METROPOLITAN COMMUNITY COLLEGE COURSE OUTLINE FORM COURSE PREFIX AND NO. REES 2100 LEC 4.5 LAB 0 CREDIT HOURS 4.5

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1 METROPOLITAN COMMUNITY COLLEGE COURSE OUTLINE FORM COURSE TITLE: REAL ESTATE FINANCE COURSE PREFIX AND NO. REES 2100 LEC 4.5 LAB 0 CREDIT HOURS 4.5 COURSE DESCRIPTION: This course details the tools and techniques utilized to finance real estate including sources of funds and risk/return analysis. Emphasis is placed on financing specific to residential, commercial/industrial, and income properties. COURSE PREREQUISITE(S): REES 1000 or licensure RATIONALE: The development of many new financing tools - along with significant changes in the tax laws, make it imperative that those interested in real estate finance be familiar with the content covered in this course. REQUIRED TEXTBOOK(S) and/or MATERIALS: Title: Essentials of Real Estate Finance Edition: 14 th (2015) Author: David Sirota & Doris Barrell Publisher: Dearborn Real Estate Education Attached course outline written by: Robert B. Gronstal Date: 2/99 Reviewed/Revised by: Lori Lothringer, Ph.D. Date: 10/2015 Effective quarter of course outline: Dean Daryl Hansen 2015 Winter Date: Course Objectives, Topical Unit Outlines, and Unit Objectives must be attached to this form.

2 COURSE OBJECTIVES/TOPICAL UNIT OUTLINE/UNIT OBJECTIVES TITLE: REAL ESTATE FINANCE PREFIX/NO.: REES 2100 COURSE OBJECTIVES: Upon completion of this course, the student will be able to: REAL ESTATE FINANCE: THE NATURE OF REAL ESTATE FINANCE Assess the nature of real estate finance including the monetary system, government influence and the secondary mortgage market. MODULE 1: Evaluate the nature and cycle of real estate finance. MODULE 2: Analyze money and the monetary system relative to real estate finance. MODULE 3: Evaluate the nature and cycle of real estate finance. MODULE 4: Identify critical components of the secondary mortgage market. REAL ESTATE FINANCE: SOURCES OF FUNDS & PROGRAMS Analyze the sources of funds, financing instrument and programs used to finance real estate. MODULE 5: Compare sources of funds including institutional, non- institutional and other MODULE 6: Identify and evaluate various instruments of real estate finance. MODULE 7: Compare attributes of various real estate financing programs. REAL ESTATE FINANCE: LOANS, DEFAULTS & FORECLOSURES Evaluate the use of government loan, outline the procedures to process loans, and determine the relevant specifics of defaults and foreclosures. MODULE 8: Assess government loan programs utilized to finance real estate interests. MODULE 9: Describe how real estate loans are processed by identifying critical components of said process. MODULE 10: Determine the justification, process, and potential outcome specific to defaults and foreclosures. TOPICAL UNIT OUTLINE/UNIT OBJECTIVES: Upon completion of this course, the student will be able to: MODULE 1: Evaluate the nature and cycle of real estate finance. Evaluate the importance of the construction industry to the national economy. Define and illustrate the concepts of collateralization, hypothecation, and leverage. Differentiate between the primary and secondary financing markets. List important factors that affect real estate cycles. Discuss government plans for stimulating the economy.

3 MODULE 2: Analyze money and the monetary system relative to real estate finance. Describe the activities of the Federal Reserve System. Explain the role of the U.S. Department of the Treasury as the nation s fiscal manager. Discuss the role of the Federal Home Loan Bank System. Outline the responsibilities of the Federal Deposit Insurance Corporation. MODULE 3: Evaluate the nature and cycle of real estate finance. List the responsibilities and activities of HUD and the CFPB. Explain the criteria for selling property under the Interstate Land Sales Full Disclosure Act. Identify important acts of federal legislation that affect real estate finance. Describe the operation of the Farm Credit System. MODULE 4: Identify critical components of the secondary mortgage market. Describe the original purpose and organization of Fannie Mae and Freddie Mac and how they have evolved since then. Explain the role of the FHFA. List underwriting guidelines that must be followed in order to sell mortgage loans to Fannie Mae or Freddie Mac. Explain the role of Ginnie Mae in the secondary market. Briefly describe the functions of the FHLB, Farmer Mac, and REMICs. MODULE 5: Compare sources of funds including institutional, non- institutional and other Describe the types of loans offered by a commercial bank. Explain the services of a mortgage broker and a mortgage banker. Identify the various types of bonds used in real estate finance. Describe the role of private and foreign investors in real estate. MODULE 6: Identify and evaluate various instruments of real estate finance. Give examples of encumbrances and liens on a property, Compare a mortgage with a deed of trust, Discuss the possible uses for a contract for deed and precautions that should be taken, Describe a junior loan used as a home equity loan and how it may be used, and Identify special clauses that may be used in mortgage lending instruments.

4 MODULE 7: Compare attributes of various real estate financing programs. Provide an example of both a 30- year and a 15- year loan for a specific amount, comparing the differences in payment and in interest paid over the life of the loan. List the basic guidelines for conventional conforming loans. Describe the components of an adjustable- rate mortgage. Explain the concept of private mortgage insurance and how it protects the lender. Differentiate between subprime and predatory lending. MODULE 8: Evaluate the nature and cycle of real estate finance. Explain the most important components of the major FHA programs; Calculate the down payment and loan amount for an average- price home; Calculate the complete principal, interest, taxes, and insurance (PITI) plus the mortgage insurance premium (MIP) payment for a given loan amount; Determine how eligibility for VA entitlement is derived; List the options available if a property appraises at less than the sales price; and Describe the assumption process for a VA loan, including release of liability and substitution of entitlement. MODULE 9: Describe how real estate loans are processed by identifying critical components of said process. Discuss the impact of credit scoring on obtaining loan approval. Describe the direct sales comparison, cost, and income capitalization approaches and how an appraiser may reconcile them to determine value. Define a cloud on the title and how it is resolved. Identify the costs that may be involved in the closing of a real estate loan. Define impound (or escrow) funds and how they are collected. Explain the types of title insurance and how payment is made. MODULE 10: Determine the justification, process, and potential outcome specific to defaults and foreclosures. Describe the various causes for default on a mortgage loan. Define the various actions that a lender could take to help the borrower avoid foreclosure. Differentiate between equitable and statutory redemption periods and how they are used. Compare the nonjudicial power- of- sale foreclosure with the judicial foreclosure on a mortgage.

5 Course Requirements/Evaluation Upon completion of this course, the student will have demonstrated the ability to assess and evaluate different real estate financing techniques and be able to apply these methods and techniques in the real estate financing decision. Assessment Measures Course Objectives Evaluate the nature and cycle of real estate finance. Analyze money and the monetary system relative to real estate finance. Evaluate the nature and cycle of real estate finance. Identify critical components of the secondary mortgage market. Compare sources of funds including institutional, non- institutional and other Identify and evaluate various instruments of real estate finance. Compare attributes of various real estate financing programs Assess government loan programs utilized to finance real estate interests. Describe how real estate loans are processed by identifying critical components of said process. Determine the justification, process, and potential outcome specific to defaults and foreclosures. Assessment Measures: The Instructor may evaluate course objectives by having the student perform one or more of the following activities either individually or in groups.