Texas Real Estate Finance: Chapter 9 - Lender Loan Processes

When qualifying a borrower, the lender needs to verify which of the following...? The borrower's employment status The borrower's income The borrower's assets and liabilities All of the above

All of the above

Which of the following is an example of a long-term liability...? Liens Child support Taxes All of the above

All of the above

Which of the following are included as the buyer's charge on a closing settlement statement...? Broker commissions Appraisal fees Recording fees All of the above

Appraisal fees

Title that is encumbered or burdened with defects is known as...? Partial title Inferior title Clouded title Marketable title

Clouded title

The ability to deduct expenses on improvements made to income producing property is known as...? Appreciation Depreciation Buydown Write-off

Depreciation

An opinion of value is known as a/an...? A Appraisal B Statement of value C P&L Statement D Market analysis

A Appraisal

Appraisal

A written statement, independently and impartially prepared by a qualified appraiser setting forth an opinion in a federally related transaction as to the market value of an adequately described property as of a specific date. It is supported by the presentation and analysis of relevant market information. An opinion of value.

Title which a reasonable purchaser, informed as to the facts and their legal importance and acting with reasonable care, would be willing and ought to accept is known as...? Recorded title Clouded title Marketable title Unmarketable title

Marketable title

Assets minus liabilities equals an individual's...? Income Net worth Gross worth Balance

Net worth

This is a written statement, independently and impartially prepared by a qualified appraiser setting forth an opinion in a transaction, as to the market value of an adequately described property, as of a specific date...? Appraisal Comparative Market Analysis Pro-forma Statement of value

Appraisal

nder the Uniform Residential Loan Application, which of the following is considered an asset for the borrower...? Cash deposits Homeowners insurance Credit cards All of the above

Cash deposits

Actual Notice

Express or implied knowledge of a fact

Title Insurance

Insurance to protect a real property owner or lender up to a specified amount against certain types of loss (ex: defective or unmarketable title).

Sales Comparison Approach

One of the three major valuation methods, which compares a subject property's characteristics with those of comparable properties which have recently sold in similar transactions.

Income Capitalization Approach

One of the three methods of the appraisal process generally applied to income producing property, and involves a three-step process - (1) find net annual income, (2) set an appropriate capitalization rate or "present worth" factor, and (3) capitalize the income dividing the net income by the capitalization rate.

Appraiser

One qualified by education, training and experience who is hired to estimate the value of real and personal property based on experience, judgment, facts, and use of formal appraisal processes.

Which of the following is an example of a liability...? Stocks Real estate Bonds Outstanding loan balance

Outstanding loan balance

If an individual's assets exceed their liabilities, they are said to have a...? Positive net worth Negative net worth Positive credit score Positive income

Positive net worth

The division of certain settlement costs between a buyer and seller is known as...? Payout Proration Buydown Settlement disclosure

Proration

A property's NOI divided by the capitalization rate, equals the...? Gross rent multiplier IRR Purchase price Yield

Purchase price

Depreciation

The ability to deduct expenses on improvements made to income producing property.

Net Operating Income

The annual income generated by an income-producing property after taking into account all income collected from operations, and deducing all expenses incurred from operations.

Clouded Title

Title that is encumbered or burdened with defects.

Which of the following is used at the start of the loan application process...? Residential Loan Form Primary Loan Application Universal Loan Form Uniform Residential Loan Application

Uniform Residential Loan Application

The value derived from the use of something is known as...? Inherent value Utility value Value-in-exchange Value-in-use

Value-in-use

What is the most commonly used term on residential mortgages...? 7 years 10 years 20 years 30 years

30 years

What is the maximum front-end debt-to-income ratio on an FHA loan...? A 31 percent (%) B 23 percent (%) C 52 percent (%) D 16 percent (%)

A 31 percent (%)

What is the maximum back-end debt-to-income ratio on an FHA loan...? A 43 percent (%) B 23 percent (%) C 52 percent (%) D1 6 percent (%)

A 43 percent (%)

buyer should receive a/an .............prior to closing on a property? A Marketable title B Unmarketable title C Clouded title D Recorded title

A Marketable title

An attorney may issue which of the following...? A Opinion of title B Chain of title C Survey D All of the above

A Opinion of title

At closing, property taxes are ............between the buyer and seller? A Prorated B Eliminated C Transferred D Appraised

A Prorated

Survey

A document which precisely shows the property lines and size and location of improvements on a particular property.

