Chapter 13 Sources of Financing

Report
Chapter 13
Sources of Financing
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Financing
• Primary Market – where lenders originate
loans.
• Secondary Market – provides a way for
lenders to sell a loan.
Primary Loan Sources
•
•
•
•
•
•
•
Savings and Loan Associations
Commercial Banks
Life Insurance Companies
Mortgage Companies
Mortgage Brokers
Computerized Loan Origination (CLO)
Municipal Bonds
Secondary Loan Sources
•
•
•
•
FNMA
GNMA
FHLMC
Farmer Mac
The Secondary Mortgage Market
Primary Market
Secondary Market
Mortgage
Lenders
Financial
Intermediaries
Borrowers
Mortgage
Investors
Mortgage Loan Delivery Systems
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.
Other Financing Conditions
• Due-on-Sale – call clause.
• Prepayment - penalty for the right to repay
a loan early.

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