National Finance

A seller sold a house to a buyer allowing the buyer to take over the loan on a “subject to” basis. After 2 years, the buyer defaulted on the loan. Who would be liable to the lender for the note?The Seller would be primarily liableThe Buyer would be primarily liableBoth buyer and seller would be primarily liableNeither buyer or seller would be primarily liable The Seller would be primarily liable
An “Acceleration” clause most nearly meansto pay off a debt in equal installments.to sell a property quickly.a clause in a deed.to speed up payment of an overdue debt. to speed up payment of an overdue debt.
Tom, the borrower, gave Joe, the lender, his mortgage as security for his loan. Under the terms of the mortgage, Tom is identified as themortgagor.mortgagee.trustee.trustor. mortgagor.
Which clause protects a lender if he does not want the loan to be assumed by another party?DefeasanceSubordinationDue on sale (alienation)Subrogation Due on sale (alienation)
The term, PITI refers to the parts of a mortgage loan payment, which of the following correctly describes PITI,Principal, Investment, Taxes, and Insurance.Principal, Interest, Tenement, and Insurance.Due on sale (alienation)Principal, Interest, Taxes, and Insurance. Principal, Interest, Taxes, and Insurance.
In which way are a mortgage document and promissory note similar?Both are non-negotiable instrumentsBoth are debt-reducing instrumentsBoth are contractsBoth are fully standardized instruments of conveyance Both are contracts
A DEBENTURE is defined as a long-term note that is not secured by a specific property. When the lender holds the security so that if the borrower does not pay the promise made in the note they can foreclose on the property, the real estate loan is calleda secondary market loan.an upside down loan.a subordinated loana collateralized loan. a collateralized loan.
A mortgage or deed of trustmust be recorded.may be recorded.is never recorded.may only be recorded by the borrower upon default. may be recorded.
When a lender requires tax and/or insurance amounts to be deposited with the lender by placing the monies in an escrow account, a “Budget Mortgage or Deed of Trust” occurs. These escrow accounts may also be referred to asimpound or Reserve Accounts.compound or Reserve Accounts.insured or Restricted Accounts.interlocked and Restricted Accounts. impound or Reserve Accounts.
When a mortgage is paid off, what clause allows the lender to release the mortgage rights and issue a satisfaction piece?AccelerationDefeasanceCodicil – change in a willWrit of execution Defeasance
Which mortgage clause allows a lender to regain their investment if the borrower does not pay his payment?AlienationDefeasanceAccelerationPrepayment Acceleration
An agreement to waive prior rights in favor of another is calledsubordination.alienation.subrogation.acceleration. subordination.
If prioritizing loans as when recording, a second mortgage or deed of trust is referred to asa secondary loan.an underwater mortgage.a factored loan or mortgage.a junior mortgage. a junior mortgage.
– A mortgage clause used in refinancing the first mortgage which allows the second mortgage to take the first place is calledacceleration.subordination.refinance.priority. subordination.
The first item to be paid out of foreclosure funds isthe Costs of Sale – advertising, attorney fees, trustee fees, etc.the first mortgage.any properly recorded junior liens.special assessment taxes, and general taxes. the Costs of Sale – advertising, attorney fees, trustee fees, etc.
If a property sold at a court foreclosure does not sell for an amount sufficient to satisfy the outstanding mortgage loan debt, the mortgagee may sue fora judgment by default.a deficiency judgment.a satisfaction of mortgage.damages. a deficiency judgment.
If the amount realized at a Sheriff’s sale upon a delinquent mortgage is more than the indebtedness, the excess belongs tothe Sheriff’s office.the mortgagee.the mortgagor.the purchaser. the mortgagor.
