REE Exam 2 Quizzes
Jonathan recently sold his home and was able to take home $423,000 after paying the real estate broker's commission of 6%. If the buyer was ultimately found through a buyer broker, the dollar commission will need to be split between the listing broker and buyer broker. If the buyer broker is entitled to 40% of the commission, what is her share of the commission rounded to the nearest dollar? a. $10,800 b. $13,500 c. $16,200 d. $27,000
$10,800
If a property transaction is scheduled to close on May 14th, calculate the individual tax responsibility for the buyer if the total tax owed at the end of the year is $5,000. For this problem, assume that we are dealing with a 365 day calendar year. a. $0.00 b. $5,000.00 c. $3,178.08 d. $1,821.92
$3,178.08
Certain closing costs will be prorated to account for the period of time during which the seller occupied the house. If a transaction is scheduled to close on May 17, 136 days into a 365-day year, calculate the amount that the buyer will be credited if the particular closing cost in question is estimated to be $1000 for the entire year. a. $624.66 b. $372.60 c. $182.19 d. $1000
$372.60
Loan servicing includes a number of responsibilities such as collecting monthly mortgage payments from the borrower, remitting principal and interest payments to investors, ensuring sufficient escrow payments are being made by the borrower, and managing default if it should arise. In exchange for these services, mortgage bankers receive a fee. If the outstanding loan balance is $250,000 and the annual servicing fee is 0.35%, what is the monthly fee for servicing the loan? a. $875.00 b. $72.92 c. $8,750.00 d. $729.17
$72.92
Mortgage originators often offer many types and forms of available residential loans as part of their mortgage menu. However, the predominant form of prime conventional mortgage remains the: a. adjustable rate mortgage (ARM) b. alt-A mortgage c. (fixed-rate) level payment mortgage (LPM) d. subprime mortgage
(fixed rate) level payment Mortgage (LPM)
FHA mortgage insurance covers any lender loss after conveyance of title of the property to the U.S. Department of Housing and Urban Development (HUD). FHA mortgage insurance requires two premiums to be paid: the UFMIP (up-mortgage insurance premium) and the MIP (monthly insurance premium). Currently, the UFMIP is what percentage of the loan for normal loans used to purchase a personal residence? a. 4.0% b. 2.0% c. 1.5% d. 1.75%
1.75%
If property owners fail to pay their taxes in a timely fashion, this can create a first lien on the mortgaged property. In order to protect against this, lenders often require that borrowers add what fraction of their estimated tax bill to their required monthly mortgage payments? a. 1/2 b. 1/12 c. 1/6 d. 1/4
1/12
The maximum loan-to-value ratio on a VA guaranteed loan is: a. 99 percent b. 98 percent c. 100 percent d. 90 percent
100 %
Added to the index of the adjustable rate is a margin, which is the lender's "markup." For standard Adjustable Rate Mortgage (ARM) loans, the average industry margin has been stable at approximately: a. 275 basis points b. 375 basis points c. 175 basis points d. 75 basis points
275 basis points
For conforming conventional home loans the standard payment ratios for underwriting are: a. 28 percent and 36 percent b. 25 percent and 33 percent c. 29 percent and 41 percent d. 33 percent and 56 percent
28% and 36%
Utilizing the following information, calculate the housing expense ratio. Monthly Principal and interest on mortgage loan: $635; Monthly Tax and insurance payments into escrow: $125; Gross monthly income: $2,500 a. 25.4% b. 44.4% c. 30.4% d. 53.2%
30.4%
In ascertaining whether a borrower has the ability to pay off his loan over time, a mortgage bank may rely on calculating a total debt ratio as part of its underwriting process. Utilizing the following information, calculate the total debt ratio. Monthly principal and interest on mortgage loan: $635, Monthly Tax and insurance payments into escrow: $125, Monthly Car lease payment (lease term is 3 years): $350, Gross monthly income: $2,500 a. 53.2% b. 25.4% c. 30.4% d. 44.4%
