CA Escrow

3. A contract that is considered valid but not enforceable if it is rejected by one of the parties is said to be a. voidable. b. void. c. validated. d. unvoidable

a A contract that is considered valid but unenforceable if rejected by one party is voidable. (p. 144)

7. Southern California escrow practices usually focus on a. the loan aspect of the transaction except for an all-cash transaction. b. the title aspect of the transaction. c. the inspections aspect of the transaction. d. none of these.

a Southern California escrow focuses on the loan aspect of a transaction, except for all-cash sales. (p. 254)

4. The forms escrow holders prepare or "draw," and which must be in "general use and of established form" in order to prevent them from the unauthorized practice of law, are essentially governed by the a. rule of "bar treaty." b. Treaty of Guadalupe Hidalgo. c. American Escrow Association. d. California Bar Association

a The documents an escrow holder may draw are limited under rule of the bar treaty. (p. 225)

2. A For-Sale-By-Owner escrow in which the principals do not have a contract a. requires escrow to indicate that the escrow instruction is the contract. b. requires escrow to inform the parties to have a contract prepared. c. requires the escrow officer to prepare a contract for the parties. d. both b and c.

b A For Sale by Owner without a sales contract requires that the escrow holder inform the parties to have one prepared. (p. 207)

5. If the property being acquired has a homeowners association (HOA), the buyer and the buyer's lender will require a homeowner's a. confirmation report to be provided by the HOA. b. certification report to be provided by the HOA. c. certification report to be provided by the title company. d. certification report to be provided to the city.

b If an acquired property has an HOA, the buyer and the lender will require it to provide an HOA certification report. (p. 227)

9. Fee simple estates are a. transferable. b. perpetual. c. inheritable. d. all of these

c Fee simple estates are inheritable. (p. 12)

4. The chain of title lists a. only the names of the parties. b. only the parties subject to grant deeds. c. the parties and documents, such as a trust or grant deed and recording date. d. none of these.

c The chain of title lists the parties and the documents, such as a trust, grant deed, and recording dates. (p. 84)

9. The Subdivision Map Act applies to the subdivision of land into a. two or more parcels. b. no fewer than five parcels. c. no fewer than four parcels. d. housing tracts of 10 parcels or more.

a The Subdivision Map Act applies to subdivisions of land into two or more parcels. (p. 367)

10. The TSG provides an indemnification for the consequences of any title record error in the foreclosure proceeding and protects the a. the trustee and beneficiary from damages. b. the loan officer from damages. c. the borrower from damages. d. none of these.

a The TSG protects the trustee and the beneficiary from damages because of an error in any title in the foreclosure proceedings. (p. 447)

7. The Unruh Civil Rights Act is a state law prohibiting discrimination by a. all businesses. b. only lenders. c. only lenders and real estate agents. d. only lenders, real estate agents, escrow holders, and title companies.

a The Unruh Civil Rights Act prohibits businesses from discriminating. (p. 366)

1. The closing statement usually includes columns headed "Seller," "Bor-rower," "Buyer," and "Lender" and in standard bookkeeping practice also includes a. credits and debits. b. debits and rebates. c. debts and rebates. d. rebates and credits.

a The closing statement reflects columns identified as "credits" and "debits." (p. 290)

1. The entity that receives the borrower's payments is called the a. loan servicer. b. loan processor. c. Freddie Mac. d. investment servicer.

a The entity receiving the borrower's payments is called the loan servicer. (p. 265)

10. If the buyer of a liquor license is liable for taxes to the Franchise Tax Board, the Board of Equalization, or the Employment Development Department, the escrow holder must a. obtain a written release from the department to whom the taxes are due prior to allowing escrow to close. b. hold back the amount of the taxes due at the close of escrow. c. withhold the monies due from the buyer's funds and forward to the appropriate agency. d. obtain a written release from the Department of Alcoholic Beverage Control before allowing escrow to close.

a The escrow holder must obtain a written release from FTB, EDD, or the Board of Equaliza-tion for a buyer liable for taxes to any of them. (p. 403)

6. If the escrow property involves rehabilitation or renovation, the lender may allow the work to take place after escrow closing, providing the escrow holder a. keeps an escrow account open for hold-back funds. b. keeps an escrow account open for kickback funds. c. forwards funds to the lender in the amount of the work to be returned to the borrower after the work is completed. d. draws a note and trust deed for the amount of the work required.

a The lender may allow funds to be held by escrow at closing for work required, referred to as a hold-back. (p. 386)

10. As the principals direct the transaction, the escrow holder is said to be more a. reactive than proactive. b. proactive than reactive. c. active than reactive. d. reactionary than proactive.

a The principals direct the transaction, and the escrow holder is more reactive than proactive. (p. 65)

4. Property taxes in California are based on a fiscal year beginning a. July 1. b. June 30. c. March 1. d. January 1.

a The property tax year in California begins July 1. (p. 268)

2. A bilateral contract occurs when a promise to perform is made by one party, a. but an equal promise to perform is not required of the party. b. but typically few contracts are bilateral. c. and a second party makes an equal promise to perform. d. and it carries the same effect as a unilateral contract.

c A bilateral contract occurs when a promise to perform from a party is met by an equal prom-ise. (p. 143)

7. The Natural Hazard Disclosure Statement is NOT required for properties a. located in a special flood hazard zone. b. located in a seismic hazard zone. c. having five units or more. d. both a and b.

c A Natural Hazard Disclosure Statement is required only for one-to-four-unit properties. (p. 159)

10. A common interest or tenant's property is one a. with joint tenants. b. with community property with right of survivorship. c. with tenants in common. d. none of these.

c A common interest property is one with tenants in common. (p. 10)

9. A quitclaim deed a. guarantees title protection. b. is not valid. c. conveys title from the grantor to the grantee with no warranty or guaranty. d. may not convey less than the entire interest of the grantor.

c A quitclaim deed conveys title from the grantor to the grantee with no guaranty. (p. 22)

3. The Statement of Information or Statement of Identity a. is a statement of the buyers' personal information for the lender. b. is a statement provided to the buyer from escrow regarding fees. c. is a statement in which the buyer provides information necessary for the title company to adequately search public records in order to issue a policy. d. none of these.

c A statement of information or identity asks the buyer to provide information necessary for the title company's search. (p. 209)

7. An agreement that the seller of a business will not compete against the buyer by reopening his business at another location within a specified dis-tance, or by opening a new but similar business if the buyer's purchase of the property included buying the business's "name," is called the a. condition not to compete. b. restriction not to compete. c. covenant not to compete. d. declaration not to compete

c An agreement that a seller of a business will not compete against the buyer is covenant not to compete. (p. 401)

