Law of Finance

In order to qualify for exemption from capital gains, the property must have been the primary residence for two of the previous _____ years.

5 years

At the treasury level, funds can be raised to pay for government spending by increasing borrowing and _________. (a) Raising taxes (b) Offering discounts on government securities (c) Raising the cost of real estate (d) Flooding the market with money

A

Per diem interest charged to the borrower from the day of closing through to the end of the month is called __________. (a) Interim interest (b) Probational interest (c) Closing interest (d) None of these is correct

A

The secondary mortgage market was designed to provide greater liquidity to the residential real estate market, primarily by _______________. (a) The sale of mortgage loans as investments (b) Loaning money to primary market lenders (c) Charging additional interest to borrowers (d) Funding savings institutions in areas experiencing regional shortagesc

A

What is fiat money? (a) Currency that is not backed by any precious metals. (b) Currency backed by silver and gold. (c) Currency backed by gold only. (d) Currency backed by platinum.

A

A loan with no discount points is known as a(n) ________. (a) Birdie loan (b) Par loan (c) Interim loan (d) Air loan

B

A tax lien can be classified as an involuntary lien and a _______ lien. (a) M&M (b) statutory (c) voluntary (d) equitable

B

Established in 1968, __________ operates a mortgage-backed securities program designed to facilitate the flow of capital into the housing industry. (a) Freddie Mac (b) Ginnie Mae (c) Fannie Mae (d) Farmer Mac

B

The Dodd-Frank Wall Street Reform and Consumer Protection Act, signed into law in 2010, established the ____________. (a) Office of Consumer Credit Commissioner (b) Consumer Financial Protection Bureau (c) Community Development Block Program (d) Department of Housing and Urban Development

B

The Serviceman's Readjustment Act, signed into law in ________, is more commonly known as the GI Bill of Rights. (a) 1934 (b) 1944 (c) 1834 (d) 196

B

Which statement regarding savings and loans is INCORRECT? (a) Savings and loans make loans for construction, purchase, repair or refinancing of houses. (b) Savings and loans have no state or federal charters. (c) Savings and loans are usually locally owned and privately managed (d) All of these statements are incorrect.

B

A __________ lender is one who funds mortgage loans from deposits on hand, retaining the loans long term. (a) Primary (b) Secondary (c) Portfolio (d) Private

C

A fixed-rate mortgage remains fixed for ____________. (a) 15 years only (b) The first five years, increasing at a fixed rate every year afterward (c) The entire term of the loan (d) 20 years only

C

A(n) _________ is a person, corporation or firm not otherwise in banking that provides its own funds for mortgage financing purposes. (a) Mortgage broker (b) Savings and loan association (c) Mortgage banker (d) Commercial banker

C

The Community Reinvestment Act, enacted in __________, ensures that banks serve the needs of the community in which they were chartered. (a) 1995 (b) 2010 (c) 1977 (d) 1974

C

Congress created the Federal Housing Administration in ______. (a) 1949 (b) 1939 (c) 1984 (d) 1934

D

Disadvantages of adjustable rate mortgages include possibly increased monthly payments, ___________, borrower confusion, and higher long-term costs. (a) Lower overall interest rates (b) Higher loan amounts (c) Falling interest rates during the loan term (d) The inability to refinance early

D

Major loan reforms spearheaded by the FHA have included _____________. (a) Partially amortized loans (b) High interest rates (c) No limits on borrower qualification (d) None of these are correct

D

Real estate transactions regulated by the Office of Consumer Credit Commissioner include which of the following? (a) Home equity loans (b) Home improvement loans (c) Secondary mortgages (d) All of these transactions are regulated by the Office of Consumer Credit Commissioner

D

The Housing and Economic Recovery Act was enacted in _____________, and created the Federal Housing Finance Agency (FHFA). (a) 1938 (b) 1968 (c) 1992 (d) 2008

D

The ____________ is the interest rate a reserve bank charges eligible financial institutions to borrow funds on a short-term basis. (a) Basis point (b) Index rate (c) Consumer price index (d) Discount rate

D

The ______________ loan was developed by HUD for the Rehabilitation and Repair of single-family properties. (a) 203(b) (b) HECM (c) Direct Endorsement (d) 203(k)

D

Which act increased the insurance coverage on all federally insured credit union accounts up to $250,000? (a) Community Reinvestment Act (b) Equal Credit Opportunity Act (c) SAFE Act (d) Dodd-Frank Wall Street Reform Act

D

Which of the following is NOT reviewed by loan underwriters to determine creditworthiness? (a) Collections, foreclosures, bankruptcies (b) Credit scores (c) Inquiries on credit report (d) Social media platforms

D

_____________ inquiries are known as neutral inquiries because they are not rated as either positive or negative on a credit report. (a) Periodic review (b) Pre-approval (c) Consumer initiated (d) All of these inquiries are considered neutral

D

. An easement for ingress and egress is known as a(n) ______. (a) encumbrance (b) lien (c) debt (d) judgement

a

Which of the following types of liens is one that is freely given, usually as collateral for a loan? (a) Voluntary lien (b) Involuntary lien (c) Specific lien (d) Statutory lien

a

The borrower is asked to provide their full name, _____________, social security number, and present address in Part III of the Uniform Residential Loan Application. (a) Gender (b) Marital status (c) Credit history (d) Employment status

b