Finance Quizes

According to RESPA, what must lenders give to the borrower in the days immediately prior to settlement? A) closing disclosure B) Freddie Mac borrower disclosure C) loan estimate D) TIL statement

A) closing disclosure Lenders must give the borrower the closing disclosure three days prior to settlement.

In a loan to purchase which of the following property types is NOT eligible for purchase by Fannie Mae? A) commercial space B) multi-unit residential investment property C) second home D) single-family primary residence

A) commercial space Fannie Mae generally focuses on loans used to purchase or refinance a residential property.

Private loan companies may place a ________ on the property for which the loan is being taken. A) lien B) lock C) moratorium D) secondary loan

A) lien If the underlying property is being used as collateral to secure, the loan, a lien may be placed against the property.

How do mortgage lenders acquire income? A) loan interest and mortgage packages sold on the secondary market B) loan, interest, and refinancing C) loan refinancing D) mortgage packaging to the secondary market

A) loan interest and mortgage packages sold on the secondary market Mortgage lender income is generated from loan, interest and mortgage packaging on the secondary market.

Iris is planning to purchase her first home. Based on what you know about the nature of real estate finance in our country, which approach is she most likely to use? A) obtaining a loan to purchase the home B) paying cash for the purchase C) receiving the property as a gift from the state D) squatting in the home until legal possession of the home can be claimed

A) obtaining a loan to purchase the home Credit makes our world go round. Many customers make large purchases, such as homes or automobiles, by leveraging credit (in the form of loans). They take ownership of the item immediately and pay it off overtime.

In which type of partnership does each mortgagee receive a share of the mortgage payment? A) partnership among mortgagees B) partnership among mortgagors C) partnership between developers D) partnership between mortgagees and mortgagors

A) partnership among mortgagees

In what phase of the real estate cycle do foreclosures increase and home prices fall? A) expansion B) over-supply C) recession D) recovery

C) recession Remember, the real estate process is cyclical and each phase has a unique impact on the market.

Maggie has a neighbor, Jim, who is facing foreclosure. She likes Jim and wants to help him out, so they agree to do a "subject to" purchase. What does this mean? A) Maggie will cosign a second mortgage with Jim, so that he'll have the funds to pay off the first mortgage B) Maggie will purchase the home at the foreclosure, auction, and rent it to Jim at a reduced rate C) Maggie will sign an agreement with the lender to assume liability for Jim's loan D) Maggie will take over Jim's loan payments

D) Maggie will take over Jim's loan payments without telling his lender she's doing so When the new buyer makes the payments on a loan, as if nothing has changed, this is called a "subject to" purchase.

Brittany is selling her bungalow via an installment contract. The buyer made payments dutifully for five years, but has not made any payments for more than a year. Which of the following is true? A) Brittany can keep all of the proceeds received and repossessed the property B) Brittany must petition the court to receive title to the property C) Brittany must return the proceeds received, but she can repossess the property D) the buyer can sell the property for a profit

A) Brittany can keep all of the proceeds received and repossessed the property Unlike a traditional mortgage, the buyer doesn't have ownership until the property is completely paid off. Brittany can keep all the proceeds and repossess the property.

Conventional loans from large commercial banks are the primary target for which secondary market player? A) Fannie Mae B) FHLB C) Freddie Mac D) Ginnie Mae

A) Fannie Mae Fannie Mae buys conventional loans, mainly from large commercial banks.

Which of the following clauses is included in Fannie Mae's multi-state note? A) Late charge B) Lock-in C) Prepayment penalty D) subordination

A) Late charge The note contains a description of when a late charge is payable.

In a deed of trust, who is the trustee? A) a neutral third-party B) the agent C) the borrower D) the lender

A) a neutral third-party The trustee is the one who holds the trust on behalf of the beneficiary (the lender).

The ________ section contains the sellers existing mortgage loan payoff amount that must be paid to complete the transaction. A) " Due from Borrower at Closing" B) "Due from Seller at Closing" C) "Due to Seller at Closing " D) "Paid Already by or on Behalf of Borrower at Closing "

B) "Due from Seller at Closing"

Fannie Mae, Freddie Mac, and the Federal Home Loan Bank are regulated by the _________. A) Federal Banking Institute B) Federal Housing Finance Agency C) Federal Reserve D) U S Congress

B) Federal Housing Finance Agency GSE's are regulated by the Federal Housing Finance Agency, or the FHFA.

What do loans create for banks and other financiers? A) fewer jobs B) future cash income C) guaranteed income D) loss of cash cash flow

B) future cash income When the principal and interest are returned in monthly payments, there is an increase in regular cash flow.