1. Bulk sales laws are designed to prevent a. sellers from defrauding their buyers. b. sellers from defrauding the State of California. c. sellers from defrauding their creditors. d. creditors from defrauding their debtors

c Bulk sales laws are designed to prevent sellers from defrauding their creditors. (p. 398)

5. The CLTA standard title policy a. never includes any coverage for off-record matters. b. includes coverage for all off-record matters. c. includes coverage for forgery and fraud. d. is the most expensive.

c CLTA standard policies cover forgery and fraud. (p. 98)

5. A patent is a deed transferring land from a. an inventor to the federal government. b. an incompetent person to one who is competent. c. one spouse to another. d. the federal or state government to a private individual

d A patent deed transfers land from the federal or state government to a private individual. (p. 86)

1. A grant that may be deposited by the grantor with a third person, to be delivered on performance of a condition and while in the possession of the third person, is a. an escrow. b. a bailee. c. a promisor. d. encumbered.

a A grant deposited by the grantor with a third person delivered on performance of a condi-tion is called an escrow. (p. 53)

10. If the exchangor buys a replacement property before selling the property to be relinquished, the exchange is called a a. reverse exchange. b. 200% rule exchange. c. 95% rule exchange. d. relinquished exchange

a A reverse exchange is buying a replacement property before selling the old property. (p. 391)

4. The Statement of Identity is used to obtain which of the following information? a. Liens or judgments against the buyer b. The credit score of the buyer c. Bankruptcies or probates which may affect title d. Both a and c

d A statement of identity obtains liens, judgment, and bankruptcy information of the party. (p. 209)

3. The title report will show easements, including a. dominant tenements. b. dormant tenements. c. servient tenements. d. both a and c.

d A title report shows dominant and servient tenements. (p. 248)

4. Debits would reflect the buyer's a. new loan. b. appraisal. c. escrow and title fees. d. both b and c.

d The buyer's debits include appraisal and escrow and title fees. (p. 292)

3. Items prepaid by the buyer or to be advanced to the buyer would be shown as a credit on the buyer's statement and may include a. buyer's deposit toward the purchase price. b. buyer's new loan. c. balance of buyer's remaining funds to be placed into escrow. d. all of these.

d The buyer's deposit, loan, and balance of funds due are shown as a credit on closing state-ment. (p. 292)

1. The buyer of a multifamily property may request, and if obtaining a loan, the lender will require a. a rent roll reflecting current monthly rents and security deposits. b. copies of lease and rental agreements. c. amount of any rental delinquency. d. all of these.

d The lender of a multifamily property requires the rent roll, copies of leases, and information regarding delinquent rents. (p. 377)

7. Lenders that use deeds of trusts (trust deeds) are called a. mortgagees. b. trustors. c. mortgagors. d. beneficiaries

d The lender under a trust deed is referred to as the beneficiary. (p. 444)

1. The preliminary title report a. reveals the extent of coverage protection and any exclusion to it. b. is essentially a report of conditions discovered that affect title. c. may often contain items that require resolution or elimination before the title policy will be issued. d. all of these.

d The preliminary title report indicates coverage and exclusions based on conditions discov-ered and items to be resolved. (p. 247)

7. Prepay penalties are common for commercial real estate loans and include a. declining prepay penalty. b. yield Maintenance. c. defeasance. d. all of these.

d The prepay penalty may be declining prepay, yield maintenance, and defeasance. (p. 387)

3. The title company's primary facility, which stores copies of all public records from the county in which the property is located, is the a. title warehouse. b. record warehouse. c. record and title warehouse. d. title plant.

d The title company's primary facility that stores copies of all public records is the title plant. (p. 81)

5. Title policies offer financial protection and recourse to the a. escrow company if it commits an error in its search. b. seller carrying financing for the buyer if the buyer fails to pay. c. buyer who becomes insolvent. d. buyer who is financially damaged by the title company's faulty search.

d Title policies offer financial protection to the buyer who is financially damaged by the title company's faulty search. (p. 60)

1. True easements may consist of rights that may not be obvious, such as ease-ments for a. sewer lines. b. private utility lines that cross over or under the surface. c. the right to receive unrestricted light and air from an adjacent servi-ent estate. d. all of these

d True easements may consist of a right that may not be obvious, such as private utility lines and the right to receive air from an adjacent estate. (p. 416)

2. Federal truth-in-lending disclosures are provided to the borrower by a. a good-faith estimate of settlement costs. b. a Truth-in-Lending Disclosure Statement. c. the title officer. d. both a and b.

d Truth-in-lending disclosures are made by delivering the good-faith estimate of settlement costs and the TIL statement. (p. 357)

5. Under the statue of frauds, which of the following contracts must be in writing? a. A real estate listing agreement b. A real estate purchase agreement c. An agreement between brokers to share a commission d. Both a and b

d Under the statute of frauds, a real estate listing or purchase agreement must be in writing but not commission-sharing agreements. (p. 147)

9. The title company becomes involved in facilitating title protection to the lender using a deed of trust through the a. trustee sale guarantee (TSG). b. trustor sale guarantee (TSG). c. trust-deed sale guarantee (TSG). d. trustee seller's guarantee (TSG).

a A special title report used for lenders of foreclosed properties is the trustee sale guarantee (TSG). (p. 447)

8. The practice of adding to the estimated closing statement a surplus to the amount of funds necessary for the buyer to close escrow is a. called padding. b. called packing. c. unethical. d. illegal

a A surplus added to the estimated buyer's funds for closing is called padding. (p. 347)

8. If a declared homestead is voluntarily sold and the proceeds from the sale are reinvested in a new residence, the new home may be selected as a declared homestead if it is a. selected within six months of closing. b. selected upon escrow closing. c. selected within 180 days of closing. d. both a and c.

a A declared homestead property, if sold and the proceeds reinvested within six months in a new home, may be selected as a declared homestead. (p. 236)

4. If a buyer fails to comply with the bulk sale notice requirements, the buyer is a. liable for damages in the amount of any claims against the seller. b. liable for double damages in the amount of any claims against the seller. c. not liable for damages against the seller. d. not liable if a good-faith effort was made to comply.

a A buyer who fails to comply with bulk sale notice requirements may be liable for damages in the amount of any claims against the seller. (p. 399)

5. The bulk sales law requires that for any claim to be valid, it must be filed within a. one year of the date of the sale. b. two years of the date of the sale. c. 180 days of the date of the sale. d. 45 days of the date of the sale

a A claim to be valid under bulk sale law must be filed within one year of the date of sale. (p. 399)

