National Finance Non-Math
If advertised alone, which would be in violation of TRUTH IN LENDING?
"No down payment required" (cannot say this without terms)
A standardized yardstick expressing the true annual cost of borrowing is expressed as a/an
APR.
Which of the following describes a mortgage that requires principal and interest payments at regular intervals and calls for the liquidation of the debt by periodic installments until the debt is satisfied?
Amortized Loan.
Which of the following is considered a conventional loan?
Commercial bank ARM loan
Discrimination is prohibited in lending practices under _____________
ECOA.
Who is NOT an originator of primary loans?
FHA
______ is the cost per thousand that is required to create the principal and interest payment necessary to pay off a loan.
Factor.
Who is the largest purchaser in the secondary market?
Fannie Mae.
A home improvement company was negotiating with a home owner to add two rooms onto a home. The company agreed to take a second mortgage as long as the homeowner also included the rest of the property in the loan. The company and the homeowner agreed to a price and the company provided the necessary disclosure form on Monday and the homeowner signed the agreement at noon the following day. Assuming that the week had five business days, until what time could the homeowner rescind the loan?
Friday by midnight. (remember always 3 days after agreement)
If a single parent is applying for a real estate loan, when would the fact have to be revealed that part of the parent's income is from child support?
If the parent was relying on the income for repayment of the loan
An increase in the availability of money would lead to which effect?
Interest rates would go down.
Which of the following is true of a second mortgage?
It usually has a higher interest rate.
RESPA would prohibit which of the following acts?
Kickbacks.
In an installment land contract, what type of title did the seller retain?
Legal. (not released until final payment made)
The discount points charged by a lender on a federal VA or FHA loan are a percentage of the ________________
Loan amount.
Under an FHA graduated payment mortgage, which of the following fluctuates over the term of the loan?
Monthly payments
An owner advertised "beautiful acreage only $5,000 down, owner will personally finance down payment." Would this be in violation of the Truth in Lending Act?
No, owners are not covered by Reg Z.
A buyer assumes the mortgage. How is the owner relieved of the liability?
Novation
The Smiths' purchased a residence for $75,000. They made a down payment of $15,000 and agreed to assume the seller's existing mortgage, which had a current balance of $23,000. The Smiths' financed the remaining $37,000 of the purchase price by executing a second mortgage whereby the seller became a mortgagee. This type of loan is called a
Purchase money mortgage
The finance charges recorded on the Truth in Lending statements would include all of the following EXCEPT:
Recording fees and title insurance premiums
Which transaction requires a securities' license?
Selling shares of Fannie Mae.
In a repayment of a mortgage loan, which type of interest is used?
Simple.
In most states, by paying the debt after a foreclosure sale, the mortgagor has the right to regain the property. What is this right called?
Statutory right of redemption (equitable is before sale)
Effective October 1, 2015, the real estate industry has new requirements as specified in the
TILA/RESPA Integrated Disclosure (TRID) Rule.
An impound or reserve account MOST benefits whom?
The lender. (to ensure payment)
Which of the following would usually occur in a sale-and-leaseback transaction?
The property is sold on the condition that the new owner lease it back to the seller at the time title passes.
All of the following are true of conventional loans except what?
The requirements to qualify are uniformly fixed by state law.
When the lender under a deed of trust required title insurance, who would be the most likely person to pay for it?
The trustor
Why would a mortgagee (beneficiary) have an appraisal on the property?
To assure the property value is sufficient to cover the loan
A borrower bought a $74,000 house with no down payment. The loan was probably ______________
VA Loan.
A mortgage company makes a number of loans to be assembled into one package and sold to permanent investors. This process is an example of interim financing to the mortgage company and is called:
Warehousing.
An owner was selling his own home. Can he advertise the down payment?
Yes because it's his home.
A buyer wanted to use a promissory note for consideration on the purchase of a property. Can he do this?
Yes, this is acceptable as long as the seller agrees.
When the amortized payment of a mortgage remains constant over the period of the loan but leaves an outstanding balance to be paid at the end, this payment is called:
a balloon payment.
The clause in a trust deed or mortgage which permits the mortgagee to declare the entire unpaid sum due upon a default by a mortgagor is called a(n) ______________
acceleration clause.
A buyer wants to take out an FHA loan. The broker should refer the buyer directly to ______________
any approved lending institution such as a bank or savings and loan association.
A mortgage broker _____________
arranges loans between borrowers and investors.
The maximum permissible "loan to value ratios" are _____________
based on sale price or appraised value, whichever is lower.
Under Regulation Z, consummation is defined as the time when a consumer
becomes contractually obligated on a credit transaction. (creation of loan)
The lender is not insured or guaranteed against a loss, by reason of the borrower's default in repayment, under which type of loan?
conventional loan.
The primary purpose of Truth in Lending is to _____________
disclose the true cost of obtaining credit.
Usury MOST nearly means ______________
illegal interest.
In which of the following markets may a lender sell a loan that a mortgage banker has previously originated?
secondary market.
The seller under a land contract is called _____________
the vendor.
A VA loan may be granted for the purchase of a one-family to four-family if _________________
the veteran agrees to live there.
The Loan Estimate must be delivered to an applicant
within 3 business days of app.