Course 6

Between 1931 and 1935, there were 250,000 foreclosures per year, and by 1935, _____ percent of all homes were owned by lenders

20

Which FHA program enables the purchaser to borrow the purchase price of a property and money for repairs in one loan?

203k

FHA loans are available for which people?

Any legal resident of the US

By what funds is a temporary buydown typically paid?

Buydown fund

The Dodd-Frank Wall Street reform law created an independent agency to set and enforce clear, consistent rules for the financial marketplace. What is the name of the agency?

Consumer Financial Protection Bureau

Some FHA lenders have the authority to approve FHA loans in house. This is called _______.

Direct endorsement

quiz - What is the central bank of the United States?

Federal Reserve

lesson 4 - Most home purchase loans are through primary lenders, which include all but which of the following?

Federal home loan bank

What is a mortgage company?

Financial institution that is non-depository but instead manages the investment capital of large investors

Which of the following is NOT an example of a title limitation?

Frauds (limitations: easements, liens)

In addition to a $10,000 senior citizen tax deduction, in Texas the school taxes become _______.

Frozen

Licensee Bob has a buyer client that has found a piece of property he plans to pay cash for. The client wants to save money and is considering not getting a title policy. What should Bob do?

Give the buyer the written title notice and tell him to discuss it with an attorney.

What are some of the major players in the secondary market?

Government sponsored enterprises

The underwriter making the loan decision will consider the borrower's _______.

Income, money in the bank, and credit score and debt

Conventional loans can be _____

Insured by private companies

What is Freddie Mac's automated electronic underwriting system?

Loan Prospector

What is the responsibility of the U.S. Mint?

Manufacturing and distributing U.S. coins

If the payment being made is not sufficient to cover the interest due for any payment period, the unpaid interest is added to the principal balance. This is _______.

Negative Amortization

The title is in whose name with a deed of trust?

New Owner's name.

Sam is getting a reverse mortgage. Will his transaction require the use of the new Loan Disclosure and the new Closing Disclosure?

No

Common tax-deductible expenses (for income tax purposes) associated with real estate purchase and ownership include all of the following except _______.

Private mortgage insurance (deductible: mortgage interest, real estate taxes, discount points)

Which of the following mortgages would NOT likely have a change in the monthly payment over the term of the loan?

RAM (reverse annuity mortgage)

Which entity is a registered company that buys and manages commercial real estate?

REIT

Which company is NOT a government sponsored entity (GSE)?

REMIC (entities: FNMA, FHLMC, GNMA)

quiz - Which entities assemble mortgages into pools and issues pass-through certificates, multiclass bonds, or other securities to investors in the secondary mortgage market?

Real Estate Mortgage Investment Conduits (REMICs)

quiz - Which act is designed to help consumers compare the costs of credit from different lenders with one another and to protect consumers from unfair and inaccurate credit practices?

TILA

A dollar for dollar reduction in the appraised tax value of a property is a _______.

Tax deduction

lessom 3 - The Truth in Lending Act is designed to do all but which of the following?

Tell banks how must interest they may charge

Which act, passed in 1932, gave the savings and loan companies the authority to offer 20-year, fixed rate, fully amortized loans for the first time?

The Federal Home Loan Bank Act

lesson 2 - The Fed has at its disposal three tools for implementing its monetary policy by influencing the money supply. These include all but which of the following?

The Federal Home Loan Bank Act

Which of the following acts limits the amount of funds a lender may keep in an escrow account for the payment of taxes and insurance?

The Real Estate Settlement Procedures Act

Who is responsible for borrowing money necessary to run the federal government?

The U.S treasury

Which of the following statements about property tax exemptions is TRUE?

They decrease the value on which the owner will be taxed.

lesson 7 - The conventional fixed-rate mortgage is the most basic type of mortgage available. All but which of the following are true about conventional loans?

They never follow Fannie Mae and Freddie Mac guidelines.

What is (are) the qualifying income ratio(s) for conforming loans?