4. To be valid, effective, and enforceable, a contract must include a. mutual consent, capacity to contract, consideration, and a lawful object. b. mutual consent, capacity to contract, and consideration. c. capacity to contract, consideration, and a lawful object. d. mutual consent, consideration, and a lawful object.

a A valid, effective, and enforceable contract includes mutual consent, capacity to contract, consideration, and a lawful object. (p. 144)

1. An ALTA extended coverage loan policy differs from the standard coverage policy by offering a. insurance against matters not of public record. b. a smaller deductible. c. fire insurance. d. flood insurance.

a An ALTA extended coverage loan policy covers matters not of record. (p. 102)

6. A clause in the lender's note that allows the lender to call the loan due and payable in the event of a transfer of title is alienation or a. acceleration. b. accommodation. c. amortization. d. assumption.

a An acceleration clause allows the lender to call the note due and payable if title is trans-ferred. (p. 251)

10. An all-inclusive deed of trust is a. typically acceptable to existing lenders. b. called a wrap-in deed. c. illegal. d. a new first deed of trust

a An all-inclusive deed-of-trust is a junior deed of trust. (p. 39)

8. An estate at will a. has no specified term. b. is always in writing. c. is for a specified term. d. is for greater than one year

a An estate at will has no specified term. (p. 13)

1. An express contract is one that has been put into words, a. whether written or verbal. b. in writing only. c. verbally only. d. none of these.

a An express contract may be written or verbal. (p. 143)

3. Under the general education requirements for obtaining a California real estate salesperson license, and individual must a. complete three college-level courses as specified by the Bureau of Real Estate. b. possess a degree from a four-year university. c. possess a high school diploma or GED. d. complete eight college-level courses as indicated by the Bureau of Real Estate.

a Before taking the California real estate salesperson license exam, an applicant must com-plete three college-level courses as specified by BRE. (p. 177)

5. Unless exempted under the law, to take the California real estate broker's license exam, an individual must have experience as a full-time California licensed salesperson a. for two of the last five years. b. for two years. c. for five years. d. for 18 months.

a California real estate broker exam applicants must have full-time licensed salesperson expe-rience for two out of the last five years unless they have a college degree or are a member of the State Bar. (pp. 179, 180)

8. Encumbrances against a property consist of a. taxes, assessments, and liens, as well as building restrictions, encroachments, easements, and pending legal actions. b. off-record matters, such as zoning restrictions and proposed assessments. c. both a and b. d. neither a nor b.

a Encumbrances include taxes, assessments, liens, restrictions, easements, encroachments, and legal actions. (p. 127)

7. An estate for years a. is a lease with a specified termination date. b. is a month-to-month rental agreement. c. must always be for one year. d. both a and c.

a Estate for years is a lease with a specified termination date. (p. 13)

6. FHA loans require that impound accounts be established for taxes a. and insurance regardless of loan-to-value. b. and insurance only if LTV exceeds 90%. c. only regardless of LTV. d. only if LTV exceeds 90%.

a FHA requires impound accounts, regardless of LTV. (p. 336)

10. Under federal law, the buyer of a residential one-to-four-unit building con-structed before 1978 must be given a booklet prepared by the government regarding the possibility of lead-based paint and a. 10 days to inspect the property. b. 17 days to inspect the property. c. 3 days to inspect the property. d. a reasonable amount of time to inspect the property.

a Federal law allows the buyer 10 days to inspect for lead-based paint. (p. 190)

4. Following the Mexican-American War, title to properties was established under a. the Treaty of Guadalupe Hidalgo. b. the Treaty of Juan Valdez. c. the provisions of the Bear Flag Agreement. d. John C. Fremont.

a Following the Mexican-American War, title to properties was established under the Treaty of Guadalupe of Hidalgo. (p. 2)

3. If the seller is a foreign person, unless exempt, the buyer must a. withhold and send 10% of the sale price from the seller's proceeds to the IRS. b. send 10% of the sale price to the IRS toward the buyer's income taxes. c. notify the seller of possible liability for taxes. d. authorize escrow to hold the seller's net proceeds until the IRS deter-mines the tax liability, if any.

a If a seller is a foreign person, the buyer must withhold and send 10% of the sales price from seller's proceeds to the IRS. (p. 232)

9. If only one party has signed the bilateral escrow instructions, escrow a. is not considered open. b. is considered open. c. must be cancelled. d. is considered cancelled

a If only one party has signed escrow instructions, escrow is not considered open. (p. 254)

8. Independent escrow agents are required to possess liquid assets in the amount of a.$25,000. b.$50,000. c.$100,000. d.$200,000.

a Independent escrow agents are required to possess liquid assets of $25,000. (p. 62)

4. Intestate succession applies to one a. who died without a will. b. who only resided outside California. c. who was only unmarried. d. all of these.

a Intestate succession applies to one who died without a will. (p. 19)

8. In Section 1031 exchange, the term "like for like," or "like-kind," is defined as a. properties of the same nature or character, even if they differ in quality. b. improved for improved only and unimproved for unimproved only. c. real properties, both within and outside the United States. d. if the property is real estate, any real estate whether investment or personal residence.

a Like-kind means properties of same nature or character even if they differ in quality. (p. 389)

6. Claimants under a mechanic's lien are divided into which four groups under the law? a. Contractors, subcontractors, laborers, and materialmen b. Contractors, homeowners, lenders, and materialmen c. Contractors, homeowners, laborers, and materialmen d. Subcontractors, vendors, laborers, and materialmen

a Mechanics' liens claimants include contractors, laborers, subcontractors, and materialmen. (p. 269

4. Under California law, members of the state bar who want to obtain a Cali-fornia real estate license are a. exempt from the college course requirements. b. required to complete the college courses as required. c. required to complete only one of the college level courses. d. exempt from college course requirements if practicing real estate la

a Members of the State Bar in California are exempt from the college course requirements. (p. 177)

3. The open and notorious use of another's land, or with the knowledge and acquiescence of that servient estate landowner, a. is a requirement to establish an easement by prescription. b. is a required to occur for three years to create an easement by prescription. c. is both a and b. d. is neither a nor b.

a Open and notorious use of another's land or with the knowledge and acquiescence of the owner is required to create an easement by prescription. (p. 418)

10. The metes-and-bounds description starts at a fixed POB, which refers to a. point of beginning. b. path of beginning. c. point of beacon. d. point of base line.

a POB as used in a metes-and-bounds land description means point of beginning. (p. 430)

