COURSE TITLE:
RELE 1219-271 REAL ESTATE FINANCE
SEMESTER/YEAR:
FALL SEMESTER 2013
COURSE DATES:
2nd Eight Weeks – Fast Track
INSTRUCTOR:
Al Sechrist
OFFICE LOCATION: SPC Lubbock, ATC 3201 Avenue Q, Room 157
OFFICE HOURS:
Monday thru Thursday 1:00 – 2:00 PM and 3:30 – 5:30 PM
email ADDRESS:
asechrist@southplainscollege.edu
OFFICE PHONE:
(806) 716-4653
COURSE
DESCRIPTION:
This course is an overview of the U.S. monetary system, primary
and secondary money markets, sources of mortgage loans,
federal government programs, loan applications, processes and
procedures, closing costs, alternative financial instruments, laws
affecting mortgage lending, and State Housing Agency.
COURSE LEARNING
OUTCOMES:
The student will discuss various types of financing with clients
and customers; explain the function of the primary and secondary
money markets; list the types of lenders and explain the types of
loans they provide; quality the buyer and the property using
lender guidelines; and calculate net sheets for both parties in a
real estate transaction.
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GENERAL INFORMATION
I.
TEXTS AND OTHER MATERIALS
Wiedemer, John P., Baker, J. Keith. REAL ESTATE FINANCE. Ninth Edition.
(2013). Englewood Cliffs, New Jersey: Cengage, ISBN 1-133-58907-3
II.
ATTENDANCE POLICY
Punctual and regular class attendance is required. Whenever absences become
excessive and, in the instructor's opinion, minimum course objectives cannot be
met due to absences, the student will be withdrawn from the course. No student
will receive credit for the course if he/she does not attend a minimum of twothirds of the total class time. When an unavoidable reason for a class absence
arises, the instructor may permit the student to make up work missed. In such
case it is the student's responsibility to complete work missed within a
reasonable period of time as determined by the instructor.
III.
EXAMINATION POLICY
There will be four examinations, including a final examination, generally
composed of objective (multiple choice and true or false) questions. From time
to time pop quizzes may be given. Examination bonus questions may be given,
if so, they will generally be essay type questions.
IV.
GRADING POLICY
The student's final grade will be derived as follows: Examinations 80%, Class
Participation 20%. Class participation grade will be based on attendance,
participation in discussions, and pop quizzes if any. Each absence, tardy, or
leaving at break will subtract from participation grade. Each examination
including the final will count equally toward the student's final grade. The
students's final letter grade will be determined by the following scale: 90-100 =
A, 80-89 = B, 70-79 = C, 60-69 = D, and 59 and below = F.
V.
ASSIGNMENT POLICY
At each class meeting, you should have read and understand the material in the
chapter or chapters to be covered and be prepared to discuss this material.
VI.
COURSE OBJECTIVES
A.
By actively participating in this course the student will know and
understand the common terminology of real estate finance and will be
able to demonstrate that knowledge on the examinations with a passing
grade.
B.
The student will be able to identify the fundamental principles of real
estate finance as determined on the examinations.
C.
The successful student will, at the completion of this course, be able to
understand and explain real estate financing and related tax aspects of
homeownership.
D.
Students will be able to list on an examination, the sources of real estate
financing, including the types of loans and both the primary and the
secondary money markets.
E.
The student should be able to identify the process of mortgage law, loan
terms, interest rates, amortization, constructions loans, operations of
mortgage loan investors, the role of government agencies in real estate
finance, servicing of loans and the foreclosure process.
F.
The student will understand and be able to explain where to go with a
homebuyer to obtain a loan and know what to expect from the lender in
processing the loan application.
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CONTENT OUTLINE
I.
II.
First eight classroom hours
A.
Course Introduction (C 1,2,3,5,6,9)(F 1,5,6,10,15)
Objectives: 1. Familiarize students with each other & instructor
2. Discuss license requirements
3. Outline the course & policies
4. Discuss the real estate business in general
5. Importance of real estate finance
B.
