Real Estate Finance 1

The process of making a lending decision is known as: underwriting
Each consumer has three different credit scores from the three major credit reporting agencies because: not all creditors report to all of the agencies
___________ typically extend loans with their own funds, at their own risk. correspondent lenders
The collecting of monthly payments and the maintenance of records of payments and balances is known as: servicing
Locally, real estate values are affected by: Availability of employment, Population trends, Local government policies
_______________ is the maintenance of a stable money supply that provides for growth in the economy while keeping inflation in check. monetary policy
The _______________ is responsible for raising money to support the spending decisions of the congress. u.s. treasury
The U.S. Mint is part of the ________________________. department of the treasury
Banks and federal savings associations are regulated by the __________________ Office of the Comptroller of the Currency
In residential lending, mortgage brokers, bankers and correspondent lenders are now universally known as: Residential Mortgage Loan Originators (RMLOs)
All residential mortgage loan originators must now be registered with: NMLS
USDA loans are available for: primary residences only
According to the Loan Estimate, services you cannot shop for include: credit report fee
The Loan Estimate form replaces which of the following forms? the good faith estimate
The Community Development Block Grants (CDBG) Program was created in __________ to help communities with economic development, job opportunities and housing rehabilitation. 1974
Federal Fair Housing statutes prohibit housing discrimination based on which of the following? national orgin
The _________________ exists for the purchase and sale of existing mortgages to investors. secondary market
______________ buys loans in the secondary market. fannie mae
There are _____ Federal Home Loan Banks. twelve
A ____________ is a return on an investment. yield
The Housing and Economic Recovery Act of 2008 authorized the FHFA to: Enforce compliance with housing goals
The Federal Agricultural Mortgage Corporation, better known as Farmer Mac, was established by ____________ as a part of the Agricultural Credit Act of 1987. congress
The working capital of a ________________ is primarily generated through deposits from its clients. commercial bank
Life insurance companies are funded by ____________. premiums
The money that mortgage companies use to make loans comes from the sale of _______________. bonds
__________ bonds are sold by government entities to fund major capital investments. Municipal
In cases where they participate in commercial lending, life insurance companies often prefer to engage in _________ loans. participation
_________ return surplus income to their members in the form of dividends. credit unions
A mortgage lien is a common example of a ______________ lien. voluntary
The lender on a mortgage is known as a: mortgagee
In a _____________ state, the borrower retains title to the property. lien theory
Which of the following can result in foreclosure? Failure to pay property taxes, Payment delinquency, Failure to keep mortgaged property properly insured
A second mortgage is an instrument that is _______________ to the first mortgage. subordinate
Covenants, conditions and restrictions (CC&Rs), private deed restrictions, and easements are examples of possible ___________ on real property. encumbrances
A(n) __________ clause gives the borrower the ability to replace the primary finance instrument with another, without affecting the position of the subordinate instrument. lifting
A mortgage loan in which the balance is reduced with regular fixed monthly payments of both principal and interest is known as: An amortizing loan
When a loan has an escrow account, the monthly payment will consist of principal and interest plus ___________: 1/12th of the annual taxes and insurance
The rate at which an adjustable-rate mortgage begins is called the: initial rate
One of the major protections offered to borrowers who accept an ARM loan is that any change in the rate of interest must be tied to the change in the: index
A loan in which two or more lenders own an interest is known as a(n) _____________. participation loan
Private mortgage insurance will most often be required for borrowers whose LTV on a conventional loan is greater than 80%
A(n) __________ is a unit of measure, typically used to denote the charging of fees in the mortgage business. point
FHA requires a minimum down payment of: 3.50%
The FHA borrower can pay the downpayment with gift funds provided by any of the following except his or her: real estate agent
Escrow of taxes and insurance is required for FHA loans: Always – all FHA loans require escrow of taxes and insurance
FHA loans are available for: Single-family homes, Multifamily properties, Manufactured homes
What is the minimum borrower’s age for an FHA loan in Texas? 18
Seller contributions to buyer closing costs in an FHA loan are limited to _______ of the sales price. 6%
For a property to have value, it must have the following four characteristics, demand, __________, scarcity and transferability. utility
The most probable price which a property should bring in a competitive and open market under all conditions requisite to a fair sale is known as: market value