10. The Subdivided Lands Act applies to subdivisions of five lots or more and provides for both a preliminary approval and a final approval, referred to as a. pink paper and white paper, respectively. b. yellow paper and white paper, respectively. c. pink paper and yellow paper, respectively. d. white paper and pink paper, respectively

a Pink Paper refers to the preliminary approval of a subdivision; White Paper is the final approval. (p. 369)

5. A true easement prohibits a right to the profits or proceeds from the servient estate land, which is called a. profit á prendre. b. prescription. c. appurtenant. d. incorporeal

a Profit á prendre refers to the prohibition of rights to profits or proceeds from the servient estate. (p. 422)

5. Property is considered a. either real, not capable of being moved, or personal, that which may be moved. b. real, whether movable or not, and personal. c. immovable. d. none of these.

a Property is considered either real or personal. (p. 9)

6. Property taxes in California become a lien on the property a. at 12:00 pm on January 1. b. at 12:00 pm on March 1. c. at 12:00 pm on June 30. d. at 12:00 pm on July 1.

a Property taxes in California become a lien on property at noon on January 1 each year. (p. 294

8. Prorations may be based on a. either a 30-day month or the actual days. b. only a 30-day month. c. only the actual days. d. 30.42 days per month (364 divided by 12).

a Prorations may be based on a 30-day month or actual days. (p. 212)

4. Under RESPA, the lender is required to provide the borrower with a. information booklets authored by HUD and a good-faith estimate of closing costs to borrowers before the close of escrow. b. only a good-faith estimate of closing costs at closing. c. only information booklets authorized by HUD. d. none of these.

a RESPA requires the lender to give the borrower an information booklet prepared by HUD and a good-faith estimate of costs before close of escrow. (pp. 364, 365)

4. Regulated lending institutions include a. national banks, state-chartered banks, federal savings and loans, and federal credit unions. b. only national banks and federal savings and loans. c. only national banks, federal savings and loans, and federal credit unions. d. only those regulated by the U.S. Treasury

a Regulated lending institutions include national banks, state-chartered banks, federal savings banks, savings and loans, and federal credit unions. (p. 442)

9. Under Regulation Z, a creditor is defined as a. one who extends credit more than five times a year secured by a dwelling. b. one who extends credit one to four times a year secured by a dwelling. c. anyone who extends credit. d. anyone who obtains credit

a Regulation Z defines a creditor as one who extends credit secured by a dwelling more than five times a year. (p. 166)

10. Rental prorations are usually based on a. a 30-day month, regardless of the actual number of days in the month. b. only the actual number of days in the month. c. 365 days a year. d. both a and c.

a Rental prorations are based on a 30-day month regardless of the actual number of days in the month. (p. 304)

3. The borrower must be given a three-day right of rescission, with the lender prohibited from funding and the escrow holder prohibited from closing, for a. a refinance loan of the borrower's primary residence. b. all loans. c. all refinance loans. d. a refinance loan of rental properties only

a Right of rescission applies to a refinance of primary residence. (p. 358)

10. Documents that the escrow officer may prepare do NOT include a. those not of an established form. b. deeds of trust. c. notes. d. bills of sale.

a Signing an affidavit of occupancy warns the borrower of possible mortgage fraud. (p. 224)

1. The federal Truth in Lending Act requires a mortgage lender, before the borrower becomes obligated to receive loan funds, to provide the borrower with a. creditor's identity, amount financed, finance charge (including inter-est and fees), annual percentage rate, and payment schedule. b. only the amount financed, annual percentage rate, and payment schedule. c. only the identity of the creditor, amount financed, interest rate, and payment. d. only the amount financed, finance charge, annual percentage rate, and payment schedule.

a TIL requires disclosing before the borrower is obligated under the loan, creditor name, loan amount, finance charge and rate, APR, and payment schedule. (p. 357)

3. California foreclosure law under the California foreclosure time line pro-vision applies to a. owner-occupied homes having one to four units. b. both owner-occupied and investment homes having one to four units. c. all residential properties, regardless of number of units. d. all real estate properties.

a The California foreclosure time line applies to one-to-four-unit owner-occupied homes. (p. 441)

1. The Federal Housing Administration was established by a. the National Housing Act of 1934. b. the HOLC. c. the FHLB. d. Herbert Hoover

a The National Housing Act of 1934 established the Federal Housing Administration (FHA). (p. 327)

10. The value initially established by the PCOR is called the a. base year value. b. baseline value. c. basic year value. d. factored base year value

a The PCOR establishes the base year value. (p. 28

3. The purpose of notifying the state Board of Equalization of the bulk sale is to a. obtain a certificate of sales tax clearance and a seller's permit. b. impound and control the distribution of proceeds. c. both a and b. d. neither a nor b.

a The purpose for notifying the state Board of Equalization under the bulk sale law is to obtain a tax clearance and a seller's permit. (p. 399)

1. Title insurance protects the property against losses due to a. defects in title. b. defects to the property. c. acts of God. d. earthquake.

a Title insurance protects the property against losses due to defects in title. (p. 79)

7. In order to be valid, deeds must be in writing, include the property description, contain conveying language, identify a grantee, and a. be signed by a competent grantor. b. be signed by a competent grantee. c. both a and b. d. no other condition.

a To be valid, grant deeds must be in writing and must be signed by a competent grantee. (p. 21)

9. To find the sales price if the transfer tax is known, divide the transfer tax a. by $0.55, then multiply the result by $500. b. by $1.10, then multiply the result by $1,000. c. by $1.10, then multiply the result by $500. d. both a and b.

a To find the sales price, divide the transfer tax by $0.55 and multiply by $500. (p. 301)

5. Transfer of title to real property is called a. alienation. b. accession. c. annexation. d. none of these.

a Transfer of title to real property is called alienation. (p. 20)

2. Trust deeds transfer only a. dormant title. b. dominant title. c. both fee title and dominant title. d. both fee title and dormant title.

a Trust deeds transfer only dormant title. (p. 23)

9. The two basic groups of liquor licenses are a. on-sale and off-sale. b. new and previously issued. c. "beer and wine" and "general." d. all of these

a Two groups of liquor licenses are on-sale and off-sale. (p. 403)

7. Under truth-in-lending disclosure laws, a borrower obtaining a loan, subject to its provisions, must obtain a revised TIL from the lender if the originally disclosed rate is increased by 0.125% or greater and must wait an additional a. three business days before loan signing. b. three calendar days before loan signing. c. seven business days before loan signing. d. seven calendar days before loan signing

a Under TIL disclosure laws, a borrower's rate increase of 0.125% or greater requires waiting three more business days before signing loan documents. (p. 184)