Chapter 1 (C 3,5,6,7,9)(F 1,5,9,10,11)
History and Background
Objectives: 1. Early Financing Methods
2. Development of Mortgage Banking
3. The Changing Mortgage Market
C.
Chapter 2 (C 3,5,6,7,9)(F 1,5,9,10,11)
Money and Interest Rates
Objectives: 1. Federal Reserve Bank System
2. The United States Treasury
3. Interest Rates
D.
Chapter 3 (C 3,5,6,7,9)(F 1,5,9,10,11)
Mortgage Money: Regulated Lenders
Objectives: 1. The Mortgage Credit Market
2. The Mortgage Money Market
3. The Primary Market
4. Regulated Lenders
E.
Chapter 4 (C 3,5,6,7,9)(F 1,5,9,10,11)
Other Primary Market Lenders
Objectives: 1. Mortgage Companies
2. Government Loan Programs
3. Other Primary Market Lenders
Second eight classroom hours
A.
Review Chapters 1-4 and First Exam (C 4,5,6,7,16)(F 1,2,5,8,9,10,11,17)
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III.
B.
Chapter 5 (C 3,5,6,7,9)(F 1,5,9,10,11)
Mortgage Money: The Secondary Market
Objectives: 1. Expansion of the Secondary Market
2. Selling Mortgage Loans
3. Procedures Used in Secondary Markets
4. Federal Underwriting of Mortgage Pools
5. Loan Pools
C.
Chapter 6 (C 3,5,6,7,9)(F 1,5,9,10,11)
The Mortgage Documents
Objectives: 1. Mortgage Instruments & Procedures
2. Subordination
3. Conforming Loans
D.
Chapter 7 (C 3,5,6,7,9)(F 1,5,9,10,11)
Mortgage Repayment Plans
Objectives: 1. Fixed-Interest, Constant-Level Plan
2. Adjustable Rate Mortgages (ARM)
3. Graduated Payment Mortgage (GPM)
4. Balloon Payment Note
5. Shorter-Term Loans
6. Other Alternative Plans
E.
Chapter 8 (C 3,5,6,7,9)(F 1,5,9,10,11)
Federal Government Underwriting Programs
Objectives: 1. HUD/FHA
2. VA
Third eight classroom hours
A.
Review Chapters 5-8 and Second Exam (C 4,5,6,7,16)(F
1,2,5,8,9,10,11,17)
B.
Chapter 9 (C 3,5,6,7,9)(F 1,5,9,10,11)
Borrower Qualification
Objectives: 1. Federal Fair Housing Acts
2. Texas Fair Housing Law
3. Equal Credit Opportunity Act
4. The Loan Application
5. Financial Evaluation of the Borrower
6. Credit Reports & Qualifying the Applicant
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IV.
C.
Chapter 10 (C 3,5,6,7,9)(F 1,5,9,10,11)
Property Analysis
Objectives: 1. Property Appraisals
2. Property Characteristics
3. Mobile Homes
4. Surveys & Legal Descriptions
D.
Chapter 11 (C 3,5,6,7,9)(F 1,5,9,10,11)
Commercial Loans: Construction and Land Loans
Objectives: 1. Preparation of Financial Statements
2. Property Evaluation
3. Land Loans
E.
Chapter 12 (C 3,5,6,7,9)(F 1,5,9,10,11)
Commercial Building and Farm Loans
Objectives: 1. Information Sources
2. Apartment Buildings
3. Retail Store Buildings
4. Shopping Centers, etc
Fourth eight classroom hours
A.
Review Chapters 9-12 and Third Exam (C 4,5,6,7,16)(F
1,2,5,8,9,10,11,17)
B.
Chapter 13 (C 3,5,6,7,9)(F 1,5,9,10,11)
Other Financing Practices
Objectives: 1. Home-Builder Commitments
2. Loan-to-Value Ratio
3. Dollar Amount of Loan
4. Land Leases
5. SEC Regulations
6. Seller-Financed Home Mortgages
7. Refinancing
8. Title Protection
9. Foreclosure
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C.