Fred and Wilma are listing their home for sale with Carl, a licensee. They tell Carl that they're not interested in selling to people who won't "fit in with the neighborhood." Carl advises them about ________ that are developed and enforced within HUD. A) community development block grant options for local suitable buyers B) housing discrimination laws C) the "my neighborhood, not yours" buyer requirement lists D) the "this land is my land" program

B) housing discrimination laws Licensees should be aware of and follow federal laws to prevent discrimination in housing that are developed and enforced through HUD's Office of Fair Housing and Equal Opportunity.

The Wilsons are selling their home and have asked that an appraiser they know perform the appraisal on the property. Sidney, the buyer's agent, is surprised when the appraised value comes in considerably higher than the competitive market analysis she prepared. Sidney is concerned that this might be an example of which type of mortgage fraud scheme? A) Equity skimming B) False identity C) Inflated appraisal D) Straw buyers

C) Inflated appraisal

Which entity provides disclosures and public information about the financial condition of FCS? A) Farm Credit Administration B) Farm Services of America C) Farm Credit System Insurance Corporation D) Federal Farm Credit Banks Funding Corporation

D) Federal Farm Credit Banks Funding Corporation

Which act requires that individuals making more than five "owner-financed" loans per year, obtain a residential mortgage loan origination license? A) The Texas Mortgage Loan Originator Act B) The Texas Owner Finance Act C) The Texas Real Estate Licensing Act D) The Texas SAFE Act

D) The Texas SAFE Act The Texas SAFE Act was the states response to the federal SAFE Act and established licensing requirements and penalties for violators.

The __________ requires specific disclosure and was an acted in 1968 as part of the Customer Credit Protection Act. A) American Recovery and Reinvestment Act B) Federal Equal Credit Opportunity Act C) Real Estate Settlement Procedures Act D) Truth in Lending Act

D) Truth in Lending Act The Truth and Lending Act (TILA) was an acted in 1968 and requires lenders to disclose financing terms to customers in a manner that's not misleading or deceitful.

What does the concept "first in time" refer to when discussing lien priority? A) first mortgages are paid over property taxes B) first mortgages are paid overtime C) Junior lien holders, will not be paid D) liens are paid based on date of filing

D) liens are paid based on date of filing "First in time" means that a lien that was filed earlier than another lien will be paid first. However, property tax liens, always take priority.

Lee manages a rental property for her client, and is accepting applications from tenants. Applicants Damien and Maria are young, newly married, and have a baby on the way. They can't afford a typical rent on a clean, well-maintained two-bedroom home such as the one that Lee has available; but if they are recipients of the ________, which Lee knows the property would also qualify for. Lee is glad to accept them as tenants.

Housing Choice Voucher program HUD's Housing Choice Voucher program helps low-income tenants with rental assistance that is paid directly to the landlord

Who is responsible for paying the underwriting fee in a financed real estate transaction? A) borrower B) lender C) seller D) title company

A) borrower

The secondary mortgage market buys loans from the primary market. How does this aid the lending market? A) avoid foreclosure for borrower properties B) ensure funds are available to borrowers C) prevent bank runs by consumers D) streamline lenders' bankruptcy processes

B) ensure funds are available to borrowers By purchasing mortgages, secondary mortgage market players provide money to primary lenders so they can continue to offer loans to consumers.

How does the VA qualify a property for a VA-guaranteed loan? A) through a database showing median home values in the area B) through a VA approved appraiser C) through a VA approved inspector D) through tax assessed value

B) through a VA approved appraiser

How can a foreclosure be stopped or prevented? A) auction B) fleeing the state C) paying all outstanding liens against the property D) refinancing

C) paying all outstanding liens against the property

An appraiser is determining the insured value of a property. What is being evaluated? A) The cost to replace or rebuild a property B) the fees the lender will pay if the building is replaced or rebuilt C) the price at which the property can be loaned on or sold at a foreclosure sale D) the return on investment the property may provide

A) The cost to replace or rebuild a property

How is interest defined as it's related to a mortgage loan payment? A) a fee paid to lenders for the use of their money B) a fee to keep other borrowers from taking interest in your property and buying it out from under you C) extra money, paid to cover any unexpected bank fees D) random charges

A) a fee paid to lenders for the use of their money

Which of the following may a lender request to verify an applicant's bank deposit information? A) account statement B) debit card C) loan application D) paystub

A) account statement

Payment history, credit usage, inquiries and types of accounts are factors considered in calculating a credit score. Which of the following options is also a factor? A) age of accounts B) income C) marital status D) race

A) age of accounts

Which of the following best describes a recourse mortgage? A) allows the lender to sue the borrower for damages if foreclosure occurs B) gives the borrower a recourse for exiting the loan when financial difficulties occur C) prohibits the borrower from suing the lender for mortgage fraud D) prohibits the lender from suing the borrower for damages if foreclosure occurs

A) allows the lender to sue the borrower for damages if foreclosure occurs If selling the property after foreclosure didn't result in enough profit to cover the outstanding debt on the original loan, the lender has recourse to collect the outstanding debt.