On a $150,000 loan, the lender charges a 1 point service charge. How much does the borrower have to pay?$15$150$1,500$15,000 $1,5001 point = 1% of a loan balance, therefore 1 point charged on $150,000 = $1,500
A buyer got a 30 year loan with a loan balance of $65,000 with an interest rate of 10% and a factor of 8.78. What will be the borrowers monthly P & I payment?$425.30$570.70$3,456.98$570,700 $570.70You answered incorrectly$65,000 = 65 thousands, 50 x 8.78 = $570.70
The loan amount is $60,000, and the monthly principal and interest payment will be $459.00 a month for 30 years. How much interest will be paid over the term of the loan?$105,240$108,000$30,000Cannot be determined. $105,240$459 x 12 = $5,508, $5,508 x 30 = $165,240, $165,240 – $60,000 = $105,240
The interest on a real estate mortgage loan is what type of interest?CompoundDiscountedAmortizedSimple Simple
The loan amount is $80,000, and the monthly principal and interest payment will be $499.00 a month for 30 years. How much interest will be paid over the term of the loan?$99,640$89,820$75,000Cannot be determined. $99,640
The cost of points is not deducted from the loan. Points are treated as aseparate credit on a settlement statement, charged to the party who has agreed to pay them.proration on the settlement statement.credit to the borrower and a debit to the seller.separate debit or charge on a settlement statement, charged to the party who has agreed to pay them. separate debit or charge on a settlement statement, charged to the party who has agreed to pay them.
The loan amount is $70,000, and the monthly principal and interest payment will be $479.00 a month for 30 years. How much interest will be paid over the term of the loan?$126,000$102,440.00$50,000Cannot be determined. $102,440.00
If a borrower purchases a property for $200,000, and borrows $160,000 he/she is said to have a LTV ratio of?100%80%90%Cannot be determined. 80%
What is the balance on an amortized loan of $340,000 after the first payment if the interest rate is 6% with a monthly P&I payment of $2,028?$338,300$339,672.00$339,020.00$337,972 $339,672.00$340,000 x 6% = $20,400, $20,400 รท 12 = $1,700, $2,028 – $1,700 = $328, $340,000 – $328 = $339,672
Then determining a mortgage loan balance, the monthly loan paymentinterest is added to the balance.principal is added to the balance.interest is deducted from the payment.principal is deducted from the payment. interest is deducted from the payment.
Remember for purposes of determining the new loan balance, you will not have to know how to determine theprincipal portion of the loan payment.interest portion of the payment.payment amount.monthly interest amount. payment amount.
To determine the monthly principal portion of a monthly loan payment you must deduct themonthly interest from the monthly payment.monthly principal from the monthly payment.yearly interest from the monthly payment.monthly interest from the yearly payment. monthly interest from the monthly payment.
In Step 3 what do you subtract from the monthly payment amount to solve for the monthly principal?Annual interestCurrent monthly interestLast months interestNext months interest Current monthly interest
When determining a mortgage loan balance, the monthly loan paymentinterest is added to the balance.principal is added to the balance.interest is deducted from the payment.principal is deducted from the payment. interest is deducted from the payment.
Remember for purposes of determining the new loan balance, you will not have to know how to determine theprincipal portion of the loan payment.interest portion of the payment.payment amount.monthly interest amount. payment amount.
A developer would most likely obtain which of the following types of mortgage on a new subdivision?Open end mortgagePackage mortgageBlanket mortgageWraparound mortgage Blanket mortgage
A real estate loan where a homeowner receives monthly payments based on accumulated equity rather than a lump sum and is repaid upon the death of the owner or sale of the property is a (an)open-end mortgage.blanket mortgage.contract for deed.reverse annuity mortgage. reverse annuity mortgage.
The purchaser of real estate by deed or the buyer under a contract for deed is called thebeneficiary.vendor.vendee.obligor. vendee.
A type of long term permanent financing for residential construction or large construction projects, that replaces the construction loan is called a (an)bridge loan.construction loan.takeout loan.wraparound loan. takeout loan.
