Section 876 IAC 2-8-9 - Real estate financingAuthority: IC 25-34.1-2-5
Affected: IC 25-34.1-5
Sec. 9.
(a) The competency and instructional level for subdivisions (1), (2)(A) through (2)(B), (2)(E), and (3) through (5) is Level 2. The competency and instructional level for subdivisions (2)(C) through (2)(D) is Level 3. The following are concepts of mortgages: (1) The following are basic mortgage terms and concepts: (A) Definitions: mortgage, mortgagor/mortgagee; trustee, beneficiary, grantor.(B) Right (equity) of redemption.(C) Foreclosure and statutory redemption period.(2) The mortgage note provisions as follows: (A) Essential elements of a valid note.(B) Special note provisions as follows: (ii) Prepayment penalty clause.(iii) Due-on-sale clause.(C) Principal and interest (debt service) provisions as follows: (ii) Basic computations of simple interest.(iii) Determining monthly principal and interest payment.(D) Payment (amortization) plans as follows: (ii) Adjustable (or variable) interest rate plans.(iii) Graduated payment plans.(vi) Balloon payment plans.(vii) Shared appreciation plans.(E) Negotiability of note.(3) The mortgage instrument provisions as follows (Use sample form for illustration.): (B) Parties to mortgages.(4) The following rights of mortgage lenders: (A) Right to foreclosure provisions as follows: (i) Foreclosure methods as follows: (BB) Power of sale (nonjudicial).(ii) Deficiency judgment.(B) Right to transfer (assign) the mortgage.(5) The following rights of borrowers: (B) Right (equity) of redemption.(b) The competency and instructional level for subdivisions (1) through (3) is Level 3. The following are concepts of sales of mortgaged property: (2) Assumption of existing mortgage. (Release of liability and restoration of benefits on VA mortgage.)(3) Purchase subject to existing mortgage.(c) The competency and instructional level for subdivisions (1)(A) through (1)(B) is Level 3. The competency and instructional level for subdivisions (1)(C) through (1)(E) is Level 2. The competency and instructional level for subdivision (2) is Level 1. The following are concepts of types of mortgages: (1) The following major types (by lending source): (A) Conventional mortgage loans including the following: (i) Definition and availability.(ii) Insured versus noninsured.(iii) General characteristics and interest rates.(B) FHA mortgage loans including the following: (i) Historical and present role of the FHA.(ii) Definition and availability.(iii) General characteristics (including maximum loan amount).(iv) FHA loan programs including the following: (AA) Section 203(b), home mortgages.(BB) Section 234(c), condominium mortgages.(CC) Sections 245(a) through (b), graduated payment mortgages.(vi) Advantages/disadvantages.(C) VA mortgage loans including the following: (i) Historical and current role of the VA.(ii) Eligibility requirements.(iii) Amount of guarantee or entitlement.(iv) Characteristics (including interest rates, discount points, and maximum loan amount).(v) Advantages/disadvantages.(D) FmHA mortgage loans including the following: (i) Historical and current role of FmHA.(ii) Eligibility requirements.(iii) Characteristics (including interest rates).(E) Purchase money mortgages (from buyer to seller).(2) Other types as follows (by loan characteristics) (Cover basic definitions, characteristics, and uses.): (d) The competency and instructional level for subdivisions (1) through (2) is Level 2. The following are concepts of mortgage priorities: (1) Effect and importance of recordation.(2) Subordination of mortgages.(e) The competency and instructional level for subdivisions (1) through (2) is Level 1. The following are concepts of major sources of real estate financing (the primary mortgage market) (Explain the role of each in providing real estate financing.): (1) The following direct sources (primary mortgage market): (A) Savings and loan associations.(D) Mortgage companies (mortgage bankers).(G) Miscellaneous (government agencies, credit unions, and employers).(H) Indiana housing authority.(f) The competency and instructional level for subdivisions (1) through (4) is Level 1. The competency and instructional level for subdivision (5) is Level 3. The following are concepts of the secondary mortgage market (Explain how the secondary market functions and the role of its major participants.): (1) Federal National Mortgage Association (FNMA).(2) Government National Mortgage Association (GNMA).(3) Federal Home Loan Mortgage Corporation (FHLMC).(4) Private mortgage insurers.(5) Discount points and yield (including computations).(g) The competency and instructional level for subdivisions (1), (2)(A)(i) through (2)(A)(iv), and (2)(B) through (2)(D) is Level 2. The competency and instructional level for subdivisions (2)(A)(v) and (3) is Level 3. The following are concepts of residential lending practices and procedures: (1) Loan application procedures. (Use sample form for illustration.)(2) Loan underwriting practices as follows: (A) Borrower analysis ("qualifying a buyer/borrower") including the following: (i) Credit characteristics.(ii) Adequacy of assets to close the transaction.(iii) Stability of income.(iv) Types of acceptable income.(v) Adequacy of income. (Student should be afforded practice in applying the expense/income ratios for conventional and FHA loans and the residual income standards for VA loans to hypothetical fact situations.)(B) Property analysis including the following: (ii) Title opinion and title insurance.(C) Loan analysis including the following: (i) Yield (interest rate and discount points).(iii) Loan-to-value ratio.(D) Loan commitment and closing.(3) Prequalification of buyer by real estate agent. (Student should be afforded practice in prequalifying hypothetical prospective buyers.)(h) The competency and instructional level for subdivisions (1) through (2) is Level 1. The following are concepts of financing legislation (federal): (1) Truth-in-Lending Act and the Truth-in-Lending Simplification and Reform Act (TILSRA), as implemented by Regulation Z of the Federal Reserve Board including the following: (A) Basic purpose and applicability.(B) Disclosure of credit information.(C) Applicability to "arrangers of credit".(D) Disclosures of credit terms in advertising the sale of real estate.(2) The Equal Credit Opportunity Act (ECOA) implemented by Regulation B of the Federal Reserve Board including the following: (B) Basic provisions and requirements.Indiana Real Estate Commission; 876 IAC 2-8-9; filed Dec 1, 1989, 5:00 p.m.: 13 IR 644; readopted filed Jun 29, 2001, 9:56 a.m.: 24 IR 3824; readopted filed Jul 19, 2007, 12:57 p.m.: 20070808-IR-876070067RFA; readopted filed November 25, 2013, 9:21 a.m.: 20131225-IR-876130283RFA