__________ is a legal action that liquidates or restructures debts. It can have a long lasting negative impact on the borrowers ability to obtain financing. A) bankruptcy B) foreclosure C) judgment lien D) tax sale

A) bankruptcy There are two types of bankruptcy. One restructures debt; the other liquidates assets.

A borrowers property was foreclosed, and they face a deficiency judgment, so the lender can recover losses incurred from the foreclosure process. What type of lien may the lender levy against the borrower until the losses are paid? A) blanket lien B) foreclosure lien C) mortgage lien D) tax lien

A) blanket lien A blanket lean may be placed on the borrowers property until the lender can recover all losses, resulting from the foreclosure process.

Licensees should deposit commission checks into their ___________. A) business checking account B) commission savings account C) emergency fund account D) personal checking account

A) business checking account

Who is responsible for paying the loan-related closing costs in a financed real estate transaction? A) buyer B) lender C) seller D) title company

A) buyer Loan-related closing costs are insured by the buyer before, during, and after closing. These include fees for things like loan, origination, loan, application, underwriting, appraisal, credit report, title, search, and title insurance.

In an amortized loan, the interest portion of the mortgage payment generally ______ over the life of the loan. A) decreases B) has no bearing on the total C) increases D) remains the same

A) decreases The interest portion of the payment generally decreases over the life of the mortgage loan as the principal portion increases.

The Federal Housing Finance Agency established percentage targets and ________ for loans made to low- to moderate-income borrowers. A) limits for conforming loans B) loan origination fees C) Mortgage interest rates D) usury allowances

A) limits for conforming loans The Federal Housing Finance Agency sets limits for conforming loans.

Your client, Yolanda, is a nurse. Does she qualify for the Good Neighbor Program? A) not unless she is also an EMT B) not unless she plans to live in the home C) yes, because she is a nurse D) yes, if her income level meets the requirements

A) not unless she is also an EMT

The upfront MIP on an FHA loan is calculated on ______. A) the base loan amount B) the base loan amount divided by 12 C) the properties appraisal price D) the properties purchase price

A) the base loan amount The upfront MIP is calculated on the base loan amount.

A homeowner's monthly mortgage payment is $580.23. If the taxes are $83.33 and the insurance is $41.66, how much of the monthly payment is principal plus interest? A) $454.34 B) $455.24 C) $465.24 D) $466.34

B) $455.24 Subtract the taxes and insurance from the monthly payment to get the amount for principal plus interest.

Homeowners over the age of ______ are eligible for the HECM program. A) 55 B) 62 C) 71 D) 80

B) 62

Lydia put the minimum 3.5% down on her $210,000 home. She'll have to pay an MIP. What type of loan does Lydia have? A) conventional B) FHA C) standard D) VA

B) FHA

What business structure protects independent contractors personal assets if sued by a client? A) General Partnership B) LLC C) Off-shore company D) Sole proprietorship

B) LLC Licensees typically start as sole proprietors; many from LLC's to protect personal assets.

Which of the following would be a receipt you should save for tax purposes? A) a ticket for a sporting event B) a toll fee for a business trip C) Breakfast out with your football buddy D) entry fee to a museum

B) a toll fee for a business trip

Completing a residential loan application requires providing information about the loan being requested, the property being purchased, and the ________. A) appraisal value of the property B) borrower purchasing the property C) lender providing the loan D) seller of the property

B) borrower purchasing the property Completing a residential loan application, requires providing information about the type of loan being requested, the borrower, the property they're seeking to purchase.

Which of the following loans may require compliance with Appraiser Independence Requirements? A) commercial B) conventional C) FHA D) VA

B) conventional AIR may apply to conventional loans used to purchase a single-family dwelling of one to four units.

In a 1031 tax-deferred exchange, what role does the qualified intermediary serve? A) acts as trustee B) coordinates the exchange C) insures the replacement property D) records the deed

B) coordinates the exchange The qualified intermediary conducts and coordinates the exchange, including filing IRS paperwork.

What is it called when a homeowner, rather than be foreclosed on, turns their deed over to the bank? A) bankruptcy B) deed in lieu C) judgment lien D) short sale

B) deed in lieu A deed in lieu of foreclosure is also called a voluntary conveyance.

Which account in licensee's personal finance system is specifically designed to assist in paying bills during a recovery period or when unable to work at the regular pace due to an accident? A) business checking account B) emergency fund account C) income tax account D) retirement account

B) emergency fund account The emergency account is there to help when there are financial emergencies so that you do not build dead when unexpected expenses occur.