A Budget Mortgage is a loan, which has a payment composed of the following?Principal and interest onlyPrincipal, interest, taxes and insuranceInterest onlyPrincipal and compound interest Principal, interest, taxes and insurance
A situation where an owner sells his or her improved property and at the same time, signs a long-term lease with the buyer is called a (an)bridge Loan.sale-leaseback.contract for deed.wraparound loan. sale-leaseback.
An Adjustable Rate Mortgage (ARM) contains an escalator clause that allows the interest to adjust over the loan term. How often the loan rate may be changed is determined by thelife margin cap.index cap.adjustment period.LTV ratio. adjustment period.
A loan on real estate, that includes fixtures, and appliances used extensively in the sale of condominiums is a (an)reverse annuity mortgage.blanket mortgages.open-end mortgage.package mortgage. package mortgage.
A type of mortgage which allows the lender to increase the outstanding balance of a loan up to the original amount of the loan in order to advance additional funds is called anopen-end mortgage.wraparound mortgage.bridge mortgage.take-out mortgage. open-end mortgage.
A mortgage given as part of the buyer’s consideration for the purchase of real property, and delivered at the same time that the real property is transferred as a simultaneous part of the transaction is a (an)Purchase Money Mortgage (PMM).wraparound mortgage.participation mortgage.blanket mortgage. Purchase Money Mortgage (PMM).
Rural Economic and Community Development (RECD) loans are either madedirectly by RECD or made by a private lender with RECD guaranteeing a certain percentage.directly by RECD or made by a private lender with the FHA insuring a certain percentage.directly by RECD or made by a private lender with RECD insuring a certain percentage.directly by HUD or made by a private lender with HUD guaranteeing a certain percentage. directly by RECD or made by a private lender with RECD guaranteeing a certain percentage.
A borrower applied for a VA guaranteed first time mortgage for $50,000; however, the property appraised for $46,000. If the buyer still wanted to buy the property which could happen?The broker could write up a contract, different from the actual offer price, to take to the lenderThe VA could allow the borrower to make up the difference in cashThe VA could make the borrower get a second mortgage for the differenceThe veteran could not get a VA loan because it appraised for over $35,000 The VA could allow the borrower to make up the difference in cash
Rural Economic and Community Development (RECD) loans may beinsured loans or direct loans.guaranteed loans or direct loans.guaranteed loans or insured loans.direct loans only. guaranteed loans or direct loans.
The basic difference between an FHA and a VA loan isThe FHA guarantees loans; the VA insures them.The FHA insures loans, the VA guarantees them.Both required 20% down payment.The FHA requires no down payment, VA requires 5% down payment. The FHA insures loans, the VA guarantees them.
hat is the purpose of FHA?To loan money for first mortgagesTo loan money for second mortgagesTo act as an insurance company of first mortgagesTo loan money in areas of high risk To act as an insurance company of first mortgages
A veteran had a VA loan using his full entitlement. He allows another veteran to assume the loan without VA approval. Could he immediately get another VA loan?Yes, because another veteran assumed the loan.Yes, because he is no longer liable for the loan.No, because he is still liable for the loan.No, as he can NOT use VA eligibility more than once. No, because he is still liable for the loan.
A veteran desired a loan to buy a 200 acre residence. There are no VA lenders in the area. Which could happen?The VA could loan the money themselves.The VA cannot loan the money but the Federal National Mortgage Company will.You cannot get a VA loan for a farm.The VA can require local lenders to make the VA loan. The VA could loan the money themselves.
A type of closing where a third party acts as the escrow agent for the buyer and seller and conducts all the closing activities is called aface to face closing.qualified closing.non-recourse closing.closing in escrow. closing in escrow.
Under which of the following would one MOST likely see an estoppel certificate?A lender sells a loan and the new mortgagee wants to know the existing balanceA lender attempts to prevent a loan assumption to an unqualified partyA developer attempts to have a parcel released from under a blanket mortgageA lender calls for full payment of a note A lender sells a loan and the new mortgagee wants to know the existing balance
A written pledge by a lender to lend a certain amount of money to a qualified borrower on a particular piece of real estate for a specified time under specific terms is aconditional approval.application analysis.estoppel letter.application settlement. conditional approval.
