Georgia Real Estate Quizes
In order to be valid, a mortgage or deed of trust must be. (All of the above is the answer)
In order to be valid, a mortgage or deed of trust must be. 1. In writing 2. Executed by the parties 3. Between competent parties 4. All of the above
Functional obsolescence
Inadequacies caused by age or design
Appreciation
Increase in the worth or value of property.
Secondary mortgage market
Market for purchase and sale of existing mortgages.
Plottage
Merging separately owned parcels into one single lot to increase value of the separate parcels.
Leverage
The use of borrowed funds to finance an investment.
An option
Which of the following is not a financing instrument? 1. A mortgage 2. A deed of trust 3. An option 4. A note
Assessed value
Real estate taxes are based upon a. fair value b. assessed value c. full value d. current value
1/12 of the annual life insurance premium
A mortgage payment (PITI), would not normally include each of the following EXCEPT: a. A payment toward the principal of the loan b. A payment toward the interest on the loan c. 1/12 of the annual real property taxes 1/12 of the annual life insurance premium
Appraisl
A supportable estimate of the value of real estate made for a specific purpose.
Liens
All mortgages are 1. Due on sale 2. Liens 3. Recorded 4. None of these choices
Equity
An owner's monetary interest in a piece of real property.
Abstract of title
Condensed history of ownership.
Trustee's deed
How someone who buys property through a nonjudicial foreclosure takes title.
Deed of trust, surrenders, bare naked title, trustee, bare, title
A ________ contract is an agreement whereby an owner pledges real property as security for a debt, and the owner _________ ___________ title to a neutral third party, known as a _____________. The neutral third party hold _______ title to the property. These contracts are in _______ theory states.
Buyer and seller
A buyer assumes a seller's loan. The buyer defaults and the lender forecloses. Who is responsible for the balance owing on the loan? 1. Buyer only 2. Seller only 3. Buyer and seller 4. Mortgagees's title insurance company
Sheriff's deed
A deed in a judicial foreclosure.
$56,000
A lender making a 80% loan for property valued at $80,000 and purchased for $70,000 would make a maximum loan of 70,000 * .8 = $56,000 a. $80,000 b. $64,000 c. $56,000 d. $14, 000
A fee charged by the lender to initiate a loan
A loan origination fee is a. Always 1% of the loan amount b. A fee charged by the lender to initiate a loan c. 1/8 of 1% of the loan amount d. A fee paid by the seller to assist a buyer obtaing a VA guaranteed loan
Covenant not to compete
A mortgage contains all of the following EXCEPT 1. Property description 2. Acknowledgement 3. Covenant not to compete 4. Signature of borrowers
Reverse mortgage
A mortgage in which payments are made from the mortgage to the mortgagor is a: a. Reverse mortgage b. Amortized loan c. Budget mortgage d. Shared appreciation mortgage
Adjustable rate mortgage
A mortgage loan that allows for increases or decreases in the interest rate at specified periods of time, is known as a. FHA graduated payment mortgage b. Adjustable rate mortgage c. Reversible loan mortgage d. Roll-over-loan
Written evidence of debt
A promissory note is best described as 1. A pledge of property 2. An earnest money deposit 3. Written evidence of debt 4. A form of unilateral contract
Tax based upon benefits received
A special assessment is a a. re-evaluation of a property's value b. tax based upon benefit received c. tax levied equally against each property owner in the city or county d. tax levied only if ad valorem tax is sufficient to fund the proposed budget.
A veteran with full entitlement may be about to do which of the following (none of the above is the correct answer)
A veteran with full entitlement may be about to do which of the following a. Purchase any home with no money down b. Purchase an investment property through a VA loan c. Obtain a guaranteed VA loan regardless of income d. None of the above
Affidavit of title
Affirmation of ownership and absence of judgments or liens.
Subordination
An agreement to waive prior rights in favor of another is 1. Subordination 2. Subrogation 3. Subornation 4. Subjugation
A restaurant that is currently rented
An appraiser would most likely use the capitalization approach for a. an owner occupied dwelling b. a public library c. a restaurant that is currently rented d. vacant land
Cost approach
Appraisal based on cost of improvements.
Competitive market analysis
Arriving at a realistic market value by comparing recently sold properties to the subject property.
Anticipation
Buying a property based on expectations of future appreciation or income.