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. A) entitlement fee B) funding fee C) guarantee fee D) mortgage insurance premium

B) funding fee

Which of the following best describes a blanket lien? A) it allows the lender to place a lien against all current and future personal tax refunds of the borrower who defaulted B) it gives lenders the ability to recover losses due to a foreclosure sale from any current or future property. The borrower owns. C) It gives the lender the ability to place leans against any property it chooses, including cars and boats D) it shelters the borrower's future properties from bankruptcy to protect the

B) it gives lenders the ability to recover losses due to a foreclosure sale from any current or future property. The borrower owns

What makes the 203 (b) loan a likely option for borrowers who don't qualify for a mortgage due to low credit scores? A) Borrowers can skip a certain number of pay payments without penalty B) it has less stringent qualifying requirements than a conventional loan C) it is an interest-only loan D) lenders don't review credit history or scores for this loan

B) it has less stringent qualifying requirements than a conventional loan

Why should licenses maintain a business account separately from any personal accounts? A) A business bank account identifies you as a sole proprietor B) it makes it easier to recognize when the business is profitable C) it's a requirement of being an independent contractor D) it's a requirement of licensure

B) it makes it easier to recognize when the business is profitable

When using a financial system, what activities should you complete on a weekly basis? A) adjust budgeted percentages B) record purchases and file receipts C) Review financial goals D) talk with your tax professional

B) record purchases and file receipts When each savings goal has its own account that gets funded from every check you earn, you will see regular progress towards your goals.

The average commission you earn from each transaction is $6000, and 20% of your leads turn into clients. Using the funnel, what else do you need to know to calculate how many leads you will need if you want to earn $50,000 in a year? A) the number of homes you list B) the percentage of clients who turn into closed transactions C) the percentage of homes that sell below listing price D) the percentage of your commission

B) the percentage of clients who turn into closed transactions The funnel uses a few different percentages to help you estimate the activity you need to create a certain income, and one of those is the percentage of clients who turn into closed transactions.

Consumers in the _______ range have an above-average credit score. They tend to qualify for better interest rates than those in the "acceptable" category. A) 649 - 699 B) 700 - 739 C) 740 - 799 D) 800+

C) 740 - 799

Your client, Shelby, a veteran using a VA loan to finance her purchase, just learned that the CRV came in lower than the sales price. But no problem: Shelby's brother is willing to loan her the difference. If the loan is approved, ______. A) no interest may be paid on the loan B) Shelby has committed mortgage fraud C) Shelby must still be under the VA debt-to-income ratio D) the loan must be for less than $5000

C) Shelby must still be under the VA debt-to-income ratio Any windfalls will be scrutinized by the VA. Gifts are no problem, but loans will be evaluated in terms of how they impact the borrowers debt-to-income ratio.

When a buyer obtains an FHA loan, the seller may ______. A) contribute to the buyers down payment B) contribute up to 10% of the sales price (or appraisal, if that's lower) to the buyers closing costs C) contribute up to 6% of the sales price (or appraisal, if that's lower) to the buyers closing costs D) Pay 7% of the buyers total closing costs, not including down payment

C) contribute up to 6% of the sales price (or appraisal, if that's lower) to the buyers closing costs

A second mortgage on property secured by a VA loan is acceptable under certain conditions, one of which is the first and second mortgage liens ___________. A) are from the same lender B) are within VA guarantee limits C) don't exceed the CRV D) don't exceed the original loan value

C) don't exceed the CRV

Through the Good Neighbor Next Door program, and the agreement to live on the property for three years, a teacher can buy a foreclosed FHA-insured property ___________. A) for $100 B) for a 10% discount off list price C) for a 50% discount off list price and a down payment of only $100 D) with an interest-only loan and no down payment

C) for a 50% discount off list price and a down payment of only $100 The Good Neighbor Next Door program offers specific FHA foreclosed properties to law enforcement officers, K-12 teachers, firefighters, and EMTs for a 50% discount and only $100 down.

Mortgage, homeowners, and flood ______ may be included the mortgage payment. A) addenda B) fees C) insurance D) waivers

C) insurance

Your client has a VA loan and wants to refinance to a lower rate. Which of the following is likely the simplest option? A) cash out refinance program B) convert to conventional to avoid the MIP C) interest rate reduction refinance D) obtain an adjustable rate mortgage with a low teaser rate

C) interest rate reduction refinance

Which of the following is a legitimate business deduction that you, as a real estate licensee, could claim on your income tax return? A) a trip to attend your cousins wedding (air fare, rental car, food and gas) B) business cards, and stationary given to you by your brokerage C) lunch with your mom to discuss the sale of her townhome D) tux rental for your spouse's Christmas cruise

C) lunch with your mom to discuss the sale of her townhome

Which of these would be considered a fixed, essential expense? A) clothing B) groceries C) mortgage D) tv cable bill

C) mortgage

How can liens, such as those created by non-payment of federal income tax, result in mortgage default? A) banks are government-owned, so a lien on unpaid taxes is equal to a mortgage default B) federal income taxes are part of the mortgage payment C) new liens can threaten the lenders position as primary lienholder. Default can occur for this reason. D) The IRS requires the bank to cover the overdue amount

C) new liens can threaten the lenders position as primary lienholder. Default can occur for this reason Additional liens on property can threaten the lenders position as primary lienholder on the property lenders want to remain the primary lien holders to be paid first in the event of a foreclosure sale.