1. The Making Home Affordable Program, part of the Helping Families Save Their Homes Act of 2009, continues to offer assistance to homeowners in default through two other plans known as a. HARP and HAMP. b. HELP and HOPE. c. HARP and HOME. d. HELP and HAMP.

a Under the Helping Families Save Their Homes Act of 2009, HARP refers to the Home Affordable Refinance Program and HAMP refers to the Home Affordable Modification Program. (p. 439)

8. Underwriting is defined as a. writing under or at the end of something. b. writing at the beginning of something. c. the process of writing a legal description. d. the process of writing a will.

a Underwriting is defined as "to write under or at the end" of something. (p. 88)

6. Using the Statement of Information (SI), the title searcher performs a a. general index run. b. general informational run. c. property boundary search. d. legal description verification.

a Using a statement of information (SI), the title searcher performs a "general index run." (p. 87)

9. Under California law, a beneficiary acquiring a property through foreclosure and who is the seller in an escrow transaction a. is not exempt from delivering a Transfer Disclosure Statement to the buyer. b. is not exempt from being required to disclose any known defects to a buyer. c. is exempt from being required to disclose any known defects to a buyer. d. and is represented by a real estate agent, neither the seller nor the agent is required to deliver a Transfer Disclosure Statement to the buyer.

b A beneficiary who acquired a property through foreclosure is not exempt from disclosing defects. (p. 190)

6. A license is distinguishable from an easement in that it a. conveys an interest in the land. b. expires with the death of the holder. c. is assignable to another. d. is unrevocable.

b A license expires with the death of the holder. (p. 423)

8. A master insurance policy would be obtained for a. a new single-family home. b. a condominium. c. protection against forgery or fraud. d. protection against off-record matters

b A master insurance policy is obtained for condominium properties. (p. 156)

2. The short sale occurs at escrow closing when the seller's lender agrees to a. a short escrow. b. accept less for the loan payoff than what is due. c. both a and b. d. neither a nor b.

b A short sale occurs at escrow closing when the seller's lender agrees to accept less for the loan payoff than the amount due. (p. 440)

9. A township a. is one-mile square. b. is six-miles square. c. is six square miles. d. has 42 sections.

b A township is six miles square. (p. 428)

8. Under California Buyer's Choice Act, a beneficiary who obtained a prop-erty through foreclosure and violates the law as a seller may be a. subject to damages twice the amount of escrow and title charges. b. subject to damages three times the amount of escrow and title charges. c. within its legal rights to do so in every instance. d. subject to a written order to cease but no financial penalty is imposed.

b Buyer's Choice Act violators are subject to damages three times the escrow and title fees. (p. 189)

6. The California Association of REALTORS® Purchase Agreement and Joint Escrow Instructions calls for a loan contingency to be removed a. in 7 days, unless otherwise stated. b. in 17 days, unless otherwise stated. c. in 30 days, unless otherwise stated. d. as specified under specific California law.

b CAR purchase contracts calls for loan contingency removal in 17 days. (p. 182)

6. Estates in real property are a. either free or not. b. either freehold or less than freehold. c. founded in French law. d. founded in Spanish law

b Estates in property are either freehold or less than freehold. (p. 11)

7. Geographic coordinates a. are not commonly used to locate points of the surface of the earth. b. consist of the intersection of a latitude and a longitude. c. are measured in feet and yards. d. are none of these.

b Geographic coordinates refer to locating a point on the earth by the intersection of latitude and longitude. (p. 425)

1. If the escrow holder is using the CAR Purchase Agreement and Joint Escrow Instructions for the escrow's opening information, a. the escrow officer must still prepare a new and complete instruction. b. the escrow officer usually prepares only a supplemental instruction to begin with. c. the escrow officer is prohibited from using the CAR form as the instruction. d. the boilerplate language is contained in the CAR form so no addi-tional instructions need to be prepared.

b If a CAR purchase contract is used, the escrow holder usually only prepares supplemental instructions. (p. 200)

5. All mortgage brokers in California must be licensed by the a. Bureau of Real Estate only. b. Bureau of Real Estate or Department of Corporations. c. Department of Housing and Urban Development. d. Department of Finance.

b Mortgage brokers in California must be licensed by either the Bureau of Real Estate or the Department of Corporations. (p. 333)

4. Mortgage insurance is required for all loans sold to Fannie Mae and Freddie Mac a. without exception. b. having LTVs greater than 80%. c. having LTVs less than 80%. d. having LTVs greater than 75% but less than 80%.

b Mortgage insurance is required for all loans sold to Fannie Mae and Freddie Mac with LTVs greater than 80%. (p. 331)

1. California law specifically states that a real estate broker may a. nominate an escrow holder as a condition to a transaction. b. not nominate an escrow holder as a condition to a transaction. c. nominate an escrow holder if the agent represents the seller. d. nominate an escrow holder if the agent represents the buyer

b Real estate brokers may not nominate the escrow holder as a condition of sale. (p. 176)

10. Bilateral escrow instructions are prepared at the opening of escrow a. as is the custom for Northern California escrow transactions. b. as is the custom for Southern California escrow transactions. c. are seldom prepared. d. are illegal.

b Southern California escrow custom is to prepare bilateral escrow instructions at opening. (p. 214)

8. Southern California purchase escrow instructions are a. unilateral. b. bilateral. c. individual. d. both b and c.

b Southern California purchase escrow instructions are bilateral. (p. 254)

2. The buyer's lender will require tenants to verify their current monthly rent and security deposit. This is provided on a form called a. Stoppel Certificate. b. Estoppel Certificate. c. Certificate of Rent. d. Verification of Rent (VOR).

b Tenants verify rent terms to the lender on estoppel certificates provided by the lender. (p. 377)

9. In a delayed Section 1031 exchange, the exchanger, in order to defer any capital gains tax, must comply with the "45-180" rule, which means the exchangor has 45 days from a. closing escrow on his property to identify the new property has and then another 180 days to close that escrow. b. closing escrow on his property to identify the new property and then has, including the initial 45 days, a total of 180 days to close that escrow. c. opening escrow on his property to identify the new property and then another 180 days to close that escrow. d. opening escrow on his property to identify the new property and then has, including the initial 45 days, a total of 180 days to close that escrow.

b The 45-180 rule: Exchangor has 45 days from closing his property to identify a replacement and 180 days to close new property. (p. 391)

