Word List

mortgage loan – іпотечний кредит

real estate – нерухомість

developer – забудовник

to amortize a loan – погашати позику

servicing rights – права на обслуговування кредиту

be packaged into – бути у складі; package of mortgages – іпотечний портфель

hedge funds – хеджувальні фонди (установи, що займаються зменшенням ризику шляхом укладання протилежної угоди)

mortgage department – відділ іпотечного кредитування

loan production offices – установи іпотечного кредитування

subsidiary – дочірня компанія

variety of terms and options – різні умови кредитування

collateral – застава

down payment – перший платіж по іпотечному кредиту

borrower qualification – вимоги до позичальника

loan term – строк кредиту

lending institution – кредитна установа

to place a lien against the property/ to attach a lien to the title of the property – надавати майну статус закладного

to advise – надавати інформацію

underlying loan – даний кредит

clear title – «чисті» майнові права

loan secured by a lien – позика забезпечена закладною

to file notice of the lien – реєструвати закладну

public recorder’s office – органи державної реєстрації прав

to seize the property – вилучати (конфісковувати) майно

title – право власності на

deed – документ, що підтверджує право власності

title search – перевірка майнових прав

title company – установа, що перевіряє майновий статус

title insurance – страхування майнових прав

encumbrance – закладна, борг, зобов’язання

loan proceeds – позикові кошти

balance due on the loan – залишок до сплати по кредиту

moral hazard – моральна шкода

make up a discrepancy – усувати різницю

grant a loan – надавати кредит

qualify for – відповідати вимогам

gross monthly income – сукупний щомісячний дохід

mortgage loan amortization – погашення іпотечного кредиту

outstanding indebtedness – існуюча заборгованість

outstanding principal balance – залишок по кредиту

Exercise 3. Complete the following scheme.

MORTGAGE MARKETS AND THEIR PARTICIPANTS:

• ______________________________________:

• ____________________________;

• ____________________________;

• ____________________________;

• ___banks____________________.

• ______________________________________:

• ____________________________;

• ____________________________;

• ___investors_________________:

• ___________________________;

• ___________________________;

• ___________________________.

TERMS AND OPTIONS OF MORTGAGES:

• ________________________;

• ________________________:

• ________________________;

• ________________________;

• ________________________;

• ________________________.

• ________________________.

Exercise 4. Translate and memorize the prepositions in the following phrases.

To place a lien against something, to attach a lien to the property, a lien against something, a title to the property, a deed to the property.

Exercise 5. Give Ukrainian equivalents to the following words and word-combinations.

To form a subcategory, to pay sth off, to effectuate mortgage transaction, primary mortgage market, mortgage servicing rights, savings and loan institutions, loan production offices, to be pledged as security, to purchase a piece of property with a loan secured by a lien, to seize the property, a title search, a balance due on the loan, the public recorder’s office, to amortize the loan by its maturity.

Exercise 6. Find in the text English equivalents to the following words and word-combinations. Make up your own sentences using them.

На іпотечних ринках, конкурувати у фінансуванні нерухомості, отримувати іпотечний кредит, основна сума та відсоткові платежі, узгоджувати умови, іпотечні брокери, відсоткова ставка по закладній, кредитна установа, ставати конкурентоспроможнім, дочірні банки, сукупний щомісячний дохід, вільний від обтяжень, перевищувати вартість застави, приватне іпотечне страхування, залишок основного боргу, зробити кредит однаково доступним для всіх позичальників.

Exercise 7. Here are some word-combinations from the text. Match and translate them into Ukrainian.