Which appraisal approach will likely weigh most heavily during the reconciliation step when appraising a single-family residence? A) cost B) income C) sales comparison D) substitution

C) sales comparison The sales comparison approach is most commonly used for residential properties. The income approach may be best for income-producing properties (such as rentals). The cost approach is often used for unique or newly constructed properties.

A loan applicant's employer has been asked to provide employment verification. Who else must complete parts of the request for proof of employment form? A) the applicant's agent B) the appraiser C) the lender D) the seller

C) the lender When applicants sign the form, they have given the employer permission to provide information to the lender to complete the request.

Within what time frame must the Loan Estimate be provided after the buyer submits a loan application? A) five days B) four business days C) three business days D) two days, unless they fall on a federal holiday

C) three business days

What's one reason a homeowner would want to refinance their mortgage? A) to change mortgage brokers B) to change the bank that owns their loan C) to get a lower interest rate D) to increase their equity

C) to get a lower interest rate

A quitclaim deed does which one of the following? A) transfers a property with only the covenant of warranty B) transfers the property with full covenants C) transfer without warranty any interest or title the grantor has when conveying it. D) transfers with warranty any interest or title the grantor has in the property when convey it.

C) transfer without warranty any interest or title the grantor has when conveying it. A quitclaim deed provides no warranties or covenants; it only guarantees the grantor in transferring any interest or title he or she may have in the property.

Can a licensee claim an extra bedroom used as an office as a deduction? A) no, this is not an allowable deduction B) yes, she can claim 100% of the expenses to operate her home C) yes, she can claim a deduction based on the amount of her home used for business D) yes she can claim a standard home office deduction of 50% of all home expenses

C) yes, she can claim a deduction based on the amount of her home used for business The IRS has a variety of rules related to home business deductions, so check with a tax professional to make sure you are complying with them if you want to take a deduction for home office.

The FHA ______ program allows a borrower to refinance an FHA loan without verifying income or assets. A) Easy-Peasy Refinance B) No Verification Refinance C) Section 251 Refinance D) Streamline Refinance

D) Streamline Refinance The program is called a streamline refinance, because no verification of income or assets is needed, although the borrower must be currently using an FHA-insured loan.

The Federal Housing Administration (FHA) is part of the ___________. A) Consumer Finance Protection Bureau B) Federal Deposit Insurance Corporation C) MLO D) U.S. Department of Housing and Urban Development

D) U.S. Department of Housing and Urban Development

Which veteran loan program offers qualified veterans help with the purchase of land in Texas? A) Texas Veterans Land Board B) Veterans Home Improvement Program C) Veterans Home Assistance Program D) Veterans Land Program

D) Veterans Land Program

Which of these is an advantage to maintaining business and personal accounts separately? A) bank usually reduce fees for clients holding multiple accounts B) each account is covered by federal insurance, so having multiple accounts increases the amount that is insured C) it allows you to make personal expenses look like business expenses D) it allows you to track business expenses for tax purposes

D) it allows you to track business expenses for tax purposes Tracking business expenses is an essential part of your success, and a dedicated business account makes this easier to do.

When an adjustable rate mortgage (ARM) makes its initial adjustment, it does so to its fully indexed rate. What makes up the fully indexed rate? A) conversion minus margin B) fixed minus index C) index plus conversion D) margin plus index

D) margin plus index The fully indexed rate is the margin plus the index

When completing a loan application, the applicant must list their assets. Which of these is considered an asset? A) car loan B) credit card balance C) mortgage D) savings account

D) savings account Assets are items of value. Liabilities are obligations or debt owed. Money available in a savings account is an example of an asset.

Marissa is obtaining a VA loan, and she's decided to place 20% down. What's her responsibility for paying the VA loan funding fee? A) she can either pay it separately, or roll it into the cost of the loan B) she's required to pay it, unless she's disabled C) she will need to place the funding fee in escrow for the first year. If she doesn't default in that time, it will be refunded to her. D) she won't be required to pay it since she made a large down payment

D) she won't be required to pay it since she made a large down payment

When a homeowner has repairs made to a home using an FHA 203 (k) loan, HUD requires __________. A) that the contractor agree to a 10% discount for all labor B) that the work be completed within one year of closing on the loan C) that the work be done by a HUD approved contractor D) that the work meet FHA, basic energy, efficiency and structural standards

