacts of Foreclosure	262	(1)
Auctions	263	(1)
Summary	263	(2)
Review Questions	265	(2)
Glossary	267	(12)
Answer Key	279	(5)
Index	284