44.4%
In analyzing a borrower's credit worthiness, the lender will typically examine the borrower's FICO score (a product developed by the Fair Isaac Corporation). High quality (prime) borrowers are those with a credit score above: a. 850 b. 620 c. 350 d. 660
660
A conventional mortgage loan is one that is not insured or guaranteed by an agency of the U.S. government. The lender, however, can still pursue a private mortgage insurance (PMI) policy to provide a guarantee for the fulfillment of the borrower's obligations. Typically PMI is required for all loans that have a loan to value (LTV) ratio greater than: a. 60% b. 40% c. 20% d. 80%
80%
When a mortgage is used as collateral for the issuance of a mortgage-backed security (MBS), the underlying mortgage is said to be "securitized." As of the end of 2010, approximately what percentage of residential mortgage loans in the U.S. was being sold into the secondary market and being used as collateral for the issuance of MBS? a. 85% b. 25% c. 40% d. 100%
85%
The maximum loan-to-value ratio for an FHA loan over $50,000 is approximately: a. 100 percent b. 90 percent c. 97 percent d. 99 percent
97%
A partially amortizing loan always will have a. Only one stated term b. Caps c. A balloon payment d. A prepayment penalty
A balloon payment
A jumbo loan is: a. A conventional loan that is large enough to be purchased by Fannie Mae or Freddie Mac. b. A multiproperty loan c. A conventional loan that is too large to be purchased by Fannie Mae or Freddie Mac d. A VA loan that exceeds the normal limits.
A conventional loan that is too large to be purchased by Fannie Mae or Freddie Mac
In most straightforward transactions involving houses or other relatively small properties, the contract is: a. A form, with blanks filled in by the broker. b. prepared by the broker c. Prepared by the buyer's attorney d. Prepared by the seller's attorney
A form with blanks filled in by the broker
An earnest money deposit is: a. A preliminary contract b. An escrow provision c. A payment of money by a buyer to evidence good faith d. A provision in a contract for sale
A payment of money by a buyer to evidence good faith
Ways that a lender may respond to a defaulted loan without resorting to foreclosure include all of the following except: a. Defer or forgive some of the past-due debt b. Accelerate the debt c. Offer credit counseling d. Allow short sale to a third party
Accelerate the debt
The dominant loan type originated and kept by most depository institutions is the: a. FHA-insured mortgage b. Adjustable rate mortgage c. Fixed-payment, fully amortized mortgage d. Purchase-money mortgage
Adjustable rate mortgage
The purpose of a closing statement is to: a. Determine who pays the brokerage commission b. Allocate expenses and receipts of buyer and seller c. Prorate expenses between buyer and seller d. All but "a" above
All but "a" above
Real estate transactions do not close when the contract for sale is signed by both parties because: a. An inspection must be made b. Financing must be arranged c. Documents must be prepared d. All of the above
All of the above
Which of these statements is true about mortgage loans for income producing real estate? a. They usually are partially amortizing loans b. They often have a prepayment penalty c. They often are nonrecourse loans d. All of the above
All of the above
Potential justifiable subprime borrowers include persons who: a. Are creditworthy but want a 100 percent or higher LTV loan b. Are credit-impaired c. Persons with no documentation of their income d. All of these
All of these
In a mortgage loan, the borrower always creates two documents: a note and a mortgage. Which of the following pieces of information is provided in the mortgage? a. How the interest rate is to be computed. b. An unambiguous description of the property that is being pledged as collateral for the loan. c. Whether the borrower is released from liability for fulfillment of the contract. d. Whether the borrower has the right to prepay the principal during the term of the loan, and any prepayment penalties that would be incurred as a result.
