Text c: modern mortgage finance

modest means – скромные (ограниченные) средства

availability – доступность

securities – ценные бумаги

interest payment – уплата процентов

broker – маклер, посредник, агент

loan origination – получение кредита, ссуды

to originate – предоставлять ссуду, кредит

mortgage loan – ссуда под недвижимость

to conform to – соответствовать чему-либо

business – сделка

borrower – заемщик, получатель ссуды

mortgage borrower – заемщик по ипотеке

holder – владелец, арендатор

conflict of interest(s) – конфликт интересов (ситуация, при которой интересы лица или фирмы не совпадают)

The vast majority of people purchase homes by taking out a mortgage. Few have sufficient liquid capital to purchase a home with cash. Even for those who do have the money, it is often advantageous to use low-cost, tax-deductible mortgage financing to purchase a residence and deploy their cash into more productive uses. Mortgage financing has allowed anyone of modest means to become a homeowner. The availability and cost of credit is the single most important economic factor in the real estate market.

Investors in mortgage securities receive the interest payments from homeowners. Mortgage brokers receive commissions from the loan origination fees. Mortgage loans are typically originated by third party brokers who perform all of the paper work required to make mortgage conform to the requirements of the securities markets. Mortgage brokers receive fat fees for bringing in business. Unlike traditional bank financing, mortgage brokers have no need to worry about a borrower’s ability to pay; they only receive fees from a successful mortgage application. This separation of risk between mortgage brokers and mortgage holders creates a conflict of interests. It is in the interests of the mortgage broker to make the borrower look as good as possible to the finance market in order to make a successful loan, regardless of the borrower’s real credit status.

Ex.1 Give Russian equivalents:

sufficient liquid capital; anyone of modest means; to receive commissions; to make mortgages conform to the requirements of securities markets; unlike traditional bank financing; a borrower’s ability to pay; mortgage brokers and mortgage holders; the borrower’s real credit status.

Ex.2 Give English equivalents:

подавляющее большинство людей; воспользоваться недорогой, не облагаемой подоходным налогом ипотекой; разместить (использовать) наличные средства продуктивнее; ценные бумаги, обеспеченные закладными; оформить всю документацию; высокие комиссионные; совершить сделку; независимо от.

Ex.3 Answer the following questions:

1. Why do the majority of people prefer to buy homes by taking out a mortgage?

2. Is there any difference between traditional bank and mortgage financing?

3. What creates a conflict of interest?

Additional exercise

1) Read the first paragraph of the text in exercise 4 quickly. Don’t fill in the gaps yet. Which heading below, А or В, do you think would match the paragraph?

А A view from а helicopter

B How the English live

2) Match the following hеаdings to each of the paragraphs 2—5

A A maze of streets

В A hidden artist in every Englishman

C Nо such number

D The nation of nest builders

3) Read the following extracts from the text. Circle the words that the underlined words refer to in each extract 1—3 below.

1. Our nеighbours were from Argentina. Their two little daughters were the nicest children I’ve ever seen.

2. We decided to put thе house up for sale. The price we set wasn’t high, so we soon found somebody interested in buying it.

3. She was born in the country and spent her childhood in a small quiet villаgе. Shе considered it the haррiеst period in her life. Тhat was thе rеаsоn whу she always dreamed of buying a small house and moving away from London.

4) Read the following text. Five sentences have been removed from the text. Fill in gaps 1—5 with the missing sentences from A-F. There is one extra sentence that won’t fit any gaps.

(1) If you look from а helicopter at any English town you will see that the residential areas соnsist almost entirely of rows of small boxes, еaсh with its own little patch of green. 1__. The principle, however, will be clear: the English all want to live in their own private houses with their own private gаrdens.

(2) What you cannot see from your helicopter, you will learn as soon as you try to visit an English home. 2__. Some humorists claim this is the result of ‘a conspiracy to mislead foreigners’, pointing out that our streets are never straight, every time a street bends, it is given a different name, there are at least 60 confusing synonyms for ‘street’ and the numbering of the houses is hopelessly illogical.

(3) The house numbers are at least as well camouflaged as the street names. 3__. One taxi-driver explained: ‘An Englishman’s home is his castle, right? We can’t actually have massive walls around it, but we can make it difficult to get to.’

(4) The Englishman’s home is much more than just his castle; it is also his identity and his prime obsession. 4__. Thе mania for home improvements is widespread. Research shows that only 2% of English males and 12% of females have never done any Do-It-Yourself.

(5) Working on home improvements is an орроrtunitу tо exercise our creative talents. 5__. Although it may sometimes be an economic necessity, we see the arrangement, furnishing and our homes as an expression of our unique personal taste.

A You may have its address and a map, but you will have great difficulty in finding the house you are looking for.

B Or at least that’s how we like to think of it.

C This is an unwritten rule of home ownership and the moving-in ritual.

D They are either hidden, or even not there at all.

E In better-off areas, these boxes will be further apart, and the green patches attached to them will be larger.

F This is why a house is not something you just passively ‘have’, it is something you constantly ‘work on’.