Releases the borrow from personal liability
By including an exculpatory clause in a mortgage contract, the lender 1. Waives her right to escalate the interest rage 2. Releases the borrower from personal liability 3. Agrees to permit an assumption to a qualified buyer 4. Grants the borrower immunity from foreclosure
Servicing a loan
Collecting monthly loan payments, disbursing funds to pay taxes and insurance, and otherwise supervising and managing the loan.
Market value
Current value or worth of property.
Qualifying a buyer
Determining a potential borrow's ability to repay a loan.
Primary mortgage market
Direct lenders, prime lenders, and loan originators.
Subordination clause
Found in junior mortgage documents, indicating that the junior lien will always remain junior to a first mortgage.
No indoor plumbing
Functional obsolescence might include a. a worn carpet b. no indoor plumbing c. noise from a nearby airport d. none of the above
Cash, Down payment, Repayment, Annual percentage rate, and payment.
If an advertisement triggers Z, the advertisement must contain the following disclosure: _________ price of the loan; amount or percentage of the __________; number, amount, and frequency of __________; _____________; and total __________.
Kickbacks
Illegal rebates prohibited between lenders and others in real estate transactions.
Lender
In a typical loan transaction, the mortgagee is the 1. Lender 2. Borrower 3.Appraiser 4. Closing agent
Reserve fund or account
Money collected by borrower to pay taxes and insurance.
Second mortgage loan
Not covered by RESPA regulations.
Trustor/beneficiary/trustee
Parties to a deed of trust are 1. Mortgagor/mortgagee/broker 2. Borrower/lender/broker 3. Trustor/beneficiary/trustee 4. Mortgagor/trustee/mortgagee
Hypothecaton
Pledge of property as security without giving up possession.
Settlement agent
Prepares the forms and conducts the closing.
Amortized loan
Principal and interest paid over a period of time.
Capital gain
Profits from the sale of assets.
Acceleration clause
Provides that loan is due in full upon default of certain covenants in loan documents.
Notice of default
Published notice that trustee is going to sell property when payment is in arrears.
Special use property
The cost approach method of appraisal is most appropriate for a. older homes b. single-family detached houses c. multi - family structures d. special use property
Capital outlay
The costs required to "improve" real estate; also known as production costs.
Four, Construction, $25,000, Four and Compare
The following are exempt from Regulation Z, regardless of any triggers; dwellings of more than ________ family units; __________ loans to a builder; personal loans of no more than ___________ and loans of fewer than _________ installments. The intent of Regulations Z is to allow consumers to ___________ mortgage.
Intermediation
The process by which individuals put their money in accounts in financial institutions.
Appropriation
The process of taxation authorized by the local taxing district. When a city determines its spending levels to determine the necessary level of property taxes needed that process is known as: a. assessment b. apportionment c. appropriating d. disintermediation
The present worth of future benefits
Value is best described as a. the price paid by the owner for the property b. the present worth of future benefits c. the assessed valuation d. whatever the market will bear
Could be any or all of the above
What is real estate appraisal? a. A description of a property and the appraiser's opinion of value. b. A process by which an appraiser reaches certain conclusions about value, then documents these conclusions in a written report. c. An estimate or opinion of value of a particular property at a particular time. d. Could be any or all of the above.
Capitalization approach
When an appraiser assigns value to the rights to future income, he or she is most likely using the a. market data approach b. cost approach c. capitalization approach d. future forecast approach
Acquisition cost
When appraising property located on a corner lot, the appraiser would consider all of the following, EXCEPT a. comparable sales b. highest and best use c. acquisition cost d. zoning and deed restrictions
Vacancy rates and bad debts
When determining effective gross income, an appraiser subtracts which of the following from potential gross income? a. vacancy rates and bad debts b. management costs c. maintenance, utilities and taxes d. all of the above
All of the above
When using the Market data approach, an appraiser would make adjustments for a. location b. market conditions c. financing d. all of the above
Economic life is shorter than physical life.
Which generally true? a. Economic life is shorter than physical life. b. economic life is longer than physical life. c. economic and physical life are the same. d. depreciation is applied to the combined value of the land and the improvements.