The ___________ approach to appraisal uses comps to determine the value of the subject. Sales comparison
The actual age of a property is known as its: chronological age
A loan application includes the following six pieces of information, property address, estimated value, name of the borrower, social security number __________________ and loan amount. income
The standard loan application in use is the ________________, better known as the Fannie Mae 1003. Uniform Residential Loan Application
Sources of downpayment may include: Checking and savings accounts, Cash-on-hand, Gift from relative
A ____________ is a breach or nonperformance of the terms of a note or the covenants of a mortgage. default
The _____________ offers delinquent borrowers the opportunity to prevent foreclosure by working with lenders to refinance existing loans. Streamlined Modification Program
The _____________ offers programs for rural homeowners to lower their monthly mortgage payment. USDA
Which type of foreclosure is also known as a statutory foreclosure? power of sale
When a property is foreclosed and is sold at auction for less than is owed on the mortgage, the lender may seek a ___________________ for the unpaid balance. Deficiency Judgment
The minimum downpayment on a VA loan is: 0% of the sales price
________ is the process of creating a new mortgage loan origination
A veteran can have more than one VA loan: If the prior VA loan was paid in full and the property disposed of, The prior VA loan was assumed by an eligible veteran who substituted their entitlement
________ are not-for-profit organizations that exist to serve their members. credit unions
A qualifying ratio that compares the borrower’s proposed house payment to their gross monthly income is the __________. front ratio
Periodic payment amounts such as principal & interest, estimated escrow, estimated monthly payment, and __________ must be disclosed in the Projected Payments section of the Loan Estimate form. Mortgage Insurance
__________ relates to Federal Government spending. fiscal policy
In the Closing Disclosure, prepaids include homeowner’s and mortgage insurance premiums, prepaid interest, property taxes, and a maximum of __________ additional items. 3
When calculating the monthly payment, the lender will add an amount equal to: 1/12 of the annual taxes and insurance
Which of the following is true regarding FHA loans? Ratios may be exceeded with compensating factors
The age of a property based upon the appraiser’s assessment of the property’s maintenance and upgrades is its __________. Effective age
In an ARM, the index: aries with fluctuations in financial markets
The loan to value ratio is: The percentage of value that a lender is willing to finance
An amortizing loan is: A loan whose payment includes both principal and interest
A claim, lien, charge, or liability attached to and binding real property is a(n) __________. Encumbrance
FHA requires a down payment of: 3.50%
The _________ is the central banking system of the United States. the federal reserve
The three major national credit reporting agencies are, Experian, Equifax and _________. TransUnion
Because it is a gift, the lender and/or the agent can provide gift funds to the borrower to be used as a down payment on an FHA loan. false
The two major purchasers of mortgages in the secondary market are: Fannie Mae and Freddie Mac
If a borrower is in default, the mortgage servicer may start the _________ process. foreclosure
A collateral-dependent loan is also known as a __________. hard money loan
Lenders bear less risk in making an FHA loan because the FHA: Is default insurance that will pay a claim to a lender in the event of default
While some expenses may be paid in the form of a seller contribution or other means, the borrower actually must have the funds on hand for the: downpayment
An ARM that offers a fixed-rate period during the first years of the loan usually has an initial adjustment cap that is higher than the per adjustment cap. true
_______ is defined as the sum of currency held by the public and transaction deposits at depository institutions. M1
The _________ is where borrowers and mortgage lenders come together to create and negotiate the terms of a mortgage transaction. primary market
A home was built 30 years ago, but is much like a home that is 10 years old, based upon its condition. In the appraisal, ten years is the home’s ___________. effective age
The process of making a lending decision is known as ___________. underwriting
In the Loan Estimate, the Comparisons Table: Provides information to the borrower used to compare loan offers from different lenders
Ownership of real estate in Texas is established by certificates of title recorded in the Torrens System. false
The money that mortgage companies use to make loans comes from _________. the sale of bonds
A lender is qualifying borrowers on a 36% ratio which includes house payment and regular monthly obligations. The borrower has a gross monthly income of $8,200 per month, and regular debt obligations totaling $1,375 per month. What is the maximum monthly payment for which this buyer will qualify? $1,577
In a _________ foreclosure, the lender files suit with the judicial system. judicial
