21.1 Quiz

A North Carolina buyer is typically responsible at settlement for paying a. title insurance. b. deed preparation fee. c. excise tax. d. brokerage fees.

a

According to TRID, loan application is defined as when the lender receives certain information from the borrower. Which of the following is NOT one of those requirements? a. Credit report b. Property address c. Amount of loan d. Estimate of property value

a

In a North Carolina closing, a. the seller is traditionally responsible for the day of closing. b. the buyer pays for the day of closing when calculating tax prorations. c. the buyer can bring to the settlement meeting the balance of funds due in the form of a bank check, a personal check, or cash. d. the buyer is entitled to possession of the property as soon as the deed is signed at the settlement meeting.

a

The North Carolina Real Estate Commission believes that a broker's responsibility for settlement statements include all the following components EXCEPT a. a broker is expected to confirm accuracy of all entries on the settlement statement b. a broker should review the entire settlement statement for completion. c. a broker is expected to verify entries known from the sales contract. d. a broker should verify that the excise tax is correct

a

The condition of the seller's title is generally determined from a a. title search. b. physical inspection of the property by the buyer. c. settlement statement prepared by an escrow agent. d. RESPA report prepared by the settlement attorney.

a

Which of the following items is NOT usually prorated between the buyer and the seller at settlement? a. Recording charges b. Real estate taxes c. Rents d. Home owner association dues

a

The Real Estate Settlement Procedures Act (RESPA) applies to the activities of a. licensed real estate brokers when selling commercial and office buildings. b. general partnerships when selling limited partnership interests. c. lenders financing the purchase of a borrower's residence. d. Fannie Mae and Freddie Mac when purchasing residential mortgages.

c

At an April 30 settlement in North Carolina, the current year property tax proration amount will appear on the settlement statement as a a. credit to the seller and a debit to the buyer. b. debit to the seller and a credit to the buyer. c. debit to the seller. d. debit to both the seller and the buyer.

b

At the settlement, the real estate brokerage commission generally appears as a a. credit to the seller. b. debit to the seller. c. credit to the buyer. d. debit to the buyer.

b

In a settlement statement, an accrued item is a. an item paid in advance. b. an item that is due but not yet paid. c. a prepaid expense. d. a double credit entry item.

b

The Real Estate Settlement Procedures Act requires a. that the closing of a transaction be held within 90 days of the date of the sales contract. b. that disclosure be made of all settlement costs prior to the closing. c. the lender to disclose the annual percentage rate the borrower will be paying. d. that lenders follow certain advertising procedures when advertising credit.

b

The process at the settlement of a real estate transaction where both the buyer and the seller pay their respective portions of the shared expenses is called a. assessment. b. proration. c. balancing. d. reconciliation.

b

The seller's principal balance and accrued interest on an assumed mortgage loan is entered on the settlement statement as a a. credit to the seller and a debit to the buyer. b. debit to the seller and a credit to the buyer. c. credit to both the seller and the buyer. d. debit to both the seller and the buyer.

b

The settlement attorney informed the seller that the buyer would receive credit for certain accrued items. These items represent a. bills related to the real estate that have already been paid by the seller. b. bills related to the real estate that are unpaid as of the time of settlement. c. all of the seller's outstanding bills. d. all of the buyer's outstanding bills.

b

The settlement statement involves the debits and credits to the parties in the transaction. A debit is a. a refund. b. an expense. c. an adjustment for an expense paid outside of settlement. d. a proration.

b

Tolerance levels for loan expenses include all of the following EXCEPT a. no tolerance. b. 5% tolerance. c. 10% tolerance. d. unlimited tolerance.

b

The selling price of a property is $96,000. This can be financed if the buyer can put 10% down and pay a loan origination fee of 1.5%. How much cash must the buyer produce to complete this transaction? a. $10,080 b. $10,896 c. $11,040 d. $11,084

b $96,000 SP × 0.10 = $9,600 DP $96,000 - $9,600 = $86,400 LV × 0.015 orig. fee = $1,296 $1,296 + 9,600 DP = $10,896 cash

All of the following are required by the Real Estate Settlement Procedures Act EXCEPT a. lenders must provide borrowers with a Loan Estimate of settlement costs. b. a uniform settlement form must be used at loan closings. c. the borrower may cancel the loan transaction within five days after settlement. d. no kickbacks may be paid to any party in connection with a loan transaction.

c

An example of a kickback that is prohibited by RESPA is a. a fee paid by the listing agent to an agent who made the referral. b. a commission shared by the listing broker with one of her provisional brokers. c. a fee paid by a surveyor to a broker for a lead on a property needing to be surveyed. d. flowers that an agent sends to the buyer as a house-warming gift.

c

As provided in a valid purchase contract, the closing of the real estate transaction includes all of the following EXCEPT a. the seller providing clear title to the property. b. the purchaser paying the balance of the purchase price to the seller. c. the broker's attendance at the settlement. d. the seller delivering the deed to the purchaser.

c

RESPA regulations apply to all of the following EXCEPT a. a residential mortgage for a single-family home. b. a construction loan for a residential home scheduled to be completed in six months. c. a loan for 30 acres of vacant land. d. a home equity loan.

c

The Real Estate Settlement Procedures Act (RESPA) provides that a. purchasers must review settlement statements two days prior to closing. b. realty ads must include all financing information if a trigger term is advertised. c. the borrower must be given an estimate of the settlement costs within three business days of loan application. d. no referral fees are allowed to be paid in connection with the transaction, and real estate agents are no exception to this restriction.

c

Which of the following statements is TRUE? a. Both the borrower's closing disclosure and the seller's closing disclosure must be delivered to the respective parties three business days prior to settlement. b. Delivery of the buyer's closing disclosure can be made to the buyer's agent only. c. If two separate closing disclosures are issued, a broker acting as a dual agent must keep the buyer's closing disclosure and the seller's closing disclosure confidential. d. The settlement agent will decide if two separate closing disclosures are required.

c

At a November 30 settlement in North Carolina, the unpaid current year tax double debit entry amount will appear on the settlement statement as a a. credit to the seller and a debit to the buyer. b. debit to the seller and a credit to the buyer. c. debit to the seller. d. debit to both the seller and the buyer.

d

Real estate firms are often affiliated with title insurance companies or mortgage brokers. These business arrangements are permitted by RESPA as long as a. consumers are unaware of these arrangements. b. consumers are required to use the services of the affiliated companies. c. the companies pay referral fees between them. d. the companies make a written disclosure of their relationship with one another to the consumer.

d

TRID refers to a. a combination disclosure of the Equal Credit Opportunity Act and the Real Estate Settlement Procedures Act. b. the Truth in Lending Act and Regulation Z. c. the Real Estate Settlement Procedures Act and Regulation X. d. an integrated disclosure of the Truth in Lending Act and the Real Estate Settlement Procedures Act.

d

The HUD settlement cost booklet and a Loan Estimate are required to be given to prospective real estate borrowers under the a. Home Mortgages Disclosure Act. b. Fair Credit Reporting Act. c. Equal Opportunity Act. d. Real Estate Settlement Procedures Act.

d

The details of a sales transaction are typically determined by the a. wishes of the seller as expressed orally. b. wishes of the buyer as expressed orally. c. instructions of the designated agents. d. terms of a properly executed purchase contract.

d