6) Conforming mortgages should meet the three underwriting standards of federal

Question

6) Conforming mortgages should meet the three underwriting standards of federal agencies such as Fannie Mae or Freddie Mac, which is not one of the standards

a) A max loan amount

b) A max PTI ratio

c) A max reference rate

d) A max LTV ratio

7) Suppose that an investor in the 40% marginal tax bracket is considering the acquisition of a tax exempt (state and federal income tax exempt) municipal bond that offers a yield of 6.5%. Assume that your state income tax rate is 10%. What is the equivalent taxable yield?

Explanation / Answer

6) . C : a Max Reference rate

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