When underwriting a mortgage loan a lender considers all of the following, exceptquality of the property that is being financed.credit worthiness of the buyer.quality of the title to the property being financed.credit worthiness of the seller. credit worthiness of the seller.
Prior to closing, a final walkthrough of the property should be performed to ensure that everything has remained as stated in the sales contract. The walkthrough is generally completed by theappraiser.lender.seller.buyer. buyer.
Transfer taxes are generally paid by thebroker.seller.buyer.lender. seller.
When qualifying a buyer the lender will calculate the Debt Coverage ratio, which measuresthe ratio of monthly net income to annual debt service.the ratio of annual net income to monthly debt service.the ratio of annual net income to annual debt service.the ratio of annual gross income to annual debt service. the ratio of annual net income to annual debt service.
Assets include all of the following, exceptrevolving and installment loan accounts.liquid savings, checking, CD’s.personal property.real estate. revolving and installment loan accounts.
Protection to an owner of property against losses sustained as a result of a defective title to real estate can be accomplished bytitle search.title abstract.title Insurance.title Opinion. title Insurance.
Many states charge what is called a transfer tax when the property is conveyed by one of the following meanscondemnation.inheritance.deed.gift. deed
Settlement is another name for closing andbrings the real estate transaction to completion.is always a face to face meeting between buyer and seller.is always conducted at the office of the seller’s attorney.requires the presence of an appraiser, underwriter and notary public. brings the real estate transaction to completion.
A list of successive changes of ownership, each one linked to the next, is called a:underwriting title.chain of title.abstract of title.equitable title. chain of title.
The legal doctrine by which a person is prevented from asserting rights or facts that are inconsistent with a previous position or representation made by act, conduct or silence is known asdisintermediation.exculpation.laches.estoppel. estoppel.
A qualified buyer is one who has demonstrated the financial capacity and credit worthiness required to afford the asking price. In qualifying a buyer the lender looks at these factors?Income, expenses and appraised valueAssets, liabilities and net worthIncome, net worth and credit historyAppraised value, income and credit history Income, net worth and credit history
A written pledge by a lender to lend a certain amount of money to a qualified borrower on a particular piece of real estate for a specified time under specific terms is aconditional approval.application analysis.estoppel letter.application settlement. conditional approval.
A settlement agent could bean attorney.a real estate agent.a lender.all of the above. all of the above.
Which of the following secondary market organizations is a quasi-government corporation?Fannie Mae (FNMA)Maggie Mae (MGIC)Freddie Mac (FHLMC)Ginnie Mae (GNMA) Fannie Mae (FNMA)
As a group, the three secondary mortgage market participants; Fannie Mae, Ginnie Mae and Freddie Macinsure mortgage loans originated by primary market lenders.regulate the low cost housing market.provide an outlet for primary lenders to sell their mortgage loans.guarantee any losses suffered by primary lenders. provide an outlet for primary lenders to sell their mortgage loans.
A commercial bank would usually make all of the following loans EXCEPT,construction.home improvement loans.loans for a mobile home.a pension fund loan. a pension fund loan.
The Federal Reserve controls the money supply bymaintaining a fund from which member banks may borrow.requiring how much of a bank’s assets have to be on reserve.lending money to qualified customers.setting the maximum interest rate that can be charged. requiring how much of a bank’s assets have to be on reserve.
All of the following were originally established to buy and sell mortgages in order to stimulate mortgage lending, exceptFannie Mae (FNMA).Maggie Mae (MGIC).Freddie Mac (FHLMC).Ginnie Mae (GNMA). Maggie Mae (MGIC).
All of the following are sources for obtaining a residential mortgage for the purchase of a single-family residence, exceptsavings and loans.commercial banks.mortgage brokers.FNMA. FNMA.