D) that the work meet FHA, basic energy, efficiency and structural standards

Sylvia is shopping for a mortgage. Because she's a veteran, she compares the VA home loan with the 3.5% down FHA mortgage. If she has only $5,000 available in cash, with all else being equal, which loan will allow her to spend more on a home? A) both loans have the same features, so she could purchase at the same time with either loan B) Sylvia can't be approved for either loan with only $5000 in cash C) the FHA loan D) the VA loan

D) the VA loan

A buyer wants to purchase a farm, but the buyer's lender has discovered a cloud on the title. Who is responsible for clearing the cloud? A) the agent B) the buyer C) the lender D) the seller

D) the seller

What conditions must be met for a buyer's child support payments to be factored into the income assessment for a home loan? A) the children must be under the age of 12 B) the payments must equal at least 50% of Tina's gross income C) the payments must exceed $1000 per year D) there must be a consistent track record of payment or the payments must be the result of a court order

D) there must be a consistent track record of payment or the payments must be the result of a court order If an applicant can show consistent receipt of child, support payments, or that they are the result of a court order, the lender may consider them.

Which of the following will be issued only if title is acceptable, and an attorney provides a certificate of title opinion? A) chain of title B) deed C) survey D) title insurance policy

D) title insurance policy The title commitment comes before closing; the title insurance policy is issued after closing. The commitment says that a title company is willing to issue title insurance under certain conditions. The policy provides coverage for the property.

Carla and Sven have a previous foreclosure, but now they are a few years away from that. They make good money with their jobs, and have about $30,000 available to use for a down payment and closing costs. Why might they consider an FHA 203(b) loan, even if they have sufficient down payment for a conventional loan?

The lender can consider compensating factors, even if their credit history isn't great Lenders can consider compensating factors, such as well paying jobs, when qualifying a customer for a 203 (b) loan.

Susie has lost her job and wasn't able to make last month's mortgage payment. How is her lender most likely to help Susie stay in her home? A) agreed to modify her loan B) enroll her in a home loan forgiveness program C) foreclose on her loan D) give her a job at its bank

A) agreed to modify her loan

Which type of support does the USDA Rural Development Program offer to its target audience of rural residents? A) it offers, direct loans, grants, and loan guarantees for housing, and other rule needs, as well as advisor services to agricultural producers B) it oversees community development efforts in rule areas and advises Congress on financial policies that affect rural Americans C) it provides access to educational services and help for job seekers who live in rural areas

A) it offers, direct loans, grants, and loan guarantees for housing, and other rule needs, as well as advisor services to agricultural producers

Ava is borrowing money to buy some commercial property for her business. The loan agreement she signs includes a lock-in clause. What does that mean? A) Ava must use the same lender for all new loans she needs B) Ava will not be allowed to pre-pay the loan prior to the date specific in the loan agreement C) the lender has the right to prohibit certain ways of using the property used as collateral for the loan D) the lender is not allowed to transfer the loan without Ava's permission

B) Ava will not be allowed to pre-pay the loan prior to the date specific in the loan agreement The lock-in clause is a form of prepayment penalty typically used only for high yield loans.

Synergy National Bank issued a conventional loan that is eligible for purchase by Fannie Mae. When Fannie Mae purchases the loan, what will Synergy National Bank receive in return? A) brokerage fee B) collection fee C) origination fee D) points

B) collection fee Fannie Mae pays a collection fee, which can be a significant source of income for loan originators.

Historically, what do property values tend to do over long periods of time? A) decrease B) historically property values have not followed a consistent pattern C) increase D) remain the same

C) increase Over a long period of time, the value is likely to increase.

To be eligible for a _______, an applicant must have participated in a farm or ranch management for at least three years. A) Farm Credit System Loan B) Farmer Mac direct loan C) Federal Beginning Farmer Grant D) USDA loan through the Farm Service Agency

D) USDA loan through the Farm Service Agency

Which person or entity works with many different lenders to find the best loan for the customer? A) commercial bank B) credit union C) mortgage banker D) mortgage broker

D) mortgage broker Mortgage brokers work with many different lenders to find the best loan. They don't originate their own loans.

What's the most common way that a seller can help a buyer come up with the funds to complete a real estate transaction? A) co-ownership B) equity financing C) remaining in the home and renting from the new buyer D) with a contract for deed

D) with a contract for deed A contract for deed is a common form of seller financing.

When HUD pursues, actions that are designed to reduce housing discrimination, and help communities recover from disaster, which of its goals is it supporting? A) build strong, resilient and inclusive communities B) meet the needs for quality luxury homes C) strengthen the housing market to prevent another economic collapse D) utilize housing as a platform for improving health

A) build strong, resilient and inclusive communities These are actions designed to support HUD's goal to build, inclusive and sustainable communities free from discrimination.

