RE Finance 2

Residual income and debt-to-income

A lender qualifies a borrower for a VA loan based on

buyer

A lender requires a title search to finance a transaction. Who pays for this search?

Voluntary Specific Lien

A mortgage lien is a(n) ______ lien.

sold

After bonds are ______, their value goes up and down with the market.

General Partnership

Ann went into business with Burt and Cindy and called their entity ABC Realty. They're a legal business structure but there are no state requirements to register their business. A contract between the three specifies the terms of their ownership and contributions. What business structure is this?

Blanket Lien

As part of a deficiency judgment sought by a lender, a ______ may be placed on any current and future property the borrower owns until the lender recovers all losses.

After an initial low rate, her payments may increase beyond the level of affordability.

Barb is considering a refinance. She wants to stick with a conventional loan. Why might she be wary of an introductory rate?

subprime

Borrowers who fall into the ______ category may be faced with paying interest 1% to 5% over the current market rate.

Give her lender a report of the cost estimate and energy savings from an energy consultant.

Cindy is buying an older home. It's in reasonably good shape, but she figures she can reduce her energy bills by replacing some of the windows. If she applies for the FHA Energy Efficient Mortgage program, what step must she take to receive approval?

Title II

FHA offers a program for loan insurance on adjustable-rate mortgages under ______ of the National Housing Act.

Alienation

Fannie Mae's multi-state note includes a due-on-sale clause, also known as a(n) ______ clause.

Farm Credit Services Administration

Farmer Mac is supervised by which entity?

Errors and Omissions

If your client's attorney contacts you, saying you were negligent in providing your client with service, which insurance coverage do you desperately hope you have?

borrower

In a deed of trust, who is the trustor?

5%

In the residential mortgage market, charging borrowers more than ______ over market rate for interest is considered a predatory lending practice.

Partnership between mortgagees and mortgagors

In which type of participation agreement would a financier lower the interest on the mortgage in exchange for partial ownership of the project?

Partnership between mortgagees and mortgagors

In which type of partnership is the lender a partner as well as the financier?

3 or 10

It's possible for the adjustment period on an adjustable rate mortgage (ARM) to have ranges, such as three or ______ years apart.

No, she needs to be 30 days late to be in default.

Jackie is 10 days late on her loan payment. Will her lender likely place her loan in default?

IRS Form 4506-T

Joseph is self-employed and wants to buy his first home. What additional document may he need to provide to the lender when trying to obtain a loan?

579 or lower

Margo, a mother of three, is in the group most likely to become delinquent on their payments, with a credit score of _______. Margot's tried unsuccessfully to get approved for loans, but she was issued a credit card that included many extra fees and required deposits.

Yes, she can claim a deduction based on the amount of her home she uses for business.

Mavis uses an extra bedroom in her home as her office. Can she claim this as a deduction?

involuntary and general

Max has a dog that bit his neighbor. The neighbor sued Max, which resulted in a judgment against him. Max refused to pay the neighbor according to the judgment. The neighbor placed a lien against Max. How is this lien classified?

voluntary conveyance of deed

One alternative to foreclosure is a voluntary conveyance of ____

0%

Pattie is the widow of Oscar, a member of the Army who was killed in action. When she uses the VA loan to buy her first home, what percentage of her loan amount will be charged as a funding fee?

Short Sale

Ray is in a bit of a predicament. He owes more on his mortgage than his property is worth, but can no longer afford the payments. He receives permission from his lender to sell the property for less than what he owes. What is this an example of?

formal appraisal

Rico is an appraiser who is performing a valuation on a property. What's another term for what Rico is doing?

No, they don't meet the total debt obligation requirement.

Ron and Dawn hope to qualify for an FHA mortgage so they can buy a home for their family. Their housing ratio is 28%, their total debt obligation is 45%, and their credit score is 650. Do they qualify under FHA underwriting guidelines?

No, she doesn't meet the credit score requirement.

Sandra is a single woman fresh out of college. She hopes to qualify for an FHA loan. Her lender calculates her housing ratio as 31% and her total debt obligation as 43%. Her credit score is 480. Does she qualify under FHA underwriting guidelines?

Packaging loans into mortgage-backed securities

Several actions take place on the secondary mortgage market. Which of these is a common activity?

Taiwan, U.K. and Canada

Some countries have banks that issue loans for U.S. real estate purchases. What are the main countries that participate?

Online Banks

Stacy is opening three savings accounts as part of her personal financial plan. What would be a recommended option for finding low fees and higher interest rates?