S&Ls are now regulated by the Federal Housing Finance Board (FHFB) and deposits are insured by theDeposit Insurance Fund for at least $250,000.Federal Deposit Insurance Corporation for up to $250,000 per account.Deposit Insurance Fund for at least $100,000.Federal Deposit Insurance Corporation for up to $1,000,000 per account. Deposit Insurance Fund for at least $250,000.
The Federal National Mortgage Association (FNMA) sells seasoned mortgages and deeds of trust to individual investors and financial institutions. A seasoned mortgage is one that has beenin existence for some time and has a good record of repayment by the mortgagor.in existence for some time and has a good record of repayment by the mortgagee.in existence for more than ten years and has a fair record of repayment by the mortgagor.in existence for some time and has been certified by the FDIC. in existence for some time and has a good record of repayment by the mortgagor.
Which is not an agency that deals (buys loans) in the secondary market?Government National Mortgage AssociationFederal Home Loan Mortgage CorporationFederal Housing AdministrationFederal National Mortgage Association Federal Housing Administration
All of the following purchase mortgages from savings and loans in the secondary market EXCEPT theGovernment National Mortgage Association.Federal National Mortgage Association.Federal Home Loan Mortgage Corporation.Federal Housing Administration. Federal Housing Administration.
A mortgage in which the lender participates in the income of the mortgaged property beyond a fixed return is calledparticipation financing.coop-purchase money mortgaging (CMM).wraparound financing.co-underwriting mortgage partnering. participation financing.
The Federal National Mortgage Association is authorized to purchase which of the following types of mortgage loans?FHA onlyVA onlyFHA and VA, but not conforming conventionalFHA , VA, and conventional FHA , VA, and conventional
An advantage of real estate investment is tax savings, the capital gain exclusion on a principal residence excludes the gain up to$250,000 per individual (up to $750,000 for a couple).$250,000 per individual (up to $500,000 for a couple).$500,000 per individual (up to $1,000,000 for a couple).$500,000 per individual (up to $750,000 for a couple). $250,000 per individual (up to $500,000 for a couple).
Truth In Lending applies to all of the following, exceptcommercial property.residential loans.federally related 1-4 family properties.family farms. commercial property.
hich of the following mortgage closing transactions require compliance under TRID rules?Unimproved propertyReverse mortgagesHome equity loansMobile homes Unimproved property
The Real Estate Settlement Procedures Act and Regulation Zprohibits lenders from discriminating in the granting of credit to consumers.mandates material fact disclosures by brokers.apply to both residential and commercial properties.are separate acts dealing with separate financing issues. are separate acts dealing with separate financing issues.
What is the latest date that a settlement agent is allowed to provide the seller with the Closing Disclosure?Three days before consummation of the mortgageAt consummation of the mortgageThree business days before consummation of the mortgageSix business days before consummation of the mortgage At consummation of the mortgage
Unsophisticated investors should seekadvice from only their broker as they know everything.advice from a stockbroker before investing in real estate.legal and tax counsel before making any real estate investments.Never purchase investment real estate. legal and tax counsel before making any real estate investments.
Purchasing an investment property , like an apartment complex may be more rewarding if the investor has the requiredcomputer skills.trade skills.management skills.human relations skills. management skills.
The Truth-in-Lending Act applies to which of the following?An owner extends a second mortgage to a buyer.A broker assists a buyer with finding an available source of credit.An advertisement for a house for sale by a broker which discloses financing terms.A broker recommends that a buyer go to a bank of their choice and get pre-qualified for a loan amount. An advertisement for a house for sale by a broker which discloses financing terms.
Which of the following laws require(s) that finance charges be stated as an annual percentage rate (APR)?Equal Credit Opportunity ActReal Estate Settlement and Procedures ActFair Housing ActTruth in Lending Act, Regulation Z Truth in Lending Act, Regulation Z
RESPA requires lenders to provide a HUD “Guide to Settlement” booklet and a Good Faith Estimate (GFE) of all costs related to settlement to borrowers within5 days of loan application.3 days of loan application.2 days of loan application.at time of loan application. 3 days of loan application.