Tax lien
Which is the superior lien in the event of a foreclosure? a. tax lien b. first mortgage c. junior mortgage d. home equity loan
Payment of taxes
Which of the following covenants is not contained in a security instrument? 1. Seisin 2. Quiet enjoyment 3. Payment of taxes. 4. Further assurances
Noxious odors from a nearby chemical plan
Which of the following is incurable depreciation? a. a kitchen with outdated appliances b. a poorly designed floor plan c. noxious odors from a nearby chemical plan. d. a leaking roof
FHA
Which of the following is not a major participant in the secondary mortgage market? a. GNMA b. FNMA c. FHLMC d. FHA
Assessed value times tax rate
Which of the following is used to determine annual real estate taxes? a. sales price times tax rate b. assessed value times tax rate c. assessed value minus tax rate d. appraised value times tax rate
HUD establishes market-based interest rates for VA and FHA loans
Which of the following statements is NOT correct? a. Prepayment penalties are prohibited with VA and FHA financing b. HUD establishes market-based interest rates for VA and FHA loans. c. VA can make certain direct loans d. Conventional loans may require PMI insurance
Income
Which of the following will be given the greatest emphasis by a lender when qualifying an applicant for a VA loan? a. Income b. Marital status c. Length of military service. d. All are important and would be given equal consideration.
Statutory redemption laws
laws giving foreclosed borrower right to pay judgment in full and regain title.
Cost of repairing central air conditioning
When computing property basis, which of the following is NOT added to the acquisition cost? a. cost of adding more room b. cost of adding central air conditioning c. closing costs of purchase d. cost of repairing central air conditioning
Federal Reserve System
A central banking system with 12 districts.
Borrower repays the entire debt
A defeasance clause in a mortgage will take effect when the. 1. Borrower defaults 2. Lender defaults 3. Lender forecloses 4. Borrower repays the entire debt
Blanket
A developer owns two vacant lots. The developer pledges both as security for a loan to construct houses on the lots, which type of loan is the developer likely to get? 1. Blanket 2. Wraparound 3. Package 4. Open mortgage
Alienation clause
A due-on-sale clause
Economic obsolescence
Changes outside the property that cause depreciation.
Good faith estimate
Estimate of settlement costs that lenders must provide borrowers under RESPA.
Reproduction
Exact duplication
RESPA
Federal law regulating closings of residential, new, first mortgage loans.
Adjusted basis
For tax purposes, the initial cost of an investment property plus the cost of any improvements and minus any depreciation deductions to the property represents the investment's: a. adjusted basis b. capital gains c. equity d. salvage value
VA financing
Government guaranteed loans
FHA financing
Government insured loans
Deficiency judgement
The money the defaulting mortgage still owes the lender after a foreclosure sale
To ensure a flow of mortgage money to primary lenders
The primary purpose of the secondary mortgage market is a. To aid in the resale of property b. To provide investment vehicles for lenders c. To ensure a flow of mortgage money to primary lenders d. To assist small mortgage companies
Pay off the existing loan and convey the property
Under which of the following conditions could a veteran who already has a VA loan obtain another VA loan? a. Pay off the existing loan and convey the property. b. if the property has a pending contract for sale. c. The veteran can obtain a new VA loan if the first loan is more than five years old. d. if the veteran buys a condominium to be used as rental property.
Partial release clause
Used by developers to provide for release of lots upon payment of some principal.
Market data approach
Using comparable sales to set the price of property.
Loan discount points
What lenders may charge buyers to borrow money.
Escrow closing
When a disinterested third party acts as closing agent according to instructions provided by both buyer and seller. The type of real estate closing which is overseen by a neutral third party without a special meeting of all the principals and attorneys is called a: a. table closing b. escrow closing c. impound closing d. conference closing
Assumption of the mortgage
When a new buyer agrees to pay the existing mortgage.
"Subject to" the mortgage
When a new buyer is not personally liable for repaymet of the mortgage.
Liquid assess
Assets that can be readily converted to cash.
VA
Buyers of loans in the secondary mortgage market include all of the following EXCEPT: a. FHLMC b. FNMA c. Private investors d. VA
HUD 1 form
Settlement statement
Market price
The acquisition cost of property.
Assessment
The act of valuation of property by a local official to determine real estate tax rates.
Promissory note
Written promise to repay money.
Mortgage contract, Lien, Two, and Lender.
_________ is an agreement whereby an owner pledges real property as security for the debt. They are used in _______ theory states. There are _______ parties to the contract and the _______hold no interest in the title.
Defeasance
The clause in a mortgage that terminates the lender's interest in real property when the mortgage is paid in full is known as 1. Defeasance 2. Alienation 3.Acceleration 4. Satisfaction
Alienation
The clause in a security instrument that prevents the assumption of a loan is known as 1. Acceleration 2. Alienation 3. Defeasance 4. Release