Robert is a rancher. He was told about the USDA Farm Service Agency offerings. What can he use an approved loan for? A) building a new hay barn B) paying for his kids college tuition C) paying his ranch staff D) starting a construction side business

A) building a new hay barn Direct farm ownership loans are restricted to the land and improvements made to farm and ranches.

During which phase of the real estate cycle does a real estate professional have the most direct impact? A) buying/selling B) construction C) living D) planning

A) buying/selling The real estate professional is involved in the buying/selling phase of the real estate cycle.

Stephanie was having trouble making her mortgage payments. Now her payments are lower than they were, and she's able to pay them each month. This is because her lender ______. A) give her a loan modification B) is preparing to foreclose and doesn't care if her loan is in default C) is supplementing her payments with a grant fund D) told her to pay whatever she could afford

A) give her a loan modification Loan modifications can make a homeowners monthly payments more affordable.

The _________uses education, enforcement, and research to promote fairness and transparency for customer financial services. A) Consumer Credit Protection Act B) Consumer Financial Protection Bureau C) Department of Housing and Urban Development D) Equal Credit Opportunity Act

B) Consumer Financial Protection Bureau

Which project would a life insurance company be most likely to finance? A) a room addition on an existing home B) a shopping mall C) a small church building D) new home construction

B) a shopping mall Life insurance companies prefer large commercial projects, such as shopping malls.

What are the types of institutions that issue loans directly to consumers commonly called? A) government-sponsored enterprises B) primary market players C) real estate brokerages D) secondary market players

B) primary market players Banks, credit unions, thrift, and other institutions, that issue loans directly to consumers our primary market players.

When a borrower has paid off the loan, how is the release handled if the security instrument is a mortgage? A) the lender, execute and records, a deed of reconveyance, and returns the note to the borrower B) the lender, executes and records, a satisfaction of mortgage, and returns the note to the borrower C) the lender files for a release of lien and returns the note to the borrower D) the lender returns the note and mortgage to the borrower

B) the lender, executes and records, a satisfaction of mortgage, and returns the note to the borrower When a borrower has paid the loan in full, it's the lenders responsibility to execute and record a satisfaction of mortgage.

In a 1031 exchange, there are rules governed by Section 1031 of the Internal Revenue Code. The rules include _______. A) the basis of the original property is canceled B) the new property must be lower value than the relinquished property C) the property in an exchange must be like-kind D) the replacement property has to come with less debt load

C) the property in an exchange must be like-kind

A buyer has agreed to purchase a property using a contract for deed. Who holds the legal title to the property during the term of the loan? A) The beneficiary B) The buyer C) the seller D) the trustee

C) the seller When a contract for the sale of land is executed, equitable title passes to the buyer, and the seller holds legal title. When the conditions on the sale contract have been met, legal title passes to the buyer.

Which of the following are ways a private loan company insulates themselves from the risk of lending funds to a borrower who has had problems securing them elsewhere? A) they may charge higher fees B) they may charge higher interest C) they may charge higher interest, higher fees, and require the borrower provide collateral to secure the loan D) they may require collateral to secure the loan

C) they may charge higher interest, higher fees, and require the borrower provide collateral to secure the loan Private loan companies may charge higher interest rates, higher fees, and require the borrower to put up collateral to secure the loan.

What is a government sponsored enterprise? A) a corporation that issues home loans on the primary market B) a department of the US Treasury that regulates the mortgage industry C) a government agency that makes certain borrowing easier and cheaper D) a private company that the US Congress created to make certain borrowing easier and cheaper

D) a private company that the US Congress created to make certain borrowing easier and cheaper GSE's are private companies that the US Congress created.

Jody is concerned about the ______ encumbrance that doesn't allow her to start her gardening greenhouse because it sits next to a nature conservancy. A) accounting B) covenant C) financial D) physical

D) physical A physical encumbrance limits what can be done on the property and can destroy the property value.

What does the lump sum payment at the end of an interest-only mortgage loan consist of? A) interest in principal B) interest only C) interest, principal and taxes D) principal only

D) principal only

In which phase of the real estate market, would you expect to see unemployment and foreclosures remain high, but begin to stabilize? A) Expansion B) over supply C) recession D) recovery

D) recovery During the recovery phase, we've passed our low point and unemployment rates and foreclosures begin to level off before improving.

Which party pays for the appraisal in a financed real estate transaction? A) buyer B) lender C) seller D) title company

A) buyer The buyer/borrower, incurs loan related, closing costs before, during, and after closing. These include fees for things like loan, origination, loan, application, underwriting, appraisal, credit report, title, search, and title insurance.

Fannie Mae multi-state note includes a due-on-sale clause, also known as a(n) __________clause. A) acceleration B) alienation C) exculpatory D) subordination

B) alienation A due-on-sale clause, also known as an alienation clause. Paragraph 10 of the note describes the right of the lender to accelerate the loan, if the borrower transfers ownership of the property.