Purchasing an investment property , like an apartment complex may be more rewarding if the investor has the requiredcomputer skills.trade skills.management skills.human relations skills. management skills.
Under the ECOA, a lender can base lending decisions on all of an individual’s information, exceptmarital status.job stability.credit rating.net worth. marital status.
The following real estate financing statements all contain trigger terms under Regulation Z of the Truth in Lending Act, except”Only $12,000 down and $750 a month payments”.”Owner financing available at 6%.””Great assumable low interest rate loan”.”Easy to qualify on this 30 year loan.” “Great assumable low interest rate loan”.
A primary purpose of the Truth in Lending Act is toenforce usury mortgage laws.set and standardize loans on FHA and VA mortgages.protect lenders from losses due to foreclosure.make loan cost information readily available to consumer borrowers. make loan cost information readily available to consumer borrowers.
A settlement agent must provide the seller with the Closing Disclosurethree days before consummation of the mortgage.at consummation of the mortgage.three business days before consummation of the mortgagesix business days before consummation of the mortgage at consummation of the mortgage.
The Truth-in-Lending Act applies to which of the following?An owner extends a second mortgage to a buyer.A broker assists a buyer with finding an available source of credit.An advertisement for a house for sale by a broker which discloses financing terms.A broker recommends that a buyer go to a bank of their choice and get pre-qualified for a loan amount. An advertisement for a house for sale by a broker which discloses financing terms.
Which of the following mortgage closing transactions require compliance under TRID rules?Unimproved propertyReverse mortgagesHome equity loansMobile homes Unimproved property
Real estate is generally a good investment because itis highly liquid.keeps up with inflation trends.is inflation proof.delivers a very high return for no risk. keeps up with inflation trends.
The Smiths’ purchased a residence for $75,000. They made a down payment of $15,000 and agreed to assume the seller’s existing mortgage, which had a current balance of $23,000. The Smiths’ financed the remaining $37,000 of the purchase price by executing a second mortgage whereby the seller became a mortgagee. This type of loan is called aWraparound mortgagePackage mortgageBalloon notePurchase money mortgage Purchase money mortgage
A home improvement company was negotiating with a home owner to add two rooms onto a home. The company agreed to take a second mortgage as long as the homeowner also included the rest of the property in the loan. The company and the homeowner agreed to a price and the company provided the necessary disclosure form on Monday and the homeowner signed the agreement at noon the following day. Assuming that the week had five business days, until what time could the homeowner rescind the loan?Tuesday, midnightThursday, midnightFriday, midnightThere is no rescission on a house. Friday, midnight
A house sold for $42,000. The buyer made a 20% down payment. Monthly interest on the loan was $252. What was the interest rate on the loan?5%7%9%11% 9%
Which of the following is considered a conventional loan?FHA insuredVA guaranteedCommercial bank ARM loanFNMA mortgages Commercial bank ARM loan
When the lender under a deed of trust required title insurance, who would be the most likely person to pay for it?The mortgageeThe trusteeThe trustorThe beneficiary The trustor
A buyer wants to take out an FHA loan. The broker should refer the buyer directly to ______________any approved lending institution such as a bank or savings and loan association.an FHA appraiser in the area.the Federal Housing Administration office.the Federal National Mortgage Association. any approved lending institution such as a bank or savings and loan association.
An increase in the availability of money would lead to which effect?Interest rates would go up.Interest rates would go down.Interest rates would NOT be affected due to RESPA guidelines..Interest rates would NOT be affected due to TRUTH IN LENDING. Interest rates would go down.
Under Regulation Z, consummation is defined as the time when a consumerrequests a loan application.becomes contractually obligated on a credit transaction.is within three days of closing a transaction.is given a completed Loan Estimate. becomes contractually obligated on a credit transaction.
