Real Estate Finance

Question 92 Fatima is using a VA loan to purchase a home from Sue. Sue agrees to pay Fatima's closing costs. Which of the following statements is true?

Closing costs aren't considered a seller concession.

Question 38 The ______ was a response to the practice of redlining and was enacted in 1977.

Community Reinvestment Act $$ The Community Reinvestment Act prohibits lenders from refusing credit because of a home's location in a particular neighborhood.

Question 13 Which of the following contributed to the 2007 financial crisis?

Falling home prices

Question 63 Which institution was created as the Federal National Mortgage Association in 1938?

Fannie Mae

Question 4 Which type of real estate investment trust derives its income from the rent or sale of property and interest dividends?

Hybrid REIT

Question 48 Veterans using the ______ program aren't required to submit a COE, get a new appraisal, or verify income.

Interest Rate Reduction Refinance

Question 53 Which type of real estate investment trust involves both residential and commercial properties?

Mortgage REIT $$ Mortgage REITs finance both residential and commercial properties.

Question 19 The ______ clause in a deed of trust allows the lender to foreclose non-judicially.

Power of sale $$ The power-of-sale clause can be understood as the borrower granting to the lender a right to sell the property in case of default, making this a non-judicial foreclosure.

Question 28 In addition to lending money to member banks, FHLBanks also do which of the following?

Set rules and regulations that member banks must follow $$ FHLBanks set rules and regulations that member banks must follow, which includes reserve requirements.

Question 82 What's true about the draw period on a home equity line of credit?

The draw period varies.

Question 65 Greg is selling his home to a veteran who's using a VA loan. When the transaction starts to stall, Greg tries to motivate the buyer by including his giant flat screen TV, valued at $1,200, as a gift. Is Greg allowed to do this?

Yes, this is considered an allowable seller concession .

Question 84 The Federal Housing Administration's qualifying standards for a mortgage loan ______, but the mortgage insurance the FHA provides balances the risk for the lender.

Are somewhat less stringent than standards for conventional loans $$ FHA qualification standards are less stringent than standards for conventional loans, but a down payment is required.

Question 83 A vendor and vendee are the parties involved when the finance instrument is a ______.

Contract for deed

Question 9 The three types of finance instruments that can be used when financing a real estate purchase are the note with mortgage, note with deed of trust, and ____

Contract for deed

Question 12 What's the acronym for the legislation that prohibits lenders from denying credit to applicants on the basis of their protected class status?

ECOA

Question 62 The ______ clause protects the borrower's assets that aren't part of the voluntary lien from a deficiency judgment in case of foreclosure.

Exculpatory $$ If a lender uses a judicial foreclosure, it may also ask for a deficiency judgment, unless the exculpatory clause is present in the security instrument.

Question 86 When George is working with buyers who can't afford a large down payment, he recommends that they look into ______.

FHA financing

Question 29 ______ is regulated by the Federal Housing Finance Agency.

Freddie Mac $$ Freddie Mac is regulated by the Federal Housing Finance Agency.

Question 10 Which of the following is part of the Other Disclosures section

Liability After Foreclosure

Question 71 Private loan companies may place a ______ on the property for which the loan is being taken

Lien

Question 73 The lender, the depository institution, and the _______ all complete parts of the request for verification of deposit form.

Loan applicant

Question 34 Store of value, unit of account, and what other factor define money?

Medium of exchange$$ Money can be defined as a store of value, unit of account, and medium of exchange.

Question 11 Natalie is a licensee who assists buyers in the purchase of HUD ______ when they're listed for sale

Repossessed homes

Question 33 Krista is obtaining a loan to buy a home. Her loan agreement consists of one document called a note and one called a deed of trust. What's the role of the note?

States who owes money to whom, how much, and how it will be repaid

Question 81 What's the acronym for the legislation that requires lenders to make full disclosure of the terms and conditions of credit?

TILA $$ TILA stands for the Truth in Lending Act.

Question 30 The Mortgage Disclosure Improvement Act amends ______ in terms of the timing of lender disclosures.

TILA $$ The Mortgage Disclosure Improvement Act amends Truth In Lending Act timing requirements

Question 27 What is TRID?

TILA-RESPA Integrated Disclosures $$ TILA and RESPA initially required similar but separate disclosures to be given to consumers. These have been combined and simplified and are referred to as TRID.

Question 20 Which term describes the legal regulation of a property to the detriment of the owner, and must include reimbursement for the property owner?

Taking $$ Taking is when an action by the government, such as down zoning, harms property value, resulting in some form of compensation to the property owner.

Question 44 The FHA is part of ___

The Department of Housing and Urban Development

Question 16 Beverly has applied for a loan to purchase a Craftsman-style home for herself and her teenage son. Her mortgage broker helps her find an FHA loan program that accommodates her low down payment. Which program will serve Beverly's needs?

Title II, Section 203(b) $$ The Title II, Section 203(b) loan program is for the purchase of one- to four-unit residences.

Question 42 Why might a homebuyer use an FHA 203(k) loan instead of the standard 203(b) loan?

To roll the cost of rehabilitating the purchased home into the mortgage $$ The 203(k) loan is the same as the 203(b) loan, except that it includes funds to be used for rehabilitating the purchased home.

Question 31 The _______ requires lenders to disclose financing terms to consumers in a manner that's not misleading or deceitful.

Truth in Lending Act $$ The Truth in Lending Act (TILA) was enacted in 1968 and requires lenders to disclose financing terms to consumers in a manner that's not misleading or deceitful.

Question 94 When a promissory note is sold, how is ownership transferred?

Endorsement of the note