1.	to compete in	a)	a variety of terms and options
2.	to give the lender the right	b)	full payment of the debt
3.	to choose from	c)	the outstanding indebtedness
4.	to protect the lender from	d)	the value of the collateral
5.	to pay off	e)	to sell the property
6.	to result in	f)	any discrepancy
7.	to exceed	g)	real estate financing
8.	to make up	h)	financial loss

Exercise 8. Economists believe that the interest rate borrowers pay on their mortgages is probably the most important factor in their decision of how much and from whom to borrow. The interest rate on the loan is determined by three factors. Learn more about them. Fill in the gaps with the phrases from the box.

interest rates	discount points
maturity	the lender
long-term funds	the borrower
mortgage rate	the mortgage
the proceeds	interest payments

The interest rate on the loan is determined by three factors: current long-term market rates, the life (term) of______________, and the number of ____________paid.

Market rates. Long-term market rates are determined by the supply of and demand for________________, which are in turn influenced by a number of global, national, and regional factors.

Term. Longer-term mortgages have higher __________________than shorter-term mortgages. The usual mortgage lifetime is either 15 or 30 years. Lenders also offer 20-year loans, though they are not as popular. Because interest-rate risk falls as the term to _______________decreases, the interest rate on the 15-year loan will be substantially less than on the 30-year loan. For exam­ple, in August, 2004, the average 30-year _________________was 6.06%, and the 15-year rate was 5.47%.

Discount points (or simply points) are ________________made at the beginning of a loan. A loan with one discount point means that ________________pays 1% of the loan amount at closing, the moment when the borrower signs the loan paper and receives _____________of the loan. In exchange for the points, ______________reduces the interest rate on the loan.

Exercise 9. A. Match the terms with their definitions.

1.	insurance premiums	a.	a group of mortgages with similar class, interest rate, and maturity characteristics
2.	reserve accounts	b.	the process of taking many individual assets and combining them into a group,or pool,so that investors may buy interests in the pool rather than in the individual assets
3.	mortgage pool	c.	the risk that a borrower will repay a loan before its maturity, depriving the lender of future interest payments
4.	trustee	d.	funds taken out of earnings to provide for anticipated future payments
5.	securitization	e.	an appointed person or institution that manages assets for the benefit of someone else
6.	prepayment risk	f.	payment for insurance

B. Fill in the gaps with the phrases from the box then listen to Jack Peterson, Professor of Economics, talking with his student about the mortgage-backed securities and check your answers.

mortgages	interest rates
lender	mortgage pool
times to maturity	denominations

1. Many institutional investors do not want to deal in such small _______.

2. The second problem with selling _____ in the secondary market was that they were not standardized.

3. They have different ______, interest rates, and contract terms.

4. The ______ must collect monthly payments, often pay property taxes and insurance premiums, and service reserve accounts.

5. A trustee, such as a bank or a government agency, holds the ________, which serves as collateral for the new security; this process is called securitization.

6. If ______ fall and borrowers refinance at lower rates, the securities will pay off early.

C. Listen again and answer the questions.

1. What problems inspired the creation of mortgaged-backed securities?

2. What makes it difficult to bundle a large number of mortgages together?

3. Why are mortgage loans costly to service?

4. What is called a mortgage pool?

5. What is securitization?

6. What is the mortgage pass-through?

7. What happens if borrowers prepay their mortgages?

8. Why have mortgage pools become so popular?

Exercise 10. Check your knowledge of the mortgage markets. Answer these questions.

1. How do the mortgage markets differ from the capital markets?

2. What is a mortgage?

3. What do people take mortgages for?

4. How is the mortgage loan amortized?

5. What is the primary mortgage market?

6. What are the participants of the primary mortgage market?

7. How do the mortgages usually end up?

8. What is the secondary mortgage market?

9. What is the main function of the secondary mortgage market?

10. What are the investors of the secondary mortgage market?

11. Why has the mortgage market become very competitive in recent years?

12. What influences the mortgage loan?

13. What is the mortgage interest rate?

14. What is a collateral?

15. What is a loan term?

16. How is the interest rate on the loan determined by?

17. What is the usual mortgage lifetime?

18. What does a loan with one discount point mean?

Exercise 11. Choose the correct alternative.