The primary purpose of Truth in Lending is to _____________control interest rates on behalf of the consumer.control the true costs to close a transaction.disclose the true costs of only an FHA loan.disclose the true costs of obtaining credit. disclose the true costs of obtaining credit.
An impound or reserve account MOST benefits whom?The borrowerThe lenderThe trusteeThe trustor The lender
The clause in a trust deed or mortgage which permits the mortgagee to declare the entire unpaid sum due upon a default by a mortgagor is called a(n) ______________judgment clause.acceleration clause.escalator clause.forfeiture clause. acceleration clause.
Which transaction requires a securities’ license?Leasing a commercial buildingSelling a commercial warehouseSelling shares in Fannie MaeArranging a sale-leaseback on a commercial property Selling shares in Fannie Mae
RESPA would prohibit which of the following acts?SteeringPaying of kickbacksBlockbustingRedlining Paying of kickbacks
Discrimination is prohibited in lending practices under _____________ECOA.RESPA.Truth in Lending Act.FNMA. ECOA.
Which of the following would usually occur in a sale-and-leaseback transaction?The seller gets a return on the purchase in the form of rental payments.The property is sold on the condition that the new owner lease it back to the seller at the time title passes.The buyer keeps capital in inventories rather than in realty.The rent that the seller pays is not income-tax deductible The property is sold on the condition that the new owner lease it back to the seller at the time title passes.
Which of the following describes a mortgage that requires principal and interest payments at regular intervals and calls for the liquidation of the debt by periodic installments until the debt is satisfied?Amortized loanAnnuity loanAcceleration loanAssemblage loan Amortized loan
In an installment land contract, what type of title did the seller retain?JointLegalEquitableRecord Legal
The Loan Estimate must be delivered to an applicantat the time the loan request is first made.within three calendar days prior to closing.within three calendar days of loan application.within three business days of loan application. within three business days of loan application.
In which of the following markets may a lender sell a loan that a mortgage banker has previously originated?Primary marketSecondary marketMortgage marketConsumer market Secondary market
The finance charges recorded on the Truth in Lending statements would include all of the following EXCEPT:Loan fees charged by the lenderInsurance premiums for mortgage insurance paymentDiscount points and service feesRecording fees and title insurance premiums Recording fees and title insurance premiums
Why would a mortgagee (beneficiary) have an appraisal on the property?To make sure the buyer did not pay too muchTo determine the value of the propertyTo protect the buyer from fraudTo assure the property value is sufficient to cover the loan To assure the property value is sufficient to cover the loan
A buyer wanted to use a promissory note for consideration on the purchase of a property. Can he do this?Yes, the buyer can do as he wishes since he is making the contract.Yes, this is acceptable as long as the seller agrees.No, only money can be used for consideration.No, only the seller can write a promissory note. Yes, this is acceptable as long as the seller agrees.
In a repayment of a mortgage loan, which type of interest is used?SimpleDiscountCompoundFloating Simple
The Pickets are purchasing a home for $78,000 and the lender is giving them a 90% loan at 10% interest, plus a 2% loan origination fee. How much is the loan origination fee?$1,404$1,560$1,650$7,020 $1,404
On an 8% straight term loan of $6,071 the borrower paid total interest of $1,700. How long did he have the loan?30 months36 months42 months48 months 42 months
An owner advertised “beautiful acreage only $5,000 down, owner will personally finance down payment.” Would this be in violation of the Truth in Lending Act?Yes, acreage is not exempt from Reg Z.Yes, since a down payment was stated.No, owners are not covered by Reg. Z.No, brokers can advertise the down payment. No, owners are not covered by Reg. Z.
Which of the following is true of a second mortgage?It has priority over a first mortgage.It cannot be used as a security instrument.It is not negotiable.It is usually issued at a higher rate of interest. It is usually issued at a higher rate of interest.
the veteran certifies the rent collected will equal the mortgage payments.the loan will be amortized for not more than 20 years.the down payment will be at least ten percent.the veteran agrees to live there. the veteran agrees to live there.
