Chapters 3 and 4
Viridiana 
02/18/2024
Huber, W.
Chapters 3 and 4
Summary
Chapter 3 discussed the various sources of loan funds available for real estate loans. There are several lenders in the market for real estate loans that have been around since the establishment of the original building and loan societies in the 1830s, as mentioned in Huber (p. 47). Moving on to Chapter 4, it delved into the secondary mortgage market. I will provide further details about these two chapters in my key concepts.
Key Concept from Chapter 4
According to Huber, the Secondary Mortgage Market is a marketplace where existing loans and servicing rights are sold and bought between mortgage originators, mortgage aggregators (securitizers), and investors (p. 69). In this market, new mortgage loans are frequently sold by secondary mortgage companies. Lenders who are involved in the secondary mortgage market buy mortgages from originators by selling bonds to raise funds (Huber, p. 69).
Key Concept from Chapter 3
Savings banks and commercial banks, also known as savings institutions, share many similarities. Savings banks typically lend most of their mortgages to single family residents, while mutual savings banks lend more to commercial property. According to Huber, mutual savings banks play an active role in local real estate financing activities by providing long-term mortgage loans. They derive over 70% of their assets from savings accounts, which have a long-term quality.
Key Concept from Chapter 3
An equity loan is a type of loan that homeowners can obtain based on the equity of their property. This loan is essentially borrowing money against the value of the home, which places a lien on the property until the loan is fully repaid. According to Huber, an equity loan is typically considered secondary financing because there is typically already at least one prior loan against the property. The first or priority lien on real estate is known as primary financing. (Huber, p. 61).
Summary
These two chapters provide a thorough understanding of real estate lending. The process of buying or selling a home can be influenced by numerous factors. However, we do know that there are several types of loans available for purchasing property.
by Viridiana Zepeda