An unambiguous description of the property that is being pledged as collateral for the loan
Conforming conventional loans are loans that:Conforming conventional loans are loans that: a. Meet federal Truth-in-Lending standards b. Are eligible for VA guarantee c. Are eligible for FHA insurance d. Are eligible for purchase by Fannie Mae and Freddie Mac
Are eligible for purchase by Fannie Mae and Freddie Mac
Since the seller often has utilized the property for a portion of the year in which the transaction is being made, certain costs associated with the property will be prorated at the closing. All of the following items are subject to being prorated EXCEPT: a. Prepaid rent b. Mortgage interest c. Property tax d. Broker commission
Broker commission
How are commission rates charged by real estate brokers determined? a. By rule of the local Boad of Realtors b. By agreement between broker and principal c. By state eal estate commissions d. By agreement among local realtors
By agreement between broker and principal
Traditional home mortgage underwriting is said to rest on three elements, the "three C's." The housing expense ratio is one tool that lenders will use to address concerns associated with which of the "three C's?" a. Creditworthiness b. Capacity c. Collateral d. Capability
Capacity
Mortgage banking companies: a. Collect monthly payments and forward them to the mortgage investor b. Arrange home loan originations, but do not make the actual loans c. Make home loans and fund them permanently d. None of the above
Collect monthly payments and forward them to the mortgage investor
Currently, which type of financial institution in the primary mortgage market provides the most funds for the residential (owner-occupied) housing market? a. Life insurance companies b. Thrifts c. Credit unions d. Commercial banks
Commercial banks
Real estate salespersons can lose their licenses for: a. Not showing buyers all available properties in an area b. Using aggressive sales techniques c. Not using modern sales methods d. Commingling escrow (trust) money with personal funds
Commingling escrow (trust) money with personal funds
Real estate brokers serve as intermediaries by bringing buyers and sellers together in the real estate market. For this service, brokers are paid what is commonly referred to as a: a. licensing fee b. commission c. listing fee d. recovery fee
Commission
Created by Congress to promote an active secondary market for home mortgages, Fannie Mae and Freddie Mac purchase loans that meet specific underwriting standards such as loan size, documentation, and payment to income ratio. The loans that Fannie Mae and Freddie Mac are eligible to purchase are commonly referred to as: a. nonconforming conventional loans b. government sponsored loans c. FHA loans d. Conforming conventional loans
Conforming conventional loans
Certain mortgage loans contain a due-on-sale clause, which gives the lender the right to terminate the loan at sale of the property. Which of the following types of loans is the most likely to contain a due-on-sale clause? a. Veterans Affairs (VA) loan b. Conventional home loan c. Federal Housing Administration (FHA) loan d. An assumable home loan
Conventional home loan
Considered the most common type of home loan, which of the following refers to any standard home loan that is not insured or guaranteed by an agency of the U.S. government? a. Veterans Affairs loan b. Section 203 loan c. Conventional home loan d. Federal Housing Administration loan
Conventional home loan
When a borrower defaults on the payment requirements of a loan, there are several options that the lender has at its disposal. When the lender allows the borrower simply to convey the property to the lender rather than pursuing a court supervised process of terminating all of the borrower's claims of ownership of the property, this is commonly referred to as: a. Bankruptcy b. Foreclosure c. Equity right of redemption d. Deed in lieu of foreclosure
Deed in lieu of foreclosure
For most mortgage loans on commercial real estate, the right of prepayment is constrained through a prepayment penalty. Which of the following types of prepayment penalties requires a borrower to provide the lender with some combination of U.S. Treasury securities that will serve to replace the cash flows of the loan being paid off? a. Curtailment penalty b. Prepayment lockout c. Defeasance prepayment penalty d. Yield-maintenance prepayment penalties
Defeasance prepayment penalty
