Practice Exam #2
Caroline has been paying her mortgage steadily for fifteen years. She has just received a notice from her lender that the loan due date is approaching and she will owe a lump sum of $11,257 to pay off her mortgage loan. Which type of promissory note has Caroline NOT been paying?
A fully amortized loan - A fully amortized loan will not have a balloon payment due at a certain point in the loan term.
An undeveloped acre of land sits in the middle of a secluded rural community. How many separate owners could this acre have?
Three owners: One could own the subsurface rights, one the surface rights, and another the air rights. Land comes with various rights, including subsurface rights, surface rights, and air rights, with each right potentially having separate owners.
Ensuring consumers are fully informed of all finance changes and aware of the true annual interest rate are requirements of which regulation?
Truth in Lending -To protect consumers, the Truth in Lending Act requires that all charges and interest rates associated with loans be disclosed to the borrower.
Which of the following is not a fourfold unity?
Vesting The fourfold unities include time, title, interest, and possession.
Appraiser Jones appraises one-to-four unit residential properties, and non-residential properties with a transaction value up to $250,000. What is this appraiser's level? How many hours of appraiser education were completed?
Certified Residential Real Estate Appraiser, 200 hours Certified Residential Licenses are issued to appraisers for one-to-four unit residential properties and non-residential properties with a transaction value up to $250,000. The applicant for this license must complete 200 hours of appraiser education.
Which act is known as the original fair housing statute?
Civil Rights Act of 1866 - The Civil Rights Act of 1866 prohibited discrimination in housing based on race.
Which is not a form of syndication?
An Equity Trust. The ones that are a form of syndication are: The Corporate Form, The General Partnership and the Limited Liability.
Mr. Manning has owned a restaurant for forty years. He is in the process of selling his business to a group of investors who plan on revamping the restaurant and turning it into a destination. In the negotiation of the sale, Mr. Manning has stipulated he is willing to accept their offer on two conditions: There may never be any alcohol served on the property and there can never be dancing of any kind. Mr. Manning is insistent on these conditions due to his religious beliefs. If either of these activities ever takes place, Mr. Manning would have the right to take back the property. Which type of estate applies?
Fee Simple Defeasible- A Fee Simple Defeasible estate is a conveyance of property that has conditions placed on it.
When is a real estate licensee considered a creditor?
If the licensee routinely assists sellers in determining whether a proposed buyer in a land contract or purchase-money mortgage is creditworthy. When an owner is selling under a land contract or purchase-money mortgage, he may use his broker to help determine if the buyer is creditworthy. If the broker routinely performs this task, the broker can be considered a creditor.
Which of the following is not an exemption to the federal fair housing laws concerning age and family status?
In a retirement community if 70% of the dwellings have one person who is 55 years of age or older, provided there are amenities for elderly residents. To be exempt from fair housing age and family status discrimination, a retirement community must have 80% of the dwellings with one person who is 55 years old or older with amenities for elderly residents.
Elliot has misrepresented himself by acting in the capacity of a real estate salesperson without being licensed by the State of California. Elliot had his license revoked three years ago for unethical actions. Elliot is guilty of what level of violation?
Misdemeanor- If an unlicensed person acts as a real estate salesperson, he or she will be guilty of a misdemeanor and will be penalized under the law.
Georgina sat for the examination about two weeks ago. She believes she passed with flying colors and checks her mail immediately upon arrival home for her results. Today, they arrived and, as she opened the envelope, she saw her test score. Did Georgina pass or fail?
Georgina failed the exam. The exam is qualifying by nature and if you pass, you pass; your score is irrelevant and is not revealed. When an applicant passes the exam, the actual score is not sent to the applicant. However, if the applicant fails the test, the score is sent.
The Statute of Limitations is:
Prevents action from being taken against an individual after a prescribed period of time Statute of limitations are legislative acts restricting the time within which legal proceedings may be brought, usually to a fixed period after the occurrence of the events that gave rise to the cause of action.
When an owner dies without a will or heirs, what happens to the property and why?
The property is transferred to the state. Property cannot be without an owner. Escheat means that property cannot be without an owner. Therefore, when an owner dies without a will and without heirs, then the property reverts to the state.
The Brights are buying a home from the Stones. They are splitting the escrow service fees 50-50. Do they live in Northern or Southern California? How does the other region usually handle the escrow service fees?
They live in Southern California. In Northern California the buyer usually pays the escrow service fees. In Southern California, the escrow service fees are usually split 50-50 between the buyer and seller, while in Northern California, the fees are usually paid by the buyer.
Which of the following is not a prohibited escrow-related activity?
They may not permit, under any condition, any person to make any addition, deletion, or alteration of an escrow instruction. Once escrow instructions are signed by all parties, there may not be any changes made to the instructions unless both parties agree.
Tracy and Darnell are buying a home. They have a 15% down payment and have qualified for a thirty year fixed conventional rate mortgage. Will Tracy and Darnell have to pay PMI?
Yes, private mortgage insurance is required for all loans with less than 20% down payment. Any conventional loan with less than a 20% down payment must be supported by private mortgage insurance.
When can a violation that hasn't happened yet be a violation?
Both A and C A violation of the licensing laws or other related requirement might not necessarily have to have been already committed for the Commissioner to take action against a party. IF the Commissioner believes (from evidence he considers satisfactory) that a person has violated or is about to violate any of the provisions of the California license law or any order, license, permit, decision, demand, or requirement, then the Commissioner has the authority to bring an action against that person.
Christina is planning on getting married in the next year. She is a very successful business owner and is planning on buying some vacation property on the coast. She asks her agent, Martina, for advice on how she should take title to this new property. Should she hold the title alone, or jointly with her fiance? How should Martina advise?
Martina should discuss with Christina what she knows in reference to how title can be vested but give no advice except to consult an attorney for advice. Which of the following is not a prohibited escrow-related activity?Because the agent is not an attorney, she is prohibited from giving legal advice. She can provide the client with information about laws, but not legal advice about making decisions.
Dan has recently been transferred to San Diego, and only has a month to find a home, sell his condo, pack, move, close, and get to work. His agent shows him the Walsh home and it's perfect. He offers the asking price, along with all the kitchen appliances and window treatments to remain with the property. The Walsh's accept his offer exactly as it is written. Which contract term applies to this situation?
Mirror Image- In a Mirror Image, the seller agrees to an offer exactly as it was made with no changes
Broker Burns is negotiating a first trust deed loan for buyers. The buyers have signed a contract for a fifteen-year loan. What is the maximum commission for Broker Burns?
Ten percent of the principal of the loan. With a loan secured by a first trust deed for a period of 3 years or more, the maximum commission a broker can receive is 10% of the principal of the principal amount.
Ben and Amanda are interested in a vacant, undeveloped lot. They are going to continue to live in their current home, pay off the lot's loan, and then build a new home on the lot. Before closing on the purchase of the lot, they discover the zoning regulations permit nightclubs to be built in the immediate area. They specifically asked the broker about this issue and were told there was no reason to worry. What are Ben and Amanda's options, if any?
They may rescind the transaction based on the misrepresentation of the broker. Brokers are required to disclose certain information that impacts a property and certainly may not lie or misrepresent facts the prospective buyer may ask. Doing so allows the buyer to rescind the contract.