5. In a refinance transaction for an apartment building, the lender will require the borrower to provide the IRS income tax form that indicates rental income received during the year and lists the itemized operating expense. That form is the a. Schedule C. b. Schedule E. c. Schedule L. d. Form 2106.

b The IRS form that lists borrower's rental property income and expenses is Schedule E. (p. 379)

2. The buyer's consideration is shown on the closing statement as a a. credit. b. debit. c. debt. d. none of these.

b The buyer's consideration is shown as a debit on closing statement. (p. 291)

The character of property interests and private property rights in California can be traced back to a. the French. b. the Spanish. c. the English. d. none of these.

b The character of property interests and private property rights in California can be traced back to the Spanish. (p. 2)

4. The escrow holder holds documents and money as a a. neutral depository for only one principal. b. neutral depository for both principals. c. partial agent for the seller. d. partial agent for the buyer.

b The escrow holder holds documents and money as a neutral depository for both principals. (p. 57)

3. The independent escrow office manager must have a. 3 years' experience. b. 5 years' experience. c. 7 years' experience. d. 10 years' experience.

b The escrow office manager must have five years of experience. (pp. 62, 67)

5. If the buyer is going to assume the seller's existing loan, the escrow officer will order a. a demand statement from the lender. b. a beneficiary statement from the lender. c. an offset statement from the lender. d. a beneficiary statement from the seller

b The escrow officer orders a beneficiary statement from the lender for a buyer assuming a seller's loan. (p. 250)

9. Which of the following is a position at an escrow company? a. Escrow advisor b. Junior escrow officer c. Escrow facilitator d. None of these

b The escrow positions include the junior escrow officer. (p. 70)

5. The first half of California property taxes is due a. December 1 and delinquent if not paid by February 1. b. November 1 and delinquent if not paid by December 10. c. July 1 and delinquent if not paid by September 1. d. November 10 and delinquent if not paid by December 1.

b The first half of property taxes is due Nov. 1 and is delinquent if not paid by Dec. 10. (p. 268)

9. The preliminary title report indicates a. the conditions under which a lender will approval a loan. b. the conditions under which a title insurance policy will be offered to a buyer. c. the conditions under which a title insurance policy will be offered to a seller. d. none of these.

b The preliminary title report shows the conditions under which a title policy will be offered. (p. 89)

7. The second half of property taxes becomes due on a. April 10. b. February 1. c. February 10. d. June 30.

b The second half of property taxes is due on February 1. (p. 294)

5. The take sheet a. outlines the escrow process and is provided to the buyer. b. is an orderly sequence of questions the escrow holder asks the parties. c. is neither a nor b. d. is both a and b.

b The take sheet is an orderly sequence of questions asked by escrow of the parties. (p. 211)

8. The two basic categories of liquor licenses are a. off-sale and on-sale. b. new and previously issued. c. "beer and wine" and "general." d. all of these.

b The two categories of liquor licenses are new and previously issued. (p. 402)

10. The trust deed is a. seldom used by lenders in California. b. almost exclusively used by lenders in California. c. used to convey title but without representations of encumbrances on title. d. used to convey title from one spouse to another

b Trust deeds are used almost exclusively in California. (p. 133)

7. California withholding, if the conditions apply, require the buyer to withhold a. 10% of the sellers' proceeds and send to the FTB. b. 3¹⁄₃% of the sale price and send to the FTB. c. 3¹⁄₃% of the seller's proceeds and send to the FTB. d. 3¹⁄₃% of the seller's proceeds and send to the IRS.

b Under California withholding, if applicable, the buyer withholds and sends 3¹⁄₃% of the sales price from the seller's proceeds to FTB. (p. 234)

8. Zoning is an example of a. eminent domain. b. police power. c. liens. d. easements.

b Zoning is an example of police power. (p. 367)

1. California CC Section 1000 specifies that property in the state of California may be acquired in which of the following five ways? a. Occupancy, Accession, Transfer, Will, and Procession b. Occupancy, Recession, Transfer, Will, and Succession c. Occupancy, Accession, Transfer, Will, and Succession d. Accession, Transfer, Will, Succession, and Prevision

c California Civil Code Section 1000 specifies that property in the State of California may be acquired in one of five ways: occupancy, accession, transfer, will, and succession. (p. 18)

10. California's good funds law provides that a. wire transfer funds are good the same day received. b. cashier's check funds are good the next business day. c. both a and b. d. neither a nor b.

c California's good funds law provides that wire transfer funds are good the same day received and cashier's checks are good the next business day. (p. 257

California's property ownership concepts have their roots in a. French common law. b. Spanish common law. c. English common law. d. none of these.

c California's property ownership concepts have their roots in English law. (p. 2)

4. Covenants, conditions, and restrictions (CC&Rs) can apply to a. only condominiums. b. condominiums and planned unit developments. c. all real property. d. only new construction.

c Covenant, conditions, and restrictions can apply to all real property. (p. 249)

2. A lender who discovers that the borrower's property has no access to a pub-lic street would be protected under a. a CLTA policy. b. a LCTA policy. c. an ALTA extended coverage policy. d. could not be covered

c Defects such as no access to a public street are covered by an ALTA extended coverage policy. (p. 123)

9. Eminent domain is a. the process whereby a citizen claims title to public land. b. exercisable by the government only if the land owner agrees. c. the power of the government or a quasi-public agency to take private property for a public use upon payment of just compensation. d. the ability of a public agency to take private land with no compensa-tion paid.

c Eminent domain is the power of condemnation by a public agency. (p. 130)

2. Bulk sales laws require that an escrow be opened a. for all sales involving personal property. b. for all sales involving a business in which real estate is not a part. c. for all sales involving a liquor license. d. only voluntarily.

c Escrow is required for a transaction involving a liquor license. (p. 398)

2. The government agency responsible today for promoting adequate and affordable housing, economic opportunity, and a suitable living environ-ment free from discrimination is a. NHA. b. HHFA. c. HUD. d. HOLC.

c HUD is the government agency responsible for promoting adequate and affordable housing, economic opportunity, and a suitable living environment free from discrimination. (p. 328

5. If a buyer's loan payment will include a monthly reserve for hazard insur-ance, the escrow closing statement shows prepaid and impound insurance covering a. 12 months. b. 13 months. c. 14 months. d. 16 months.

c If the borrower's loan includes impounds, the closing statement shows 14 months' insurance. (p. 293)

7. If a searcher discovers an error in spelling on a previously recorded deed, a. the title company must go to court to resolve it. b. the escrow company must go to court to resolve it. c. escrow may send a corrected deed to the grantor to sign and record. d. it can be ignored.

