Total Exam Practice

The market value on Jenna's home is $180,000. She owes $155,000 on the property. What is her equity in the home?

$25,000

Title insurance on a property is $1740.90. The fee for the title search is $375, the cost of preparing papers is $75, and other miscellaneous fees amount to $60.10. If the seller pays 60% of the total charge and the buyer pays the balance, to the nearest dollar, how much MORE will the seller pay than the buyer?

$450

Sales price $175,000. LTV is 85%. Interest rate is 4.75%. Term is 30 years. Closing date is August 20th. Using a calendar year, calculate the amount of interest paid the first full month.

$588.80 You need mortgage amount and interest rate. $175000 * 85% = $148750 (mortgage amount). Multiply the mortgage amount by the interest rate. $148750 * 4.7% = 7065.625. Since that is 12 months of interest, we only need 1 month. Divide it by 12. $7065.625 / 12 = $588.80

A loan for which the lenders' only remedy in case of default is to repossess the property being financed.

Non-recourse loan

The buyer and seller temporary residential lease forms are good for any period up to 90 days.

True

Credit instrument

The evidence of indebtedness.

A plaintiff files a lawsuit against a licensee for a property that was later determined to have termite damage. The licensee was unaware of any damage at the time of the property sale. The type of insurance that protects the licensee in this situation is:

errors and omissions insurance

When private property is abandoned, the state may acquire title to that property under the right of:

escheat

If buyers purchased a home for $142,500 and secured a loan for 100 percent of the purchase price, which of the following types of loans did they most likely obtain?

VA-guaranteed

Which of the following is not allowed under FHA loans?

Vacation Home

Which act is designed to enhance consumer protection by requiring the FDIC, National Credit Union Administration, Board of Governors of the Federal Reserve System and others to jointly develop and maintain a Federal registration system for individual employees of Agency regulated institutions who en

Safe

SAFE

Secure and Fair Enforcement for Mortgage Licensing Act of 2008 ("SAFE Act")

HUD-1

Settlement Statement was a standard form in use in the United States of America which was used to itemize services and fees charged to the borrower by the lender or broker when applying for a loan for the purpose of purchasing or refinancing real estate.

The Housing and Urban Development (HUD) settlement statement includes which of the following information?

The buyers' and sellers' closing costs

Origination Fee

The expenses, which a lender incurs while processing a mortgage loan application, are recovered from the borrower as:

Communities Reinvestment Act

designed to encourage commercial banks and savings associations to help meet the needs of borrowers in all segments of their communities, including low- and moderate-income neighborhoods.

If the value of a property is affected by negative forces outside the property which are beyond the control of the owner, this is referred to as:

economic obsolescence

4 categories of leasehold estates:

estate for years tenancy at sufferance periodic estate estate at will

.us A seller's disclosure notice is not required when the property being sold is a previously unoccupied new home.

True

Annual plants or emblements are personal property

True

The borrower is allowed to use an FHA loan for four-plex if he is to occupy one of the units.

True

TILA

Truth-In-Lending Act

Joint Tenancy

the holding of an estate or property jointly by two or more parties, the share of each passing to the other or others on death.

Estate in severalty

the tenant holds in his own right, without being joined in interest with any other person; - distinguished from joint tenancy, coparcenary, and common.

When a husband and wife take title to a property as tenants in common, they have elected a form of ownership that allows for:

unequal shares of ownership

The lender and borrower agree to adjust the interest rate periodically to a new interest rate based on a predetermined index in the economy. This is a ____________ mortgage.

Adjustable rate mortgage

The Americans with Disabilities Act (ADA) deals with:

A) commercial property

Which is not a physical characteristic of land?

Situs

C) Administration Procedures Act `

Which law requires federal agencies who make rule to have a 30 day delayed effective date?

A lender's title policy will protect the:

lender against existing, undiscovered title defects

Alienation clause

A clause in a mortgage contract that requires full payment of a balance of a mortgage at the lender's discretion if the property is sold or the title to the property changes to another person.

Money

A current medium of exchange collectively in the form of coins and banknotes.

Package Mortgage

A mortgage that includes real estate and personal property is a:

Assumption Clause

A provision in a mortgage contract that allows the seller of a home to pass responsibility to the buyer of the home for the existing mortgage.

A broker is typically considered to be which of the following types of agents?

A special agent

REIT

A type of real estate company modeled after mutual funds.

Deed of Trust

A written legal instrument that embodies the agreement between a lender and a borrower to transfer an interest in the borrower's property to a neutral third party to secure the payment of a debt by the borrower.

Fraud is:

A) A crime B) A civil law violation ... BOTH

Notes, bonds, certificates, mortgages, leases or other agreements between a lender and a borrower are collectively called:

A) Credit Instruments

If you engage in a short sale or your mortgage lender forecloses on your home, the Internal Revenue Service treats it just like a sale.

A) TRUE

The special provisions paragraph of the contract allows licensees to insert:

A) factual business details B) info where is not trek promulgated addendum, lease or mandatory form C) statements not addressed in the contract

Tenancy by the entirety

An interest in property that can be held only between a husband and wife in which each party has a right of survivorship over the property and which neither party can terminate without the consent of the other.

Time is of the essence means that certain items in the contract must be performed:

As specified in the contract

A seller conveys personal property with a:

Bill of Sale

CRA

Communities Reinvestment Act

This document authorizes the lender to foreclose on the property if you default.

Deed of Trust

HUD created the FHA ____________________ program to help lenders meet the high demand for FHA backed financing.