Chapter 14 (C 3,5,6,7,9)(F 1,5,9,10,11)
Technology Advances in Mortgage Lending
Objectives: 1. CLO
2. Automated Underwriting
3. Credit Scoring
7. Disbursement of Funds
D.
Chapter 15 (C 3,5,6,7,9)(F 1,5,9,10,11)
Environmental Issues
Objectives: 1. Environmental Assessments
2. Environmental Requirements
3. Energy-Efficient Buildings
E.
Chapter 16 (C 3,5,6,7,9)(F 1,5,9,10,11)
Settlement Procedures
Objectives: 1. RESPA
2. Truth-in-Lending Act
3. Settlement Practices and Cost
4. Final Closing Instructions
5. Disbursement of Funds
F.
Course Wrap-up and Review for Final Examination
G.
FINAL EXAMINATION Chapters 13-16 (C 4,6,7)(F 1,2,5,7,8,10,11,16)
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SCANS COMPETENCIES
C-1
C-2
C-3
C-4
TIME-Selects goal relevant activities, ranks them, allocates time, and prepares and follows schedules.
MONEY-Uses or prepares budgets, makes forecasts, keeps records, and makes adjustments to meet objectives.
MATERIALS & FACILITIES-Acquires, stores, allocates, and uses materials or space efficiently.
HUMAN RESOURCES-Assesses skills and distributes work accordingly, evaluates performances and provides feedback.
INFORMATION-Acquires and Uses Information
C-5
Acquires and evaluates information
C-6
Organizes and maintains information.
C-7
Interprets and communicates information.
C-8
Uses computers to Process information.
INTERPERSONAL-Works With Others
C-9
Participates as members of a team and contributes to group effort.
C-10
Teaches others new skills.
C-11
Serves clients/customers-works to satisfy customer’s expectations.
C-12
Exercises leadership-communicates ideas to justify position, persuades and convinces others, responsibly challenges existing
procedures and policies.
C-13
Negotiates-Works toward agreements involving exchanges of resources resolves divergent interest.
C-14
Works with Diversity-Works well with men and women from diverse backgrounds.
SYSTEMS-Understands Complex Interrelationships
C-15
Understands Systems-Knows how social, organizational, and technological systems work and operates effectively with them.
C-16
Monitors and Correct Performance-Distinguishes trends, predicts impacts on system operations, diagnoses systems performance
and corrects malfunctions.
C-17
improves or Designs Systems-Suggest modifications to existing systems and develops new or alternative systems to improve
performance.
TECHNOLOGY-Works with a variety of technologies
C-18
Selects Technology-Chooses procedures, tools, or equipment including computers and related technologies.
C-19
Applies Technology to Task-Understands overall intent and proper procedures for setup and operation of equipment.
C-20
Maintains and Troubleshoots Equipment-prevents, identifies, or solves problems with equipment, including computers and other
technologies.
FOUNDATION SKILLS
F-1
F-2
F-3
F-4
F-5
F-6
F-7
F-8
F-9
F-10
F-11
F-12
F-13
F-14
F-15
F-16
F-17
BASIC SKILLS-Reads, writes, performs arithmetic and mathematical operations, listens and speaks
Reading-locates, understands, and interprets written information in prose and in documents such as manuals, graphs, and
schedules.
Writing-Communicates thoughts, ideas, information and messages in writing, and creates documents such as letters, directions,
manuals, reports, graphs, and flow charts.
Arithmetic-Performs basic computations, uses basic numerical concepts such as whole numbers, etc.
Mathematics-Approaches practical problems by choosing appropriately from a variety of mathematical techniques.
Listening-Receives, attends to, interprets, and responds to verbal messages and other cues.
Speaking-Organizes ideas and communicates orally.
THINKING SKILLS-Thinks creatively, makes decisions, solves problems, visualizes, and knows how to learn and reason
Creative Thinking-Generates new ideas.