c If the searcher discovers an error in spelling on a previously recorded deed, escrow may send a corrected deed to the grantor to sign and record. (p. 87)

10. When all the lender's conditions have been satisfied and funding is approved by the lender, the person who initiates the request for funding is the a. loan officer. b. lender's processor. c. escrow officer. d. title officer.

c It is the escrow officer who initiates the request for funding the loan. (p. 350)

9. The loan underwriter's approval letter may require additional conditions that must be satisfied before the loan may close and that include a. PTD items, meaning "prior to documents" being drawn by the lender. b. PTF items, meaning "prior to funding" the loan. c. Both a and b. d. Neither a nor b.

c Loan conditions may include PTD, meaning prior to documents being drawn, and PTF, which means prior to funding. (p. 348)

2. Many originating lenders today use the services of MERS, which stands for a. Mortgage Escrow Registration System. b. Mortgage Escrow Recording System. c. Mortgage Electronic Registration System. d. Mortgage Electronic Recording System.

c MERS stands for Mortgage Electronic Registration System. (p. 265)

3. Probate is NOT required if title was held as a. tenants in common. b. partnership. c. joint tenants. d. joint partners.

c Probate is not required if title was held as joint tenants. (p. 19)

6. Recording a document provides a. destructive notice. b. actual notice. c. constructive notice. d. requested notice.

c Recording a document provides constructive notice. (p. 20)

6. Releasing buyer's deposit funds to the seller during the escrow is a. common. b. illegal. c. can offer serious consequences if problems are encountered during escrow. d. usually advisable.

c Releasing buyer's deposit funds to the seller could cause serious consequences if problems arise during escrow. (p. 231)

Spanish missions began sprouting up along the California coast, known at the time as part of a. Lower California. b. Baja California. c. Alta California. d. Alta Mexico.

c Spanish missions began sprouting up along the California coast, known at the time as Alta California. (p. 2)

6. The structural pest control report a. consists of four parts. b. requires an inspection to only determine live infestation. c. includes a Section I and a Section II. d. is regulated by the U.S. Department of Agriculture

c Structural pest control reports include Section I and II. (p. 150)

4. The CLTA standard title policy is a. seldom issued. b. the least policy issued. c. the most frequently type of policy issued. d. none of these

c The CLTA standard policy is the most frequently used. (p. 98)

9. The Preliminary Change of Ownership Report a. provides the assessor with information necessary to value the property for tax purposes. b. assists in determining whether the transfer of property might be eli-gible for one of the many change in ownership exclusions that would avoid the need to reassess the property. c. both a and b. d. neither a nor b.

c The Preliminary Change of Ownership Report (PCOR) gives the assessor information to value property and to determine if transfer eliminates the need to reassess the property. (p. 280)

2. Allocation of costs between the buyer and the seller customarily include the a. buyer paying for the documentary transfer tax. b. buyer paying for notarizing the grant deed. c. seller in Southern California paying for the owner's title insurance policy. d. buyer paying for the seller's reconveyance fee.

c The Southern California allocation of costs usually has the seller paying for the owner's title policy. (p. 224)

8. The U.S. rectangular survey system, which has been conducted throughout the United States and through the public land survey system, a. is the basis for the creation of townships and sections. b. established 42 initial beginning points. c. is both a and b. d. is neither a nor b.

c The U.S. rectangular survey system is the basis for the creation of townships and sections and established 42 initial beginning points. (p. 427)

7. Unless indicated otherwise, the contingency removal period indicated in the CAR Purchase Agreement and Joint Escrow Instructions is a. 10 days. b. 14 days. c. 17 days. d. not specified, except as indicated by the parties in a separate agreement.

c The contingency removal term in a CAR contract is 17 days. (p. 212)

6. The deed in lieu of foreclosure a. does not immediately release the borrower from most of the debt. b. requires a court filing and public disclosure. c. requires the indebtedness to be secured by the real estate transferred. d. is likely to impact the borrower's credit as severely as a foreclosure.

c The deed in lieu of foreclosure requires the indebtedness to be secured by the real estate transferred. (p. 443)

6. The document to be recorded as constructive notice for the security instru-ment for personal property involved in a bulk sales transaction is the a. deed of trust. b. financial statement. c. California UCC-1. d. security statement

c The document to be recorded as constructive notice for a security instrument for personal property is the California UCC-1. (p. 401)

8. Documentary transfer taxes are based on a. $1.55 per $1,000 of the purchase price. b. $1.10 per $500 of the purchase price. c. $0.55 per $500 of the cash paid and new loans obtained by the buyer. d. 1.25% of the sales price.

c The documentary transfer tax is based on $0.55 per $500 of the cash and new loans obtained by the buyer. (p. 301)

3. The largest and BEST known investor in the secondary mortgage market is a. FHA. b. HUD. c. Fannie Mae. d. the VA.

c The largest investor in the secondary mortgage market is Fannie Mae. (p. 329)

3. The apartment lender determines the maximum loan amount based on its cash flow requirement using a factor called a. debt ratio (DR). b. debt-to-income ratio (DTIR). c. debt service coverage ratio (DSCR). d. debt servicing ration (DSR).

c The lender's cash flow requirement factor is debt service coverage ratio (DSCR). (p. 378)

5. The penalty for anyone who violates any provision of RESPA is a a. $5,000 fine for each violation. b. $10,000 fine or not more than one year in prison for each violation. c. $10,000 fine and/or not more than one year in prison for each violation. d. cease and desist order to discontinue the practice

c The penalty for violation of RESPA is a $10,000 fine or not more than one year in prison, or both. (p. 365)

10. The primary regulator for lending on residential housing in the United States is the a. Department of Urban Development. b. Department of Housing. c. Department of Housing and Urban Development. d. Department of Housing and Lending.

c The primary regulator for residential lending is the Department of Housing and Urban Development (HUD). (p. 163)

2. The title insurer reimburses the property owner for covered losses up to a. $1,000,000. b. the face amount of the insurance. c. the face amount of the insurance plus legal expenses. d. the face amount of the insurance less the deductible.

c The title insurer reimburses the property owner for covered losses up to the face amount of insurance plus legal expenses. (p. 79

8. With a deed of trust, the lender begins the foreclosure process by instruct-ing the trustee to file and record a notice of default in the county where the property is located and to mail a copy to all borrowers and to those who have requested such notice within a. 30 business days after recording. b. 20 business days after recording. c. 10 business days after recording. d. 5 business days after recording.

