sec3 mod 6

Assuming the loan is approved, it is usually approved "with conditions," referred to as:

conditional loan approval.

Just before closing, the buyer should:

conduct a final walk through of the home.

When the borrower becomes contractually obligated to the lender on the loan is known as:

consummation

A __________ is any document, claim, unreleased lien, or encumbrance that might invalidate or impair the title to real property or make the title doubtful.

cloud on title

A __________ is a title report made as a condition of the sales contract.

commitment of title insurance

All of the following are typical inspections a buyer should schedule, except: home inspections. structural pest inspections. radon and water intrusion inspections if required. comparable sales price inspections.

comparable sales price inspections.

What is a trust account for funds set aside for future, recurring costs relating to a property?

An impound account

Depending on the lender's turn-around time and volume, the review stage can take anywhere from __________ hours.

24-96

Lenders must ensure that borrowers receive the Closing Disclosure no later than __________ before consummation.

3 bus. days

Schedule "A" of the Title Commitment provides general information, such as the:

All of the items are part of Schedule A.

Schedule "_____" details the items excluded from coverage. This list also shows up in the promulgated sales contracts.

B

Schedule "_____" simply discloses title company information and fee recipients.

D

Which parties typically negotiate the allocation of closing costs associated with a sales transaction?

The buyer and seller

The federal __________ requires lenders and servicers to provide borrowers with pertinent and timely disclosures regarding the nature and costs of a real estate settlement process.

Real Estate Settlement Procedures Act

In order to transfer legal title to the buyer, the seller needs to provide:

clear title to the buyer

Which of the following sets out the requirements that must be met in order for the title agent to issue the title policy?

Schedule C - items that need to be cured

Once the sales contract is agreed to and signed by the seller and buyer, who may alter the contract?

Seller and buyer together, if they both agree in writing to the change

Which of the following is one of the common problems that can arise prior to the closing process?

The buyer is unable to obtain a mortgage loan

Which of the following is not true regarding a buyer's arrangement for a homeowner's fire and hazard insurance policy? The policy is written on the property being purchased. The lender will require the house to be insured for at least the amount of the loan. The buyer will only pay the first year's premium. The buyer must pay a specific amount to start the escrow account.

The buyer will only pay the first year's premium.

Which of the following is not true regarding funding? The term "funding" usually refers to the time the lender actually provides the money to finance the loan. The funding of a loan will occur before all of the lender's PTF conditions have been satisfied. The lender funds the loan by wire transferring the loan funds to the title insurance company. The escrow officer tells the buyer to deliver the down payment plus other escrow costs, to the title company.

The funding of a loan will occur before all of the lender's PTF conditions have been satisfied.

The term that describes the completion of a property transaction that includes signing documents that transfer title of the property from the seller to the buyer and distributing funds is called:

closing

Which of the following is the foundation for the title insurance policy?

The title commitment

What protects the policyholder from losses due to a problem in the chain of title?

Title insurance

The expenses buyers normally incur in the transfer of ownership of real property are the:

closing costs

For loans that require a Loan Estimate and that go to closing, lenders must provide borrowers with a:

closing disclosure

Some of the settlement statements used for residential real estate transaction are the: Closing Disclosure. standardized ALTA settlement statement. HUD-1 Settlement Statement. all of the choices apply.

all

The prior to documents conditions are important because they are used by the underwriter to make sure that the borrower qualifies for the loan. Therefore, the underwriter may require more: income documentation. verification of employment. deposits. all of the choices apply.

all

When determining who is responsible for the closing costs, the closing costs: may be paid in full by the buyer or the seller. negotiated between the two parties, or prorated. prorated. All of the choices apply.

all

Which of the following is true regarding RESPA? RESPA applies to "federally related" mortgage loans. RESPA requires lenders to provide borrowers with pertinent disclosures regarding the nature and costs of a real estate settlement process. most residential real estate loans fall under the RESPA guidelines. All of the choices apply.

all

Which of the following is true regarding prior-to-funding (PTF) conditions? PTF conditions are conditions that are still outstanding. PTF conditions are conditions that have come up when the lender does the pre-funding credit reviews The escrow officer works with the buyer or seller to clear any PTF conditions to facilitate the funding process. All of the choices apply.

all

Most real property closings in Texas are conducted by escrow officers employed by title companies or by:

attorneys who are entitled to close transactions on behalf of title companies.

Conditional loan approval is the __________ of the closing process.

beginning

It is the escrow officer's job to follow the:

buyer's and seller's instructions.

Some standard loan conditions include all of the following, except: clear title. appraisal value exceeds mortgage amount. earthquake insurance. mortgage insurance.

earthquake insurance

Once the lender has received the completed loan package, it typically is given to a(n) __________ to review and check that all necessary documents are signed and included in the package.

funder

Most purchase offers have a(n) __________ written into them, so that if the home inspection reveals serious problems, the purchaser can back out without penalty.

inspection contingency

In a typical transaction, a buyer's closing costs includes all of the following, except: settlement fees. recording fees. listing agent fees. lender fees.

listing agent fees.

The __________ states that the lender is committing to lend to the borrower according to the terms stated in the commitment letter.

loan commitment letter

After the buyer and seller sign the sales contract, any changes must be made:

mutually by buyer and seller.

After the lender completes the funding review, it may provide escrow with a list of any additional "__________" conditions.

prior-to-funding

One of the responsibilities of a seller prior to closing is to:

provide clear title

All of the following occur once all the terms and conditions of both parties have been fulfilled in a closing, except the:

seller orders a title search.

A __________ is a written document stating that an onsite sewage disposal system has been inspected and found to be in satisfactory condition according to established standards.

septic certification

A(n) __________ is a statement that summarizes the final costs in a real estate sales transaction.

settlement statement

Frequently, lenders require an inspection of the home to make sure there is no serious damage caused by termites and carpenter ants. This type of inspection would be a:

structural pest inspection.

Other loan conditions include all of the following, except: property condition contingencies, such as repairs that must be complete before closing. tax contingencies, such as full payment of property tax prior to closing. document contingencies, such as additional documents that the lender wants as proof of income. other requirements, such as the loan may be contingent on the sale of other property.

tax contingencies, such as full payment of property tax prior to closing.

Who typically handles escrow closings in Texas?

title companies

A __________ is a thorough examination of a water well, including water flow, water quality, pump motor performance, as well as an inspection of the pressure tank and pressure switch contact to ensure optimum performance.

well inspection