A lender may reserve the right to require prepayment of a loan at any time they see fit through a(n): a. Acceleration clause b. Demand clause c. Taking clause d. Due-on-sale clause
Demand clause
The characteristics of a borrower than can be considered by a lender in a mortgage loan appreciation are limited by the: a. Truth-in-Lending Act b. Community Reinvestment Act c. Equal Credit Opportunity Act d. Real Estate Settlement Procedures Act
Equal Credit Opportunity Act
One of the traditional requirements for individuals who wish to obtain a brokerage license has been to demonstrate financial capacity to cover damage judgments brought against them by clients. In order to address this concern, some states have required licensees to first obtain: a. Hazard insurance b. Errors and omission insurance c. Deposit insurance d. Private mortgage insurance (PMI)
Errors and omission insurance
When contracts for the sale of real property are placed with a disinterested third party for executing and closing, they are said to be placed in: a. Escrow b. Option c. A title company or financial institution d. Safekeeping
Escrow
Which if these points in a mortgage loan would be addressed in the mortgage (possibly in the note as well)? a. Loan amount b. Inerest rate c. Late fees d. Escrows
Escrows
Probably the greatest contribution of FHA to home mortgage lending was to: a. Establish the use of the level-payment home mortgage b. Create mortgage insurance for conventional loans c. Create the adjustable rate mortgage d. Create the home equity loan
Establish the use of the level-payment home mortgage
The state real estate commission is responsible for: a. Setting up multiple listing systems b. Marketing data on real estate transactions c. Seting fees for brokerage services d. Establishing education requirements for licensees
Establishing education requirements for licenses
In recent years, many U.S. investors have expanded their purchases of real estate into foreign countries, and many foreign investors have held interests in U.S. real estate. This is an example of what is commonly referred to as ________________ of real estate markets. a. disintermediation b. globalization c. deregulation d. industrialization
Globalization
The Real Estate Settlement Procedures Act (RESPA) is a federal law that requires federally chartered or insured lenders to provide buyers and sellers with expectations of their closing costs prior to the closing date. When a borrower (the buyer) applies for a loan, the lender will provide him/her with which of the following forms that includes details pertaining to specific loan information and an estimate of expenses that the borrower is likely to incur at the closing? a. Certificate of occupancy b. Good-faith estimate c. Settlement Costs and You booklet d. Uniform Settlement Statement (HUD-1) form
Good faith estimate
Which of the following types of institutions has historically been the largest purchaser of residential mortgages? a. Government sponsored enterprises b. Mortgage banking companies c. Commercial banks d. Savings and Loans
Government sponsored enterprises
Home equity loans typically: a. Have tax-deductible interest charges b. Are fixed-rate, fixed-term loans c. Are originated by mortgage bankers d. Are first mortgage loans
Have tax-deductible interest charges
Private mortgage insurance (PMI) is usually required on _____ loans with loan-to-value ratios greater than _____ percent. a. Home, 60 percent b. Home, 80 percent c. Income property, 80 percent d. Income property, 75 percent
Home, 80%
The element of an adjustable interest rate that is the "moving part" is the: a. Index b. Margin c. Teaser d. Adjustment period
Index
Which of the following mortgage types has the most default risk, assuming the initial loan-to-value ratio, contract interest rate, and all other loan terms are identical? a. Interest-only loans b. There is no difference in the default risk of these loans. c. partially amortized loans d. Fully amortizing loans
Interest-only loans
While fee splitting between cooperating real estate brokers is permitted, RESPA explicitly prohibits such actions as rebating part of the title insurance premium to the lender who recommended or required the title insurance. These unearned fees are commonly referred to as: a. damages b. commissions c. kickbacks d. specific performance dues
Kickbacks
The most profitable activity of residential mortgage bankers is typically a. Loan origination b. Loan servicing c. Loan sales in the secondary market d. Loan brokerage activities
