Unit 10 Quiz - Real Estate Principles

Which Act established the Consumer Financial Protection Bureau and authorized it to regulate consumer financial products and enforce several consumer protection laws? A. Dodd-Frank Act B. Gramm-Leach-Bliley Act C. Garn-St. Germain Act D. Financial Institutions Reform, Recovery, and Enforcement Act

A. Dodd-Frank Act

All consumers are given an equal chance to obtain credit through the: A. Equal Credit Opportunity Act. B. Equal Chance Credit Act. C. Mortgage Loan Disclosure Statement. D. Seller Financing Disclosure Statement.

A. Equal Credit Opportunity Act.

Which economic stimulation tool of the Federal Reserve involves purchasing and selling government securities? A. Open market operations B. Reserve requirements C. Setting discount rates D. Options trading

A. Open market operations

_____ is a federal law that requires disclosure to borrowers of closing costs and procedures by means of a pamphlet and forms approved by the United States Department of Housing and Urban Development (HUD). A. RESPA B. CCP C. Regulation Q D. Regulation Z

A. RESPA (Real Estate Settlement Procedures Act)

The use of property's location to deny financing is known as: A. redlining. B. steering. C. panic lending. D. blockbusting.

A. redlining.

Since the security for a mortgage loan is the property, a lender will want to ensure fair market value for the property by: A. requiring an appraisal. B. using electronic underwriting software. C. making a calculated guess on the property's value. D. employing a mathematician to algebraically estimate value.

A. requiring an appraisal.

An economic situation in which the supply of money is limited and the demand for money is high, as evidenced by high interest rates is: A. tight money. B. loose money. C. hard money. D. soft money.

A. tight money.

The Real Estate Settlement Procedures Act (RESPA) applies to which of the following? A. A loan to finance 25 acres of land B. A loan secured by a first trust deed securing real estate upon which there is one-to-four family residential dwelling C. A loan to finance buying a property where the primary purpose of the purchase is for resale D. None of the choices apply

B. A loan secured by a first trust deed securing real estate upon which there is one-to-four family residential dwelling

The Seller Financing Disclosure Statement only applies to a(n): A. appraiser. B. arranger of credit. C. arranger of real estate listings. D. borrower

B. arranger of credit.

The Truth-In-Lending Act (Regulation Z) requires: A. a cap on interest rates. B. creditors to disclose credit terms so consumers can make comparisons. C. anyone negotiating a loan to have a real estate license. D. the Fed to regulate the flow of money.

B. creditors to disclose credit terms so consumers can make comparisons.

The secondary mortgage market is for buying and selling existing mortgages from the primary mortgage market or from each other. Which of the following is not a major participant in the secondary mortgage market? A. Fannie Mae B. Freddie Mac C. Carlie Mac D. Ginnie Mae

C. Carlie Mac

Which institutional lender commonly makes short-term construction loans? A. Savings and loan institutions B. Credit union C. Commercial banks D. Thrifts

C. Commercial banks

Which of the following activities is not commonly performed by a mortgage broker? A. Mortgage brokers qualify borrowers. B. Mortgage brokers take applications. C. Mortgage brokers underwrite loans and fund them at closing. D. Mortgage brokers send completed loan packages to the lender.

C. Mortgage brokers underwrite loans and fund them at closing.

What regulation implements the Federal Truth in Lending Act? A. The Dodd-Frank Act B. The Glass-Steagall Act C. Regulation Z D. Regulation V

C. Regulation Z Hint = Regulation Z implements the Federal Truth in Lending Act. [12 CFR §1026]. A creditor must furnish certain disclosures to the consumer before a contract for a loan is made. LO = 8I10 recall required disclosures in financing.

Which of the following statements is true regarding the mortgage market? A. The secondary mortgage market sells loans to the primary market B. The secondary market is where lenders make mortgages to borrowers C. The primary mortgage market is where lenders make mortgages to borrowers D. The primary mortgage market replenishes mortgage funds for the secondary market

C. The primary mortgage market is where lenders make mortgages to borrowers

The broker negotiating the loan must keep a signed copy of the Mortgage Loan Disclosure Statement for how many years? A. One B. Two C. Three D. Five

C. Three

__________ occurred when people moved money from savings and loans into investments paying a higher rate of interest. A. Discontinuance B. Discounting C. Disinterest D. Disintermediation

D. Disintermediation

Which of the following is not one of the credit reporting agencies used by lenders to research a borrower's credit record? A. Experian B. Equifax C. TransUnion D. TransAmerica

D. TransAmerica

The __________ market is the market that does not originate loans. A. lender-to-borrower B. retail C. primary mortgage D. secondary mortgage

D. secondary mortgage