1. Explain the course of action adopted by the federal government to restore the confidence in the U.S. mortgage & real estate markets in the aftermath of the Great Depression, and how these changes affected the structure of a typical mortgage loan agreement.
2. Explain the general differences between:
Private Mortgage Insurance (PMI)
Federal Mortgage Insurance (FHA, VA)
in terms of the size of the mortgage cap, initial & annual fees.
3. Explain the reasons behind inception of the Mortgage Backed Securities (MBSs).
Use an example of a typical bank’s (thrift) balance sheet to illustrate the root problem leading to the creation of the MBSs