The Upfront Mortgage Insurance Premium (UFMIP) on an FHA loan is paid: at closing
The most probable sale price of a property is known as: market value
There are _________ Federal Home Loan Banks in the United States. twelve
A(n) _________ is a right given by law to creditors to have debts paid out of the property of a defaulting debtor. lien
_______ or re-amortizing a mortgage can reduce the borrower’s monthly payment, making a default situation more manageable. Recasting
A portfolio loan is: A loan not sold into the secondary market, but retained by the lender
The value applied to a property for ad valorem tax purposes is the ___________. assessed value
An appraiser finds that, on average, rental homes in the area are selling for $166,900. Average rents are $1575 per month. The appraiser is appraising a home with a projected gross rent of $1,520 per month. What is the value of the home using the gross rent multiplier? $161,071
The maximum loan to value ratio on an FHA loan is 90%. false
A return that represents the money earned on an investment is called _________. a yield
The State of Texas plays a role in affordable housing through: TDHCA
If the marketing time in an appraisal is over six months, It suggests that the market is slow enough to be a drag on property values
If a home was built 30 years ago, thirty years is the home’s ___________. Chronological age
An appropriate loan for a property in need of significant rehabilitation would be a(n): Construction to permanent loan
Each consumer has three different credit scores from the three major credit reporting agencies because Not all creditors report to all of the agencies
Periodic payment amounts such as principal & interest, estimated escrow, estimated monthly payment, and ___________ must be disclosed in the Projected Payments section of the Loan Estimate form. Mortgage insurance
The most common occurrences that can result in foreclosure include: Payment delinquency, Failure to maintain the mortgaged property, Failure to repay property taxes
A strict foreclosure is one in which the ____________ files suit on the homeowner in default. lender
For the borrower planning to remain in his/her home in the long term, or the borrower who is adverse to risk, the best choice in a mortgage would probably be: A fixed-rate mortgage
The Closing Information section of the Closing Disclosure form includes the date issued, the disbursement and closing dates, the address or location of the property, the value, and the ____________ name and file number. Settlement agent’s
_______ was established in 1970 for the purpose of purchasing mortgages in the secondary market. Freddie Mac
The fixed rate charged on an adjustable rate mortgage until the first adjustment date is known as the ___________. Initial rate
The lender may also be referred to as the ___________ in some deed of trust forms. mortgagee
_______ or re-amortizing a mortgage can reduce the borrower’s monthly payment, making a default situation more manageable. Recasting
A portfolio loan is: A loan not sold into the secondary market, but retained by the lender
The value applied to a property for ad valorem tax purposes is the ___________. assessed value
An appraiser finds that, on average, rental homes in the area are selling for $166,900. Average rents are $1575 per month. The appraiser is appraising a home with a projected gross rent of $1,520 per month. What is the value of the home using the gross rent multiplier?
_______ or re-amortizing a mortgage can reduce the borrower’s monthly payment, making a default situation more manageable. Recasting
A portfolio loan is: A loan not sold into the secondary market, but retained by the lender
_______ or re-amortizing a mortgage can reduce the borrower’s monthly payment, making a default situation more manageable.
_______ is defined as the sum of currency held by the public and transaction deposits at depository institutions. M1
The _________ is where borrowers and mortgage lenders come together to create and negotiate the terms of a mortgage transaction. primary market
A home was built 30 years ago, but is much like a home that is 10 years old, based upon its condition. In the appraisal, ten years is the home’s ___________. effective age
_______ is defined as the sum of currency held by the public and transaction deposits at depository institutions. M1
The _________ is where borrowers and mortgage lenders come together to create and negotiate the terms of a mortgage transaction.
A claim, lien, charge, or liability attached to and binding real property is a(n) __________. Encumbrance
FHA requires a down payment of: 3.50%
The _________ is the central banking system of the United States. the federal reserve
The three major national credit reporting agencies are, Experian, Equifax and _________.
A claim, lien, charge, or liability attached to and binding real property is a(n) __________. Encumbrance
FHA requires a down payment of: 3.50%
The _________ is the central banking system of the United States. the federal reserve
A claim, lien, charge, or liability attached to and binding real property is a(n) __________. Encumbrance
FHA requires a down payment of: 3.50%
16. A claim, lien, charge, or liability attached to and binding real property is a(n) __________.
Escrow of taxes and insurance is required for FHA loans:

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