The Uniform Residential Loan Application includes which of the following information...? Legal description of the property Names of the borrower and co-borrower The requested loan amount All of the above

All of the above

The objective of the Uniform Residential Loan Application is to identify which of the following...? The property The borrower The loan amount requested by the borrower All of the above

All of the above

This is an analysis in which a value estimate of a property is derived by estimating the replacement cost of the improvements, deducting therefrom the estimated accrued depreciation, then adding the market value of the land...? Sales comparison approach Income capitalization approach Cost approach CMA

Cost approach

Monies that are owed are considered...? Assets Taxes Liabilities Credits

Liabilities

Cost Approach

One of three methods in the appraisal process. An analysis in which a value estimate of a property is derived by estimating the replacement cost of the improvements, deducting therefrom the estimated accrued depreciation, then adding the market value of the land.

The seller is primarily responsible for paying the broker's commission at closing...? T (True) F (False)

T (True)

An appraisal determines an estimate of...? A Fair market value B Value-in-use C Assessed value D Tax value

A Fair market value

Gross Rent Multiplier

A number which, times the gross income of a property, produces an estimate of value of the property.

Proration

The division of certain settlement costs between a buyer and seller.

Unique properties are typically valued using which appraisal method...? A Cost approach B Sales comparison approach C Income capitalization approach D CMA

A Cost approach

Constructive Notice

A fact, imputed to a person by law, which should have been discovered because of the person's actual notice of circumstances and the inquiry that a prudent person would have been expected to make.

Chain of Title

A history of conveyances and encumbrances affecting the title from the time the original patent was granted, or as far back as records are available, used to determine how title came to be vested in current owner.

Abstract of Title

A summary or digest of all transfers, conveyances, legal proceedings, and any other facts relied on as evidence of title, showing continuity of ownership, together with any other elements of record which may impair title.

A summary or digest of all transfers, conveyances, legal proceedings, and any other facts relied on as evidence of title, showing continuity of ownership, together with any other elements of record which may impair title, is known as...? Abstract of title Chain of title Title history Clouded title

Abstract of title

When qualifying a borrower, the lender will do which of the following...? Determine the ability of the borrower to repay Estimate the value of the property being used as collateral Research and analyze the marketability of title All of the above

All of the above

Which of the following are included as the buyer's charge on a closing settlement statement...? Appraisal fees Credit reports Title insurance All of the above

All of the above

Which of the following are included as the seller's charge on a closing settlement statement...? Broker commissions Transfer taxes Recording fees All of the above

All of the above

Which of the following is an example of a credit bureau...? Equifax Experian TransUnion All of the above

All of the above

Something that has value is known as a/an...? Asset Liability Debit Tax

Asset

This is the rate of interest which is considered a reasonable return on the investment, and used in the process of determining value based upon net income...? Capitalization rate Gross rent multiplier Yield IRR

Capitalization rate

A history of conveyances and encumbrances affecting the title of a property, which is used to determine how title came to be vested in current owner, is known as...? Chain of title Abstract of title Title history Clouded title

Chain of title

One of the three major valuation methods, which determines the value of a property by applying a capitalization rate to a property's net operating income is known as the...? Sales comparison approach Income capitalization approach Cost approach CMA

Income capitalization approach

What information about the borrower must be included on the Uniform Residential Loan Application...? National origin Religion Marital status Race

Marital status

One of the three major valuation methods, which compares a subject property's characteristics with those of comparable properties which have recently sold in similar transactions is known as the...? Cost approach Sales comparison approach Income capitalization approach CMA

Sales comparison approach

A document which precisely shows the property lines, and size and location of improvements on a particular property, is known as a...? Roof plan RCP Topography plan Survey

Survey

Capitalization Rate

The rate of interest which is considered a reasonable return on the investment, and used in the process of determining value based upon net income.Capitalization Rate = NOI / Purchase Price

Insurance to protect a real property owner or lender up to a specified amount against certain types of loss is known as...? Homeowners insurance HO-1 insurance policy Title insurance HO-3 insurance policy

Title insurance