Chp13-16

What helps lenders reduce the risk on a conventional mortgage loan with a high LTV? a. Private mortgage insurance b. Flood insurance c. Sale-and-leaseback arrangement d. Home equity

a. Private mortgage insurance

Regulation Z generally applies to a. a credit transaction secured by a residence. b. business loans. c. commercial loans. d. agricultural loans of more than $25,000.

a. a credit transaction secured by a residence.

The VA-approved property appraisal is stated in the a. certificate of reasonable value. b. broker's price opinion. c. certificate of eligibility. d. guarantee certificate.

a. certificate of reasonable value.

The primary mortgage market lenders that have most recently branched out into making mortgage loans are a. credit unions. b. endowment funds. c. insurance companies. d. savings associations.

a. credit unions.

A buyer is purchasing a fully furnished condominium unit. In this situation, the buyer would be MOST likely to use a a. package loan. b. blanket loan. c. wraparound loan. d. buydown.

a. package loan

A package loan includes a. real and personal property. b. private mortgage insurance. c. multiple parcels or lots. d. cash for the construction of improvement on real estate.

a. real and personal property.

A house sold for $240,000 and thee buyer obtained a loan for $220,000. If the lender charges three points, how much will the buyer pay in points? a. $5,335 b. $6,600 c. $6,950 d. $7,540

b. $6,600

To qualify for most conventional loans, the borrower's monthly housing expenses and total other monthly obligations cannot exceed what percent of the total gross monthly income? a. 28% b. 36% c. 41% d. 45%

b. 36%

Which of these makes direct loans to qualified borrowers? a. VA b. FSA c. Fannie Mae d. FHA

b. FSA

Foreclosure sales of FHA-insured homes are conducted by: a. FHA. b. HUD. c. VA. d. the lender.

b. HUD

A buyer is purchasing property from a seller who bought the property on December 20, 2012, with an FHA loan and has lived there ever since. Because of its favorable terms, the buyer would like to assume the seller's mortgage. Is this possible? a. Yes, there are no restrictions on the assumption of this mortgage. b. Yes, but the buyer will have to undergo the complete buyer qualification process. c. Yes, but the buyer will have to undergo a creditworthiness review only. d. No, this FHA loan is not assumable.

b. Yes, but the buyer will have to undergo the complete buyer qualification process.

All of these are lenders in the primary mortgage market EXCEPT a. endowment funds. b. mortgage brokers. c. insurance companies. d. credit unions.

b. mortgage brokers.

The Equal Credit Opportunity Act prohibits lenders from discriminating against credit applicants on the basis of all of these factors EXCEPT a. religion. b. past credit history. c. income from public assistance. d. marital status.

b. past credit history

A lender who collects payments, processes them, and follows up on loan delinquencies is said to a. increase the yield to the lender. b. service the loan. c. insure loan payments. d. underwrite the loans.

b. service the loan.

The Homeowner's Protection Act of 1998 (HPA) requires that the lender automatically a. lower the interest rate on a mortgage. b. terminate the private mortgage insurance payment if the borrower has accrued at least 22% equity in the home. c. provide for a home equity line of credit. d. allow for refinancing terms if requested by the borrower.

b. terminate the private mortgage insurance payment if the borrower has accrued at least 22% equity in the home.

The amount of the loan a veteran can obtain under the VA's loan guarantee program is determined by a. the VA, which set a dollar limit on the loan. b. the lender and the qualification of the buyer. c. the appraised value of the property purchased. d. loan qualification criteria established by the VA

b. the lender and the qualification of the buyer.

The asking price for a home was $585,000; the buyer offered $565,000 and the seller accepted. The appraised value of the home is $560,000. The buyer plans to pay $94,600 in cash and take out a mortgage for the remainder. What is the LTV for this property? a. 82% b. 83% c. 84% d. 85%

c. 84%

Which of these may lawfully be used as part of a loan application evaluation process? a. The applicant's religious beliefs b. The fact that the borrower is over 40 years old c. A credit score d. None of these

c. A credit score

The Federal Deposit Insurance Corporation (FDIC) does which of these? a. Administers Freddie Mac and Ginnie Mae b. Administers Freddie Mac only c. Insures deposits in participating institutions up to $250,000 per depositor, per account d. Services loans

c. Insures deposits in participating institutions up to $250,000 per depositor, per account

A veteran served for six months on active duty in Vietnam in 1967. In 1998, the veteran was killed in a skiing accident. The veteran's surviving spouse wishes to make a down payment on a condominium and wants to obtain aVA-guaranteed loan. Is the surviving spouse entitled to a VAguaranteed loan? a. Yes, the unremarried spouse of a qualified veteran is entitled to a VA-guaranteed loan. b. Yes, whether or not the surviving spouse remarries, the surviving spouse is entitled to the same VA benefits that the veteran was during the veteran's lifetime. c. No, the veteran's death was not service-related. d. No, the veteran did not meet the time-in-service criteria for qualified veterans.

c. No, the veteran's death was not service-related.

What does private mortgage insurance cover? a. Pays the lender if the borrower dies b. Reimburses the cosigner if the borrower defaults c. Protects the top 20 to 30% of the loan against borrower default d. Pays the borrower if the borrower loses the house to a title claim

c. Protects the top 20 to 30% of the loan against borrower default

A 16-year-old female applied for a conventional loan in order to purchase a condominium. The lender denied the application, citing the applicant's age as the reason for the denial. Which of these is TRUE? a. The lender violated the ECOA because the applicant is female and sex cannot be a lending consideration. b. The lender violated the ECOA because lending decisions cannot be based on age. c. The lender lawfully denied the application because the applicant was under 18 and therefore was too young to legally sign a contract. d. None of these.

c. The lender lawfully denied the application because the applicant was under 18 and therefore was too young to legally sign a contract.

One way a borrower can obtain a conventional mortgage loan with a lower down payment than 20% of the purchase price is by a. obtaining a package loan. b. obtaining a blanket loan. c. obtaining private mortgage insurance. d. obtaining permission from the FDIC

c. obtaining private mortgage insurance.

The real estate financing market is comprised of a. the primary and secondary mortgage markets. b. Fannie Mae and Ginnie Mae. c. the primary and secondary mortgage markets, plus government influences such as the Federal Reserve system. d. none of these.

c. the primary and secondary mortgage markets, plus government influences such as the Federal Reserve system.

On which type of loan can the borrower prepay without penalty? a. Loans sold to Fannie Mae and Freddie Mac b. FHA loans c. VA loans d. All of these

d. All of these

Lenders that make conventional loans to sell in the secondary mortgage market follow the standardized forms and guidelines issued by Fannie Mae and a. the FSA. b. the FHA. c. Ginnie Mae. d. Freddie Mac.

d. Freddie Mac

The Equal Credit Opportunity Act prohibits discrimination in the lending process based on a. race. b. religion. c. marital status. d. all of these.

d. all of these.

All of these are roles of the Federal Reserve System EXCEPT a. help counteract inflationary trends. b. create a favorable economic climate. c. maintain sound credit conditions. d. make direct loans to buyers.

d. make direct loans to buyers.