Who is NOT an originator of primary loans?Savings and loansCredit unionsMortgage brokersFHA FHA
The discount points charged by a lender on a federal VA or FHA loan are a percentage of the ________________sale price.appraised price.loan amount.down payment. loan amount.
Usury MOST nearly means ______________making loans without the benefit of co-signors.lending money at fluctuating interest rates.being capable of multiple usage.illegal interest. illegal interest.
Under an FHA graduated payment mortgage, which of the following fluctuates over the term of the loan?Interest rateMonthly paymentsFinance chargeAnnual rate Monthly payments
If a single parent is applying for a real estate loan, when would the fact have to be revealed that part of the parent’s income is from child support?When applying for a VA or FHA loan if the parent’s income is less than $25,000If more than 50% of the parent’s income is non-wage sourcesIf the parent was relying on the income for repayment of the loanThis type of income never needs to be disclosed. It would be a violation of ECOA. If the parent was relying on the income for repayment of the loan
The lender is not insured or guaranteed against a loss, by reason of the borrower’s default in repayment, under which type of loan?FHAConventionalVAGI Conventional
All of the following are true of conventional loans except what?They are made to the buyer without governmental insurance or guarantee.The policy requirements of the lenders are not uniform.The requirements to qualify are uniformly fixed by state law.They require a higher down payment than non-conventional loans. The requirements to qualify are uniformly fixed by state law.
An owner was selling his own home. Can he advertise the down payment?No, because it violates RESPANo, because it violates Regulation ZYes, as long as it was listed with a brokerYes, because it was his own home Yes, because it was his own home
A borrower bought a $74,000 house with no down payment. The loan was probably ______________a conventional insured loan.a VA loan.a FHA loan.a conventional loan. a VA loan.
_____ is the cost per thousand that is required to create the principal and interest payment necessary to pay off a loan.A rateA pointA factorA power factor
A mortgage broker _____________arranges loans between borrowers and investors.is a lender.buys mortgages in the secondary mortgage market.buys mortgages and resells them at a profit.
Effective October 1, 2015, the real estate industry has new requirements as specified in theHUD-1A Rules.TILT/RESPA Loan Disclosure (TRLD) Rule.Consumer Protection Rules (CPR).TILA/RESPA Integrated Disclosure (TRID) Rule. TILA/RESPA Integrated Disclosure (TRID) Rule.
When the amortized payment of a mortgage remains constant over the period of the loan but leaves an outstanding balance to be paid at the end, this payment is called:An escalation paymentA balloon paymentA satisfaction paymentAn acceleration payment A balloon payment
The maximum permissible “loan to value ratios” are _____________based on sale price or appraised value, whichever is lower.not determined by federal statute in the case of FHA loans.based on the banker’s competitive market analysis.fixed by law for conventional loans. based on sale price or appraised value, whichever is lower.
A mortgage company makes a number of loans to be assembled into one package and sold to permanent investors. This process is an example of interim financing to the mortgage company and is called:Blanket financingPacking financingWarehousingDiscounting Warehousing
The seller under a land contract is called _____________the grantor.the grantee.the vendor.the vendee. the vendor.
If advertised alone, which would be in violation of TRUTH IN LENDING?”FHA financing available””Assumable loan””No down payment required””Easy financing terms” “No down payment required”
On a $50,000 loan the borrower is required to pay 2 points. How much does the borrower have to pay the lender?$49,000.00$50,000.00$51,000.00$52,000.00 $51,000.00
In most states, by paying the debt after a foreclosure sale, the mortgagor has the right to regain the property. What is this right called?Equitable right of redemptionOwner’s right of redemptionVendee’s right of redemptionStatutory right of redemption Statutory right of redemption
A standardized yardstick expressing the true annual cost of borrowing is expressed as a/anECOARegulation ZAPRRESPA APR

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