Loan servicing
A significant number of mortgage loans use adjustable interest rates, in which the interest rate of the loan is tied to an index rate that fluctuates over time. For income-producing property, the most common index rate is the: a. prime rate b. London Interbank Offered Rate (LIBOR) c. cost-of-funds index d. one-year U.S. Treasury constant maturity rate
London Interbank Offered Rate (LIBOR)
Since conforming loans can be much more readily bought and sold in the secondary mortgage market, they carry a(n) _______ interest rate than comparable nonconforming loans. a. more volatile b. lower c. higher d. equal
Lower
To put into perspective the amount of residential mortgage debt outstanding, it is useful to compare this market to other prominent sources of available debt. Listing the issuer with the largest amount of debt outstanding first, which of the following choices best depicts the relative rank ordering amongst the major sources of outstanding debt in the U.S. as of the end of 2011? a. Marketable U.S. government bonds, residential mortgage debt, corporate bonds, consumer debt b. Consumer debt, residential mortgage debt, marketable U.S. government bonds, corporate bonds c. Corporate bonds, marketable U.S. government bonds, residential mortgage debt, consumer debt d. Residential mortgage debt, marketable U.S. government bonds, corporate bonds, consumer debt
Marketable US government bonds, residential mortgage debt, corporate bonds, consumer debt
The numerator of the standard housing expense (front-end) ratio in home loan underwriting includes: a. Monthly principal and interest b. Monthly principal, interest, and property taxes c. Monthly principal, interest, property taxes, and hazard insurance d. All of these plus monthly obligations extending 10 months or more
Monthly principal, interest, property taxes, and hazard insurance
The emergence of mortgage securities propelled the development of mortgage companies, an entity significantly different from the thrifts and banks that previously dominated the mortgage landscape. Which of the following parties is responsible for providing mortgage origination services and initial funding within this new framework? a. Portfolio lender b. Security analyst c. Mortgage broker d. Mortgage banker
Mortgage banker
Which statement is correct about the right of prepayment of a home mortgage loan? a. home mortgage loans give the right of prepayment without charge only in some states b. Most home mortgage loans have the right of prepayment without charge, but not all, and the borrower should check the loan carefully c. All home mortgage loans have the right of prepayment without charge d. Home mortgage loans never have the right of prepayment without charge unless it is explicitly stated
Most home mortgage loans have the right of prepayment without charge, but not all, and the borrower should check the loan carefully
The best method of determining whether to refinance is to use: a. Net benefit analysis b. An interest rate spread rule c. APR d. Cost of borrowing
Net benefit analysis
One of the most effective ways that salespersons or brokers can distinguish themselves as a preferred agent in a particular specialization of real estate brokerage is to: a. Read related books b. Obaining a related industry designation c. Take related courses d. Obtain a license to practice
Obtaining a related industry designation
In certain circumstances, mutual assent between the contracting parties may be broken, thus invalidating the contract. Which of the following defects to mutual assent involves compelling a person to act by the use of force? a. One of the parties is under undue influence. b. One of the parties is committing fraud. c. One of the parties is under duress. d. One of the parties is under menace.
One of the parties is under duress
Which of the following conditions would be a defect to mutual assent in a contract for the sale of real property? a. One party attempts to perpetrate fraud on the other b. One of the parties is legally incompetent c. The contract is in written form d. The price is excessive
One party attempts to perpetrate fraud on the other
Suppose that a mortgage bank "locked in" an interest rate for a prospective borrower at 8.5%. However, prior to the loan closing, the market mortgage rate falls to 7.5 %. In this scenario, the mortgage banker would be most concerned with which of the following risks? a. Default risk. b. Interest rate risk. c. Pipeline fallout risk. d. Liquidity risk.
