Co Closings Review
What is the proration for the real estate taxes using the 365 day method and prior year's taxes of $1245 if closing is February 15, 2010? Day of closing belongs to the seller.
$156.90 debit to the seller
Bill buyer is purchasing from Sam Seller, who has already paid the hazard insurance premium for 2010 in the amount of $300. The closing is on June 1, 2010. Day of closing belongs to the seller. Using the 365 day method on the settlement statement what will Bill be charged?
$175.07
Which of the following statements is NOT true with respect to a broker closing a transaction?
A broker can only accept wired funds
Bill Buyer is purchasing Sam Seller's home and assuming the existing loan. The interest on the loan is $1200 paid in arrears. The closing is March 1, 2009. How is the interest shown on the Worksheet?
A debit to the seller and credit to the buyer
If the buyer is borrowing money from the seller to buy the house, how is this loan shown on the Worksheet?
A debit to the seller and credit to the buyer
In which of the following situations must a 1099s form be filled out?
A married couple selling their residence for $510,000
rules for recordkeeping of escrow accounts
Bank reconciliation statement A ledger for each trust beneficiary Source docs for all receipts and disbursements
Which of the following is not a standard exception in a title commitment?
Bankruptcy
Bill Buyer and Sam Seller enter into a contract. Sam's has work done on the house but fails to pay the contractor prior to closing. Four months after closing, the contractor puts a lien on the property. Which of the following is NOT a true statement?
Bill has no remedy against Sam because even though there is an indemnification clause in the contract, the contract merges with the deed at closing, and Bill's indemnification rights terminate
Which of the following is NOT a true statement about a broker holding escrow funds and transferring them to a closing agent?
Broker is not responsible for funds after they are transferred
What are the consequences of the seller's failure to provide Association documents by the deadline set forth in the contract?
Buyer has the right to terminate for 10 days following the day in which CIC papers were delivered to him
If a seller defaults, which of the following are permitted remedies for the buyer?
Cancel the contract + get earnest money back + sue for damages Sue for specific performance
What is the purpose of discount points?
It increases the yield to lenders
Which of the following statements is not true about mediation?
Mediation procedure is binding - not binding unless the parties agree to it
Who typically pays the title insurance premium on a closing?
Seller pays the owner's policy premium and buyer pays the lender's policy premium
If the broker is not the closing agent, which of the following is the broker not required to do with respect to the closing?
Sign the settlement statement
Bill Buyer defaults on the contract and Sam Seller elects to retain the deposit as liquidated damages. What other remedies does Sam also have?
Sue for specific performance, sue for damages up to purchase price, sue for compensatory damages
Which of the following elements is NOT required for a valid contract?
The purchase price must be below market value
What is "loan to value ratio"?
The ratio representing the amount of the loan in relation to the sales price or appraised value
What happens to items listed in B2 of the title commitment?
They appear as exceptions unless removed prior to closing
Under what conditions can a broker pay or accept a fee to a provider of settlement services?
a broker can pay a fee to or accept a fee from a provider of settlement services for the services actually rendered
Broker Bob places an ad in XYZ title company's newsletter. He pays full price for the ad. Has Bob violated any Rules?
a broker cannot place an ad in a title company's newsletter even if the broker pays full price for the ad; this is a violation of the Commission rule
The "gap" exception excludes what period of time from coverage under the title commitment?
from date commitment is issued to deed recording
If broker is closing the transaction for the lender they do not need to:
if a broker is closing the transaction, then the broker needn't retain the original closing statements in his or her transaction file, etc.
If the buyer pays for the survey directly to the surveyor, how is that shown on the Closing Disclosure?
if a buyer pays for the survey directly to the surveyor, it should be itemized but the amount should read "POC" in the Closing Disclosure form
What is the limitation of liability for a title insurance company on a policy issued for $600,000? The premium was $2000.
if there is a claim, the company will only pay the amount of damages incurred by the insured; a title company is not liable for all damages incurred in reliance on the commitment by the insured
XYZ title company drafts a deed to Bob Buyer, under the Bob Buyer Trust Agreement dated January 1, 2008. Who will own the property upon closing?
if title company prepares a deed to Bob Buyer under the Bob Buyer Trust Agreement, then the property will be owned as "Bob Buyer as Trustee" after the closing
Which of the following is true, unless the contract states otherwise?
seller pays owner's policy and buyer pays mortgagee's policy
A broker holding escrow funds must...
transfer funds when requested
1099s Form Exceptions
A single person selling principal residence for less than 250,000 A transaction where consideration is less than $600 A transaction that is a gift not involving real estate
Examples of parties in possession?
A tenant living in the home of an owner Person who has easement rights to cross the property of the owner A party living openly on a property but not under a lease
Which of the following would not be a "party in possession?
An invitee in the home of the owner
Parties to a deed of trust transaction
Beneficiary = lender Trustor = property owner Trustee
All of the following are the requirements for a contingency EXCEPT
Cost of the item
Which of the following statements is incorrect:
Credits decrease what the seller will receive and increase what the buyer will bring
How is the payoff of the seller's loan shown on the worksheet?
Debit to seller and credit to buyer
How is the tax certificate fee shown on the Worksheet on a transaction with a VA loan?
Debit to the buyer and credit to the broker
What does it mean when a contract is executed in counterparts?
Each party may sign an original and the two together will be considered one contract
Which of the following is NOT true statement about schedule B2 of the title commitment?
Exceptions on B-2 cannot be removed once they appear on the commitment
Which of the following is not a true statement?
Expenses paid outside of closing don't appear on the statement
Non-confroming loans fail to meet whose underwriting standards?
Fannie Mae
What is APR?
It is the interest rate on a loan including the pre-paid finance charges
What is the purpose of the B-1 section of the title commitment?
It lists the items the title company will require in order to insure the title
Which of the following is not a party to a deed of trust transaction?
Mortgagee
XYZ title, in preparing a title commitment for a transaction set to close on July 1, 2009, comes across a deed from July 1, 1988 that is improperly acknowledged. What notation should they put on the title commitment?
None - deed is considered to be properly acknowledged 10 years after recording
Which of the following statements is not true about Fannie Mae?
Not a government agency - a federally funded enterprise
Sam Seller and Bill Buyer have a contract. The contract has a right of first refusal in favor of Otto Optionor. On the day of the Right of First Refusal Deadline, Otto calls Sam and tells him he has elected to buy the property but wants a reduction in the purchase price. What is the status of the parties?
Otto has the right to match any offers seller has received must notify the seller in writing of his decision to purchase the property before the right of first refusal deadline or their right to first refuse terminates
Which of the following is not a Rule requirement for recordkeeping of Escrow Accounts?
Preparation of disbursement schedule
Payments on a loan are applied to the account by the lender in which order of priority?
Prepayment charges, escrow, interest, principal
What kind of deed conveys no more than the interest the grantor has in the property?
Quitclaim deed
For an item a buyer pays in arrears, which of the following is true?
The buyer receives a credit and the seller receives a debit
What is the loan discount fee?
The fee the lender charges the borrower that helps the lender's yield on the loan
In a deed of trust who is the beneficiary of the trust?
The lender