For the majority of homeowners / houseowners, the purchase of their property is financed by a mortgage. The bank or building society which lends the money to buy a property is called a mortgage lender / giver or mortgagee. The person who borrows money in the form of a mortgage is called a mortgage borrower/ taker or mortgagor.

There are several different types of mortgage in / on the market.

Probably the most common is a mortgage, in which the capital sum / capital price and the interest are paid in installments / pieces over a long period (for example 25 years).

An alternative is a mortgage, in which the interest is paid, and the capital sum is repaid / paid in another way, for example with an endowment assurance policy. With another type of mortgage, the mortgage borrower's daily / current account is combined with her/his mortgage. Provided the current account is usually in/ with credit, this can reduce the interest repayments on / for the mortgage.

Exercise 12. Choose the correct alternative.

1. Houses, bungalows, apartments, offices, shops and any other type of building you can own are called __________. a. housing b. property c. buildings

2. The __________ are a document which proves who owns a property.

a. owner's deeds b. owner's papers c. title deeds

3. In some countries you can get a mortgage for __________ your annual salary.

a. times five b. five times c. five of

4. If a mortgage borrower ___________ the installments… a. doesn't pay b. defaults on c. fails on

5. …the mortgage lender will eventually __________ the property. a. retake b. take back c. repossess

6. Before a property can be repossessed, the lender must apply to a court for a __________.

a. repossession order b. repossession paper c. repossession document

7. When the lender has a repossession order, the occupants of the property can be __________.

a. evicted b. put out c. ejected

8. Generally, mortgage lenders only repossess as ____________.

a. a desperate action b. a last resort c. the final option

9. A mortgage lender can also be called a mortgagee or a __________.

a. mortgage provider b. mortgage maker c. mortgage producer

10. A mortgage borrower can also be known as a mortgagor or a __________.

a. mortgage owner b. mortgage possessor c. mortgage holder

11. To change your mortgage agreement is to __________ your property.

a. mortgage again b. remortgage c. unmortage

12. A mortgage paid over 25 years is called a __________ mortgage.

a. 25 b. 25 year c. 25 years

13. When somebody's mortgage is the most they can possible afford, you can say they are "mortgaged up to the __________".

a. hilt b. top c. head

14. If property prices go down, and your house is mortgaged for more than its current value, you have __________.

a. negative money b. negative value c. negative equity

15. After you have paid your last mortgage installment, you can say that you have __________ your mortgage.

a. paid out b. paid up c. paid off

Exercise 13.Match the phrases on the left with the alternatives on the right.

1.	apply for a loan	a.	arrange a loan
2.	set up a loan	b.	decide the borrower will never repay the loan
3.	take out a loan	c.	get a loan
4.	pay back a loan	d.	repay the loan in installments
5.	pay off a loan	e.	repay all the loan at once
6.	write off a loan	f.	ask for a loan

Exercise 14. Work in pairs. Discuss advantages and disadvantages of obtaining a mortgage loan. Make up dialogues using words and word-combinations given below.

the purchase of the property	to pay off a loan	to write off a loan
to reduce the interest repayments	annual salary	to apply for a loan
the homeowner	the capital sum	to own a property
to lend the money	a mortgage lender	mortgage agreement

Exercise 15. A. The dialogue below is concerned with the application for credit. Read the dialogue.

Banker: Our discount committee is still discussing your application for credit. I wonder if you’d mind giving us some more information about certain items shown on your balance sheet.

Customer: Not at all.

Banker: Is the mortgage on your fixed assets being amortized?

Customer: Yes. We’re making semi-annual payments on this obligation.

Banker: Your balance sheet shows some indebtedness. Are any of your assets pledged as security?

Customer: No. That’s just an open note.

Banker: Would your company be willing to pledge part of its current assets as collateral security to our loan?

Customer: We wouldn’t object to that. Part of this money will be used to retire present debts and part to expand our operations. Then we can immediately begin to liquidate this new liability.

Banker: I think we’d better prefer that arrangement.