Pipeline fallout risk
Which of these aspects of a mortgage loan will be addressed in the note rather than in the mortgage? a. Prepayment penalty b. Escrow requirement c. Acceleration d. Takings
Prepayment penalty
Which of the following is one of the terms of a real estate contract? a. Mechanical equipment must be in good condition b. Title must be marketable c. Property must be free of termites d. Price to be paid
Price to be paid
The normal securitization channel for jumbo conventional loans is: a. FDIC b. GNMA c. GSEs d. Private conduits
Private conduits
Real estate brokers are paid commissions primarily forReal estate brokers are paid commissions primarily for a. Having an inventory of properties b. Providing a service c. Having a specialized education d. Having many contacts
Providing a service
Suppose a buyer agrees to purchase a tract of land for $40,000. The buyer is only able to obtain a mortgage for $32,000. Rather than let the deal fall through, the seller agrees to accept $4,000 in cash and a note from the buyer for the remaining $4,000. This type of transaction is commonly referred to as a: a. purchase money mortgage b. home equity mortgage c. conventional loan d. reverse mortgage
Purchase money mortgage
In recent years, the mortgage banking industry has experienced: a. Nearly complete obsolesence b. Decentralization c. Limited consolidation d. Rapid consolidation
Rapid consolidation
Total mortgage debt outstanding as of the third quarter of 2011 approached $13.6 trillion. Which of the following types of mortgage loans accounts for the greatest percentage of mortgage debt outstanding? a. Apartment (multifamily) b. Farm c. Commercial d. Residential (1-4 family)
Residential (1-4 family)
A mortgage that is intended to enable older households to "liquify" the equity in their home is the: a. Purchase-money mortgage (PMM) b. Adjustable rate mortgage (ARM) c. Reverse annuity mortgage (RAM) d. Graduated payment mortgage (GPM)
Reverse annuity Mortgage (RAM)
he reduced importance of certain institutions in the primary mortgage market has been largely offset by an expanded role for others. Which has diminished and which has expanded? a. Mortgage bankers; commercial banks b. Commercial banks; mortgage bankers c. Savings and loan associations (thrifts); mortgage bankers d. Commercial bankers; thrifts
Savings and loan associations (thrifts); mortgage bankers
Mortgage originators can either hold loans in their portfolios or sell them to investors. When a mortgage originator decides to sell mortgages to another institution, this transaction occurs in what is commonly referred to as the: a. primary mortgage market b. secondary mortgage market c. over-the-counter market d. loan origination market
Secondary Mortgage Market
Warehousing in home mortgage lending refers to a. Short-term loans made by mortgage bankers to commercial banks. b. Short-term loans to finance the construction of builder warehouse c. Short-term loans made by commercial banks to mortgage bankers d. Long-term loans made by commercial banks to mortgage bankers
Short term loans made by commercial banks to mortgage bankers
Traditionally, a real estate broker is what type of agent for his or her principal? a. Designated agent b. Limited agent c. Special agent d. General agent
Special agent
When the seller in a contract for sale fails to perform (e.g. breach of contract, nonperformance, or default), the buyer has a variety of remedies. One such remedy is to appeal to the court to force the defaulting seller to carry out the contract. This remedy is most commonly referred to as suing for: a. Damages. b. Recission. c. Earnest. d. Specific performance.
Specific Performance
When a buyer of a property with an existing mortgage loan acquires the property without signing the note for an existing loan the buyer is acquiring the property: a. By contract for deed b. By assumption c. By deed of trust d. Subject to the mortgage
Subject to the mortgage
A type of loan that has grown in volume in recent years which has raised concerns about predatory lending practices is the: a. Adjustable rate mortgage b. Purchase money mortgage c. Subprime mortgage d. Power of sale mortgage
Subprime mortgage
Despite many innovations in the lending process that made mortgage loans more accessible and affordable to the general public, many potential borrowers faced considerable barriers in qualifying for a loan and making a down payment. Which of the following types of loans was designed for a borrower with weak credit, those who seek 100 percent financing, or who cannot document their income? a. Subprime mortgage loan b. Conventional prime home loan c. Bridge loan d. Affordable housing loan
Subprime mortgage loan
If a buyer defaults on a contract to purchase real property, which of the following is not a remedy the seller can pursue? a. rescind the contract b. Retain all or a part of the binder deposit c. Sue for assignment d. Sue for damages
Sue for assignment
Most Adjustable Rate Mortgage (ARM) loans have been marketed with a temporarily reduced interest rate commonly referred to as a: a. teaser rate b. payment cap c. prepayment rate d. rate cap
Teaser rate