c The trustee, after filing the NOD, must mail a copy to the borrower and all others who requested such a notice, within 10 days after recording it. (p. 445)

10. Title policies are written on the basis of a search of public records and other records that impart a. confirmation. b. constructive confirmation. c. constructive notice. d. confirmation notice.

c Title policies are written on the basis of public records that impart constructive notice. (p. 90)

2. Characteristics of true easements include which of the following? a. They may be created by oral agreements. b. They must always be created by a deed or grant. c. They must be created by the owner of the servient estate. d. They must be created by the owner of the dominant estate.

c True easements must be created by the owner of the servient estate. (p. 417)

8. The escrow holder must retain general escrow instructions under the law for a. one year. b. three years. c. five years. d. seven years.

c Under the law, the escrow holder must retain general escrow instructions for five years. (p. 275)

9. FIRPTA stands for a. Foreign Investor Real Property Tax Act. b. Foreign Income Real Property Tax Act. c. Foreign Investment of Real Property Tax Act. d. Federal Investment Real Property Tax Act.

c YSP is the yield spread premium paid to broker. (p. 225).

7. The additional coverage offered by an ALTA policy includes which of the following? a. Matters disclosed by a physical inspection of the premises not previ-ously disclosed by public record b. Matters disclosed by inquiry of the occupants of the property, which might disclose off-record matters c. Matters disclosed by a current survey d. All of these

d ALTA policies cover matters disclosed by physical inspection, inquiries of the occupants, or by a recent survey. (p. 121)

3. Conditions that would NOT be covered under an ALTA policy include a. defects such as liens created by the insured. b. defects known to the insured but not specified in writing to the underwriter. c. defects, but no loss or damage is suffered by the insured. d. all of these.

d An ALTA policy will not cover liens created by the insured, known to the insured and not specified in writing or no loss incurred by the insured. (p. 124)

4. An apartment LTV may be reduced by a. property age, condition, or construction. b. capitalization rate lower than the average. c. unit mix. d. all of thes

d An apartment LTV may be reduced by property age, condition, construction, cap rate, or unit mix. (p. 378)

2. The general qualifications for obtaining a California real estate license state that a. an individual must be 18 years of age or older. b. an individual must reside in California. c. an individual convicted of a crime may be denied a license. d. both a and c.

d An applicant for a California real estate license must be 18 or older and cannot have been convicted of a crime. (p. 177)

4. An easement by condemnation is a. considered an easement in gross. b. created under the power of eminent domain. c. has no dominant estate. d. all of these.

d An easement by condemnation is considered an easement in gross, has no dominant estate, and is created under the power of eminent domain. (p. 418)

2. Background checks are required of all independent escrow company person-nel EXCEPT a. stockholders. b. managers. c. employees. d. real estate agents

d Background checks are required of all escrow company personnel with no exceptions. (p. 56)

7. The borrower obtaining an FHA loan cannot pay a. the lender's closing costs, such as processing and underwriting. b. the escrow and title insurance. c. discount points to obtain a lower interest rate. d. the tax service

d Borrowers of FHA loans cannot pay for the tax service. (p. 338)

6. Conditions that would NOT be covered under the CLTA policy include a. defects such as liens created by the insured. b. defects known to the insured but not specified in writing to the underwriter. c. defects, but no loss or damage is suffered by the insured. d. all of these.

d CLTA policies will not cover liens created by the insured, known to the insured but not specified to the underwriter or with no damage. (p. 101)

6. Escrow agents may resolve disputes as impartial arbitrators a. always. b. if the escrow officer manager allows. c. if the escrow has the CSEO professional designation. d. never.

d Escrow agents may never resolve disputes as impartial arbitrators. (p. 65)

7. Escrow companies, other than broker-owned companies, are regulated by the a. Bureau of Real Estate. b.Department of Justice. c. Department of State. d. Department of Corporations.

d Escrow companies, except broker-owned, are regulated by the Department of Corporations. (p. 62)

8. Grant deed forms include a. joint tenancy grant deeds. b. community property with no right of survivorship. c. interspousal grant deeds. d. both a and c.

d Grant deed forms include joint tenancy grant deeds and interspousal grant deeds. (p. 22)

6. Information required for the escrow officer to adequately prepare a complete and accurate escrow instruction include, among other things, a. the sales price. b. new loans to be obtained and loans which will remain. c. loans to be paid off. d. all of these.

d Information for a complete and accurate escrow includes sales price and loans to be obtained, paid, or remain. (p. 211)

2. Information that may be necessary for the title officer to issue a preliminary title report might include a. a complete legal description of the property. b. current parties on title. c. prospective parties on title. d. all of these.

d Issuing a preliminary title report requires the property's legal description and current and prospective parties on title. (p. 247)

3. The primary benefit of MERS to the escrow holder is that a. it allows for more rapid loan payoff. b. it eliminates closing delays. c. it eliminates the question as to who owns or services the loan. d. all of these.

d MERS aids lenders with more rapid loan payoff, eliminates closing delays, and indicates who owns or services loan. (p. 265)

6. RESPA provisions apply to lenders a. making more than $100,000 per year in real estate loans. b. regulated by the Federal Reserve Bank. c. regulated by the VA or HUD agencies. d. all these.

d RESPA applies to lenders making over $100,000 a year in real estate loans, those regulated by the Federal Reserve, and those regulated by VA or HUD. (p. 365)

5. Reserves of regulated lenders are required in a specified percentage of the outstanding loan balance of a. performing loans. b. nonperforming loans. c. REO properties. d. all of these.

d Regulated lenders are required to hold reserves in a specified percentage of the outstand-ing loan balance for both performing and nonperforming loans, as well as REO properties. (p. 442)

9. The buyers' hazard insurance standard coverage will include a. earthquake insurance. b. flood insurance. c. both a and b. d. neither a nor b.

d Standard hazard insurance doesn't cover floods or earthquakes. (p. 213)

7. Under the federal truth-in-lending (TIL) disclosure laws, if a borrower's interest rate increases by 0.125% or greater than first disclosed before the close of escrow, a. a new TIL is sent to the borrower and escrow may not close for seven days. b. escrow may not close until the borrower receives a new TIL. c. escrow may close regardless. d. escrow may not close for three days after receipt of the new TIL.

d TIL law requires that escrow not close for three days if the borrower's loan rate increases 0.125% or more than the amount first disclosed. (p. 272)

1. Escrow instructions begin with the basic information of the escrow, including a. legal description of the property. b. street address of the property. c. vesting and title. d. all of these

d The basic information in the escrow instructions includes legal description, street address, vesting, and title. (p. 222)