Finance practice exam 8

No sooner than three months

A Notice of Default has been filed to begin the non-judicial foreclosure process. How soon can the Notice of Sale be issued?

Buyer

A lender requires a title search to finance a transaction. Who pays for this search?

Yes, for Native Americans on trust lands

Does the VA make direct loans?

Returns on investments decrease

How do falling interest rates impact investors in mortgage-backed securities?

Lease with option to buy

In which situation will sellers apply a portion of the rent toward the purchase price to entice the buyers to close more quickly?

Credit report

Kelly is reviewing Steve's loan application. She wants to verify that he has a solid history of paying obligations on time. What should she request to do this?

The Loan Estimate expires in 10 business days if Kendra doesn't tell Acme Savings and Loan that she wants to move forward with it.

Kendra has applied for a loan from Acme Savings and Loan, but when she compares the Loan Estimate that loan officer gave her with the one from Best Bank, where she also applied for a loan, she decides she'd rather go with the loan from Best Bank. Which of the following is a true statement about this situation?

The "L" indicates that the creditor pays the item at consummation.

Maria is a borrower reviewing her Closing Disclosure. She notices that the appraisal fee is listed under "Paid by Others" and has an "L" listed with the amount. What does this mean?

Pay the difference between CRV and sale price in cash

Rhoda is a first-time homebuyer. She has applied for a VA loan to buy a house from Phyllis. When the CRV values the home at less than the sale price, Phyllis refuses to come down on the sale price, so Rhoda must either ______ or find a different home to buy.

Loan estimate and final amounts side-by-side

The "Calculating Cash to Close" table on page three of the Closing Disclosure explicitly lists ______.

Administrative Procedure Act

The ______ was enacted in 1946 in response to the creation of several new federal agencies.

Funding fee

The amount of the ______ a veteran must pay depends on factors, such as military status, down payment amount, and whether the veteran's entitlement is being used for the first time or a subsequent time.

Services performed by a third party that the lender selects

The section on the Loan Estimate called "Services You Cannot Shop For" includes fees for ______.

To convert the interest rate from fixed to adjustable

What's the purpose of the Fixed/Adjustable Rate Note?

Homeowner and Equity Protection Act (HOEPA)

Which of these is actually an amendment to the Truth in Lending Act (TILA)?

Joint venture

You don't qualify for financing, but are able to invest in real estate because your role as a licensee is helpful in this type of investment strategy.

Requiring full disclosure of the terms and conditions in any offers of credit

The intent of the Consumer Credit Protection Act, which includes the Truth in Lending Act, was to safeguard the consumer by ______.

Education

To qualify for a mortgage loan originator endorsement, applicants must meet examination, fingerprint, credit report, and ______ requirements.

A mobile home

Which of the following falls under the definition of 'dwelling' according to Senate Bill 36?

$349,698.87 If $1,801.23 of the $2,102.36 is interest, that leaves $301.13 for principal. Subtract $301.13 from $350,000 for a new principal balance of $349,698.87.

A buyer with a $350,000 loan has a monthly principal and interest payment of $2,102.36. If $1,801.23 is interest, what's the new principal balance after the first payment is applied?

Property taxes are usually paid with the monthly mortgage payment.

Residential property owners don't often default on property taxes. Why not?

Foreclosure by advertisement

Robbie's lender notifies him of an impending foreclosure, and is told that his property will be sold at public auction. After the auction occurs, Robbie receives a notice of eviction for which the lender had to petition a court. What does this describe?

$608,292.40 First, multiply the monthly payment by the total number of payments. Then subtract the original loan value: $3,078.59 x 360 = $1,108,292.40 ‒ $500,000 = $608,292.40.

A borrower has a 30-year, $500,000 loan with an interest rate of 6.25%. His monthly principal and interest payment is $3,078.59. What's the total amount of interest he'll pay over the course of the loan?

$854.17 $205,000 x 0.05 = $10,250 ÷ 12 = $854.17.

A buyer obtained a 30-year, $205,000 loan with a 5.0% interest rate. How much of the monthly payment is interest?

From the sale of Farm Credit System debt securities

Randall needs some new equipment for his ranching operation, and he needs a loan to purchase the equipment. When he approaches his local bank and applies for a Farm Credit System loan, how is the loan funded?

$186.42 Add annual taxes and insurance ($1,295 + $942 = $2,237), and divide this total by 12 to calculate the monthly taxes and insurance payment.

Sophia's annual property taxes are $1,295, and her annual insurance premium is $942. How much of her monthly mortgage payment goes toward taxes and insurance?

Place lender-acquired insurance on the property and bill the borrower

Which of the following can a lender do if a borrower fails to keep homeowners insurance on the collateral property?

A conventional fixed-rate mortgage issued by a commercial bank

Which of the following is Fannie Mae most likely to purchase?

Limited partnership

Which of the following is a passive type of real estate investment?

Population size

Which of the following is a piece of general data an appraiser may gather?

Borrowers who qualify for conventional financing typically won't get an FHA loan.

Which of the following is a true statement about FHA financing?

The seller and buyer each receive a copy of the closing disclosure.

Which of the following is a true statement regarding lender disclosures and other closing disclosures?

Application for a loan

Which of the following is an example of an inquiry a consumer initiated that may appear on a credit report?

They're allowed only on fixed rate loans.

Which of the following statements is true about buydowns with a VA loan?