Total debt service ratio of 36%

Which of the following loan programs is NOT insured by the FHA?

Wraparound mortgages

What are the responsibilities of the newly created Consumer Financial Protection Bureau (CFPB)?

all

What is the big difference between mortgage brokers and mortgage bankers?

all

lesson 9 quiz - Which of the following is a lender closing cost?

all

What is the purpose of the Loan Estimate?

all (The Loan Estimate ensures the borrower has all the information about the loan to shop for money and the information clearer.)

What are the goals of the consumer financial protection bureau?

all of the above

quiz: What is NOT an alternative to foreclosure?

assumption (Alternatives to foreclosure include short sales, deeds in lieu of foreclosure, modifications, forbearance and refinancing.)

According to CFPB, when must the parties receive a copy of the Closing Disclosure form?

at least 3 days prior to closing

Who pays the premiums for private mortgage insurance (PMI) and whom does it insure?

borrower pays them to insure the lender

Which type of conventional loans complies with the guidelines set by Fannie Mae and Freddie Mac and thus can be sold on the secondary market to Fannie Mae and Freddie Mac?

conforming

test - Which of the following mortgages is a common type of open-end mortgage?

construction mortgage

Convertible balloon mortgages are usually convertible to which type of mortgage?

conventional fixed rate mortgage

To determine the value of a highly specialized building, like a museum, an appraiser would most likely use and heavily weight which of the following appraisal methods?

cost approach

How will a lender determine how well a borrower pays his or her bills?

credit report

quiz - When the supply of real estate exceeds the demand for real estate, what happens to prices?

decrease

What is Fannie Mae's automated electronic underwriting system?

desktop underwriter

What is the rate at which the Feds loan money to their member banks?

discount rate

lesson 6 - Any lien, restriction, encroachment, or claim on a property is known as a(n) _______.

encumbrance

Some states, including Texas, allow borrowers to redeem their property prior to the foreclosure auction. This is called _______.

equitable redemption

Loans guaranteed by the Veterans Administration (VA) usually require which of the following things?

funding fee

Which of the following is an example of a prepaid item?

hazard insurance

Which of the following could cause real estate prices to fall?

increase in interest rate

What is the purpose of the majority of FHA programs?

insure private loans

Which of the following statements is TRUE of the FHA's mortgage insurance premium?

it is partially refundable in some cases

What is a legal claim against property for a debt?

lien

In the fall of 2015, the initial Truth in Lending form and the Good Faith Estimate became one form. What is the title of the new form?

loan estimate

Which property owner expenses are tax deductible?

loan interest

lesson 5 - A real estate investment trust (REIT) is a registered company that owns and operates commercial real estate. The three types include all but which of the following?

loan trust

lesson 8 - FHA insures loans that are made by lenders. The cost of the insurance is paid by payment of a _______.

mortgage insurance premium

quiz - What do lenders NOT consider when qualifying a buyer for a loan?

number of children

What do REMICs issue to investors in the secondary mortgage market?

pass - through certificates

Which of the following clauses in the loan contract allows the lender to foreclose without judicial proceedings?

power of sale clause

quiz - What does the FDIC define as "imposing unfair and abusive loan terms on borrowers"?

predatory lending

When the borrower goes to a mortgage loan officer to apply for a loan, she is talking to someone in the _______.

primary market

Texas offers tax exemptions for all of the following EXCEPT _______.

property owned by low income families

quiz - What is one of the most important types of private financing from home buyers' point of view?

seller financing

In which transaction does the lender allow the borrower to sell the property for less than the amount due on the loan and still give the buyer clear title to the property?

short sale

lesson 10 -Non-judicial foreclosures are also known as _____ foreclosures

strict

In Texas, a person who buys a property at a foreclosure auction will receive a _______.

trustee's deed

In an individual action, the creditor may be held liable for _______ the amount of the finance charge involved.

twice

If a borrower is self-employed, how will the underwriter verify their income?

two years tax income returns