The importance of brokers in the real estate market is often overlooked. In the absence of a real estate broker, one would expect all of the following to be true EXCEPT: a. The asking price would most likely be higher, on average, than in the case where a broker was involved because the seller is in total control of the sale b. A seller would most likely rely on a "thinner" market (i.e. the seller has access to fewer prospective buyers) c. Buyers would be more inclined to negotiate prices downward by at least the value of a typical commission. d. It would be more difficult for an individual to buy a property
The asking price would most likely be higher, on average, than in the case where a broker was involved because the seller is in total control of the sale
According to most listing contracts, a broker has earned a commission when a. The transaction closes b. The seller signs a listing contract c. The broker finds a buyer who is ready, willing, and able to buy on the terms specified in the listing contract. d. A contract for sale is signed by the buyer
The broker finds a buyer who is ready, willing, and able to buy the terms specified in the listing contract
A down payment deposit from a potential buyer must be held in: a. The salesperson's own bank account b. The seller's bank account c.The broker's escrow trust account d. Long-term government bonds
The brokers escrow trust account
The difference between judicial foreclosure and power of sale in the treatment of defaulted mortgages can be significant. All of the following statements regarding power of sale are true EXCEPT: a. The power of sale treatment is faster than judicial foreclosure b. The foreclosed property is typically sold through a public auction administered by the court. c. It is less costly for power of sale to be employed than judicial foreclosure. d. Typically, lenders must give proper legal notice to the borrower, advertise the sale property, and allow a required passage of time before the sale.
The foreclosed property is typically sold through a public auction administered by the court
Oral evidence in contract disputes is prohibited by: a. A parol contract b. An executory contract c. An inferred contract d. The parol evidence rule
The parol evidence rule
Although the function of commercial brokerage is the same as that of residential brokerage, the activities of commercial brokers usually differ considerably from those of residential brokers due to fundamental differences in these two markets. All of the following statements regarding commercial brokerage are true EXCEPT: a. An important part of the commercial broker's service is to provide the prospective buyer with reports that enable him to complete due diligence for the property b. Relative to residential transactions, commercial transactions tend to be larger c. Commercial brokers are often required to lower their commission in order to negotiate compromises between buyers and sellers when they reach an impasse over price. d. The parties in commercial mortgage transactions are typically less knowledgeable than those in residential transactions.
The parties in commercial mortgage transactions are typically less knowledgeable than those in residential transactions
Equitable title to real estate is: a. Legal ownership of property b. legal title obtained in a court of equity c. Title obtained by adverse possession d. The right to obtain legal title conveyed by the contract for sale.
The right to obtain legal title conveyed by the contract for sale
The Truth in Lending Act gives a home mortgage borrower how long to rescind a mortgage loan? a. Two days b. 24 hours c. A week d. Three days
Three days
The Real Estate Settlement Procedures Act (RESPA) is a federal law that requires federally chartered or insured lenders to provide buyers and sellers with information on all settlement costs. According to RESPA, loan closing information must be prepared on a special form known as the: a. Uniform Settlement Statement or HUD-1 form b. Settlement Costs and You booklet c. Good-faith estimate of settlement costs d. Certificate of occupancy
Uniform Settlement Statement or HUD-1 form
The sub agency relationship that traditionally has characterized multiple listing services (MLS) has tended to result in the wide-spread danger of: a. Deliberate dual agency b. Discrimination c. Unintended dual agency d. Monopoly
Unintended dual agency
In addition to providing home mortgages, large commercial banks have specialized in providing short-term funds to mortgage banking companies in order to enable them to originate mortgage loans and hold the loans until the mortgage banking company can sell them in the secondary market. This type of financing is commonly referred to as: a. Warehousing b. Loan underwriting c. Mortgage pipeline d. Loan servicing
Warehousing
Any contract, whether it is for the sale of real estate or some other entity, must contain five basic elements. However, any contract for the sale of real estate must adhere to two additional requirements. Which of the following contract elements is an additional requirement that must be satisfied in a contract for sale of real estate that isn't necessarily a part of other contracts? a. Written form b. Consideration c. Offer and acceptance d. No defects to mutual assent
Written form