Decision-Making-specifies goals and constraints, generates alternatives, considers risks, and evaluates and chooses best alternative.
Problem Solving-Recognizes problems and devises and implements plan of action.
Seeing Things in the Mind’s Eye-Organizes and processes symbols, pictures, graphs, objects, and other information.
Knowing How to Learn-Uses efficient learning techniques to acquire and apply new knowledge and skills.
Reasoning-Discovers a rule or principle underlying the relationship between two or more objects and applies it when solving a
problem.
PERSONAL QUALITIES-Displays responsibility, self-esteem, sociability, self-management, integrity and honesty
Responsibility-Exerts a high level of effort and preservers toward goal attainment.
Self-Esteem-Believes in own self-worth and maintains a positive view of self.
Sociability-Demonstrates understanding, friendliness, adaptability, empathy, and politeness in group settings.
Self-Management-Assesses self accurately, sets personal goals, monitors progress, and exhibits self-control.
Integrity/Honesty-Chooses ethical courses of action.
CAMPUS GUIDELINES
CHILDREN ON CAMPUS
Many of the students attending classes at South Plains College are also parents who value the opportunity to participate in higher
education. Sometimes students are faced with the decision of whether to remain at home with their children, bring children with them
to class, or be absent from class. The following guidelines address concerns for the safety of children on campus and provide for an
environment conducive to learning:
1.
Students are not allowed to bring children to class and will be asked to leave in the interest of providing an environment
conducive for all students enrolled in the class. Students are responsible for adherence to the attendance requirements set
forth by the instructor in the course syllabus.
2.
Children may not be left unattended. In order to provide for the safety of children on campus, parents or other guardians
are responsible for supervising children while utilizing services or conducting business on campus.
3.
Disruptive children will not be allowed to interfere with college business. Parents or other guardians are responsible for
supervising and controlling the behavior of children they have brought on campus.
AMERICANS WITH DISABILITIES ACT STATEMENT
“Students with disabilities, including but not limited to physical, psychiatric or learning disabilities, who wish to request
accommodations in this class should notify the Special Services Office early in the semester so that the appropriate arrangements
may be made. In accordance with federal law, a student requesting accommodations must provide acceptable documentation of
his/her disability to the Coordinator of Special Services. For more information, call or visit the Special Services Office in rooms
809 and 811, Reese Center Building 8, 885-3048 ext. 4654.
DIVERSITY STATEMENT*
In this class, the teacher will establish and support an environment that values and nurtures individual and group differences and
encourages engagement and interaction. Understanding and respecting multiple experiences and perspectives will serve to challenge
and stimulate all of us to learn about others, about the larger world, and about ourselves. By promoting diversity and intellectual
exchange, we will not only mirror society as it is, but also model society as it should and can be.
(*Developed by the Title III summer 2001 participants as part of the training opportunity, May-June 2001, South Plains College).
GENERAL SAFETY ON CAMPUS
South Plains College recognizes the importance of safety on campus. The protection of persons and property is a responsibility which
we all share. Personal safety begins with the individual. The following guidelines are intended to assist you in protecting yourself and
to encourage practices that contribute to a safe environment for our campus community.
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e
e
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Never leave your personal property unsecured or unattended.
Look around and be aware of your surroundings when you enter and exit a building.
Whenever possible, avoid walking alone, particularly after dark. Walk to your vehicle with other class members or
request that the Security Guard walk you to your car.
When approaching your vehicle, keep your keys in your hand; look under your car and in the back seat and
floorboard. Lock the doors as soon as you are inside your car.
FOOD AND DRINK IN CLASSROOMS
It is the policy of South Plains College not to permit food or drink in the classrooms or laboratories.
In case of emergency, contact the following numbers but DO NOT leave a voice mail message:
894-9611, ext. 2338 - Levelland Campus 747-0576, ext. 4677 - ATC 885-3048, ext. 2923 - Reese Center (mobile 893-5705)
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