Government Sponsored Enterprise

The Farm Credit System is _

Limits for conforming loans

The Federal Housing Finance Agency established percentage targets and ______ for loans made to low- to moderate-income borrowers.

promissory note

The document that describes the loan amount and the terms for repaying and is attached to a security instrument is called the ______.

loan applicant

The lender, the employer, and the ______ all complete parts of the request for verification of employment form.

Not be delinquent on mortgage payments

To qualify for the FHA Streamline Refinance program, a homeowner must _

life insurance company

Vantagestar Ltd. would like to construct a high-end condominium complex. Where will they likely go for financing this project?

Real Estate Settlement Procedures Act (RESPA)

What does RESPA stand for?

An investor finds and closes on an investment property and then decides to immediately sell another investment property.

What is a reverse exchange?

If more equity is paid out than remains, the homeowner doesn't have to make up the difference.

What makes the HECM program safer for borrowers than a traditional reverse mortgage?

Qualified Intermediary

What type of professional must an investor use to conduct a tax-deferred exchange?

Disintermediation

What's the term for an extended period of time during which banks experience more withdrawals than deposits?

Strengthen the housing market to bolster the economy and protect consumers.

When HUD pursues actions that are designed to restore the financial health of the Federal Housing Administration, which of its goals is it supporting?

Contribute up to 6% of the sales price (or appraisal, if that's lower) to the buyer's closing costs

When a buyer obtains an FHA loan, the seller may

miss scheduled mortgage payments

When borrowers fail to pay property taxes, allow their property to go into disrepair, or ______, they could face loan default.

lender

Who's the mortgagee in a mortgage?

Credit History

Kelly is reviewing Steve's loan application. She wants to verify that he has a solid history of paying obligations on time. What should she request to do this?

Accounts in Good Standing

Lender Ron is running Sally's credit report. In which section of the credit report might Ron expect to find information regarding her loan that was paid off on time?

Consumer Financial Protection Bureau (CFPB)

Which agency sets the guidelines for qualified mortgages?

Millenials

Which generation financed their homes due to also having other debt obligations?

Mortgage REITs

Which of the following REITs focuses on lending money for mortgages and investing in mortgage-backed securities?

It involves more than one mortgagor as owner, sharing responsibility for payment of a single mortgage.

Which of the following characteristics applies to a partnership between mortgagors?

US Treasury

Which of the following has a direct responsibility to pay the nation's bills?

An emergency medical technician, teacher, law enforcement, or firefighter qualifies

Which of the following individuals would qualify to purchase a home under the Good Neighbor Program?

A short sale can negatively impact the seller's credit, and the lender may seek a deficiency judgment for the amount not repaid.

Which of the following is a potential ramification to the seller if a short sale is completed?

Inability to immediately resell the property for a profit

Which of the following is a risk most associated with wholesaling as a real estate investment strategy?

borrower

Who's the mortgagor in a mortgage?

The estimated amount the client will pay by cashier's check or wire transfer at closing

age one of the Loan Estimate includes a section called "Costs at Closing." The amount shown as estimated cash to close is

The promissory note is endorsed to the new owner of the loan.

Which of the following is a true statement about when a promissory note is sold?

Liability after Foreclosure

Which of the following is part of the Other Disclosures section?

conventional

Which of the following loans may require compliance with Appraiser Independence Requirements?

Notification of pending auction, public auction, notice of eviction

Which of the following statements best describes a foreclosure by advertisement?

The FHA may adjust the percentage used to calculate MIP on FHA loans.

Which of the following statements is true about the MIP on an FHA loan?

That any issues that arose in the previous title search have been resolved

Which one of the following assumptions does the Torrens system make?

Hybrid REIT

Which type of real estate investment trust derives its income from the rent or sale of property and interest dividends?

50%

You do a listing presentation to a potential client over lunch at a nice restaurant. How much of your meal cost is considered tax deductible?

negotiate with the seller

Your buyer, Chet, is a veteran trying to buy a house, but the certificate of reasonable value came in $10,000 lower than the agreed-upon sales price. What can Chet do?

Farmer Mac

creates a secondary market for agricultural loans by buying the loans, pooling them, and selling them as securities

Certificate of Eligibility

Which of the following tells the lender how much entitlement the veteran has available under the VA loan program?

value in use

Which of the following terms means the price a property is worth to its owner as currently enjoyed?

The Federal Housing Finance Agency

Which of the following was created as a result of the Housing and Economic Recovery Act?