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Cards In This Set
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What is the primary market
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Where mortgages ae originated. Borrowers who wish to get a loan come to mortgage lenders
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What is the secondary market
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Where mortgage lenders, GSEs and investors buy and sell existing mortgages
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What is a note (promissory)?
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A note is the general term for any kind of paper document signed by a borrower that is an acknowledgment of the debt and is, by inference, a promise to pay. When the note is secured by a mortgage, it is called a mortgage note and the mortgagee is named as the payee.
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In the Money Market, what is a short-term credit? and give examples
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What are Fed Funds
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Overnight funds from bank to bank
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What is a Discount window
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If you are a bank and need to borrow funds, troubled institution, Fed has a number of different gauges that hey can adjust to control the flow of moneyq
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What are treasury bills?
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Anything up to one year
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What are notes
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Up to and including 10 years
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What are bonds
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Greater than 10 years
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In the capital market, what is a long-term credit and name examples
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What are the differences between debt and equity investments?
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Mortgage investments are investments in debt payments for real property. Stocks are investments in equity- shares in a company
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Define Yield
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Yield, stated as a percentage, measures the amount of cash flow a mortgage will generate and has inherent in its number the timing of the cash flow and the potential for default on the mortgage
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Where are rates in the short term and the long term markets and what is the yield?
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If positive, the yield curve goes from left to right and is higher on the right. If it moves from higher to lower on the right, this known as an inversion or inverted yield curve. This means that rates are higher in the short term and lower in the long term.
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What are the four reasons that the secondary market plays such an important role in the national economy
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What are a couple factors that have helped attract new investors to the secondary market
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