Direct Endorsement

A burden, obstruction, or impediment on the property that lessens its value or makes it less marketable.

Encumbrance

Forgiveness of a non-recourse loan resulting from a foreclosure does result in cancellation of debt income.

FALSE

Name the entity that is a publicly trade, federally chartered corporation who purchases newly originated and seasoned agricultural loans from lenders.

Farmer Mac

The ______________ fulfills its role in housing finance by providing members with access to reliable, economical funding and technical assistance, and special affordable housing programs.

Federal Home Loan Bank System

The science that describes the management, creation and study of money, banking, credit, investments assets and liabilities.

Finances

The process of taking possession of a mortgaged property as a result of the mortgagor's failure to keep up mortgage payments.

Foreclosure

The Federal Home Loan Mortgage Corporation is known as:

Freddie Mac

A ___________ is a form that lists basic information about the terms of a mortgage loan for which the consumer applied.

GFE

RESPA is a ___________ consumer protection statute.

HUD

Which is NOT a purpose of the GFE?

Helps the consumer choose the right appraiser

Which of the following best describes a purpose of general liability insurance?

Insurance that protects a company's assets if someone get injured on company property

K and R bought a house as tenants in common. If K dies, which of the following statements about ownership of the house is CORRECT?

It is divided, with R retaining R's original interest and the balance going to K's estate

A TREC promulgated New Home Contract (Incomplete) can include:

Landscaping Appliances Color choices

A developer who leases real property from the owner with the intent of constructing an office building has which of the following interests in the property?

Leasehold

A company or individual that originates mortgage loans and sells them to investors, while taking care of borrowers loan payments, records, taxes, and insurance.

Mortgage Bankers

For a sum of money negotiated between the parties, the buyer has a time period, stated in this paragraph, for the 'unrestricted right' to terminate. Which paragraph does this reference?

Option money paragraph

______________ are the amount of funds that a depository institution must hold in reserve against specified deposit liabilities.

Reserve requirements

The goal of this act was to reduce fraud by encouraging state to establish minimum standards for the licensing and registration of state-licensed mortgage loan originators.

SAFE

One of the largest buyers of securities is _________.

Pension Funds

Unscrupulous actions carried out by a lender to entice, induce and/or assist a borrower in taking a mortgage that carries high fees, a high interest rate, strips the borrower of equity, or places the borrower in a lower credit rated loan to benefit the lender.

Predatory lending

Which one of the following is NOT a 'red flag' for mortgage fraud.

Property to be paid with cash at closing

FHLB (Federal Home Loan Bank)

Provides cash advances to members, including community banks, thrifts, credit unions and community development financial institutions.

Which of following deeds should a grantor use to transfer an uncertain interest in real property?

Quitclaim

An example of this includes homesteads, community property rights, cemetery lots and water rights.

Statutory estate

This department acts as a conduit for federal funds for housing and community services.

TDHCA

TDHCA

Texas Department of Housing & Community Affairs

Which of the following, with written, consent, may act as an Intermediary?

The Broker representing the seller and buyer

SAFE Act

The SAFE Act requires licensing of loan originators under state laws that meet minimum federal requirements. HUD has established minimum standards in its final rule published in the Federal Register

Acceleration Clause

The mortgage or deed of trust will contain ___________ that permits the lender to demand that the entire balance of the loan be repaid if the borrower defaults.

RESPA

This act was designed to protect potential homeowners and enable them to become more intelligent consumers. RESPA requires that lenders provide greater amounts of information to prospective borrowers at certain points in the loan settlement process.

Due-on-sale clause

This clause insures that the borrower shall not 'sell, transfer, encumber, assign, convey or in any manner dispose of the collateralized property or any part there of without the expressed written consent from the lender.

When does title change with contract for deed?

When the buyer has completed the terms of the contract

Life Insurance Companies

______________ typically aim to build commercial mortgage loan portfolios that are diversified by property type and geography as well as in accordance with applicable investment guidelines.

Participation Loan

a collaborative loan among lenders for a loan too big for any one to handle alone

Tenancy in Common

a shared tenancy in which each holder has a distinct, separately transferable interest.

If a buyer is concerned about the presence of endangered species, toxic substances or wetlands on a property, the agent should:

add the environmental assessment addendum to the contract

Good Faith Estimate

also called a GFE, is a form that lists basic information about the terms of a mortgage loan for which you've applied.

If the breach of the contract is small you can't cancel the contract but you can sue for damages

breach of warranty

RESPA prohibits, among other things:

kickbacks and/or fees for services not actually performed during the closing process

A CORRECT statement about the owners of a condominium unit and the owners of a cooperative apartment is that they both:

must pay assessments

Situs

of property is where the property is treated as being located for legal purposes

A mortgage that includes real estate and personal property is a:

package mortgage

Sallie Mae

provides consumer banking. Its nature has changed dramatically since it was set up in 1973. At first, it was a government entity that serviced federal education loans. It then became private and started offering private student loans, although at one point it had a contract to service federal loans.

A CORRECT statement about the Federal National Mortgage Association (FNMA) is that it:

purchases certain mortgages originated by lending institutions

lender against existing, undiscovered title defects

restrictive covenants

Secure and Fair Enforcement for Mortgage Licensing Act of 2008 ("SAFE Act"),

sets a minimum standard for licensing and registering mortgage loan originators. Specific state licensing requirements can be found at the Nationwide Mortgage Licensing System Registry (NMLSR)

If the principal and the agent agree in advance how long their relationship will last, they have a:

term agreement