Which of the following could be different from the amount on the initial loan estimate and can impact the monthly payment? A) closing costs B) interest rate C) loan amount D) prepayment penalty

B) interest rate

What could be a consequence, if there were no secondary mortgage market? A) Interest rates would fall B) lenders might not have funds available to make new loans to the public C) there wouldn't be any institutions available to service loans D) unemployment would rise

B) lenders might not have funds available to make new loans to the public Purchases made on the secondary market provide primary lenders with funds to continue making loans. Without this market, lending funds might become scarce.

A foreclosure occurs January 1, 2016. Of the following, which lien takes priority? A) a junior mortgage filed January 1, 2015 B) a mechanics lien filed February 15, 2014, where work commenced December 1, 2013 C) a property tax lien filed January 1, 2014 D) a senior mortgage filed October 15, 2013

C) a property tax lien filed January 1, 2014 Property tax liens, take priority over all other liens.

Kendra and her real estate agent are preparing to close on the property she's purchased on Thursday Kendra will sign the paperwork with her lender to close on the loan at the same time. When does the lender need to provide Kendra with the closing disclosure form? A) at least 10 business days prior to closing on the loan B) at least five business days prior to closing on the loan C) at least three business days prior to closing on the loan

C) at least three business days prior to closing on the loan

More than 70% of the assets of mutual savings banks are derived from ________. A) checking accounts B) investments C) money market accounts D) savings accounts

D) savings accounts More than 70% of the assets of mutual savings banks are derived from savings accounts.

A homeowner has been paying her mortgage for several years and has built up equity. She decides to take out a home equity line of credit because she needs some cash. This credit will create _________. A) a junior lean on the property B) and addition to the principal on her mortgage C) a subordination of her mortgage D) negative amortization on her mortgage

A) a Junior lean on the property A new loan will create a junior lien on the property. The mortgage is the senior lien.

Which of the following is designed to make consumer, financial products and services fair and transparent? A) American Recovery and Reinvestment Act of 2009 (ARRA) B) Consumer Financial Protection Bureau C) Home Affordable Modification Program (HAMP) D) Home Affordable Refinance Program (HARP)

B) Consumer Financial Protection Bureau This is the mission of the CFPB, which was established by the Dodd-Frank act of 2010.

Ned doesn't want the lenders to have his personal information, so he's applying for a home loan under an assumed name. Which type of mortgage fraud scheme is this an example of? A) equity skimming B) false identity C) property flipping D) silent second

B) false identity

David purchased a home three years ago for $300,000. Considering historical property value fluctuations, what is the likely value of the property today? A) exactly $300,000 B) it's difficult to tell. Historically, property values fluctuate, up and down in the short term C) less than $300,000 D) more than $300,000

B) it's difficult to tell. Historically, property values fluctuate, up and down in the short term Over short periods, property values tend to fluctuate. We may see increases and decreases in value from year to year. Three years is a short period of time so it's difficult to say what today's value would be.

Which of the following describes a mechanic's lien? A) it's a general equitable lien B) it's a involuntary general lien C) it's a specific involuntary lien D) it's a voluntary statutory lien

C) it's a specific involuntary lien Mechanics liens are specific, involuntary. A specific lien is against a single property. An involuntary lien occurs when a creditor places a claim on real or personal property through legal means without the owners consent in order to collect a debt.

Natalie is a licensee who assists buyers in the purchase of HUD ______ when they're listed for sale. A) FHA loans B) Homes low-income buyers C) Housing choice vouchers D) Repossessed homes

D) Repossessed homes Many buyers are interested in HUD repossessed homes when they're offered for sale, so it's an area where a licensee can find a clients.

The federal SAFE Act required states to enact licensing and registration requirements related to loan originators, and created the Nationwide Mortgage Licensing System and Registry. Which act was Texas' response to the federal act? A) The Texas Mortgage Loan Originator Act B) The Texas Owner Finance Act C) The Texas Real Estate Licensing Act D) The Texas SAFE Act

D) The Texas SAFE Act

Which governmental legislation established the Consumer Financial Protection Bureau? A) American Recovery and Reinvestment Act of 2009 (ARRA) B) Home Affordable Modification Program (HAMP) C) Home Affordable Refinance Program (HARP) D) Wall Street Reform and Consumer Protection Act (Dodd-Frank Act)

D) Wall Street Reform and Consumer Protection Act (Dodd-Frank Act) The Consumer Financial Protection Bureau was established by the Dodd-Frank Act to ensure fairness and transparency in consumer financial products and services.

Travis made the final payment on his loan according to the loan terms. What must the note holder do to acknowledge that the debt has been repaid? A) assign the note to Travis B) destroy the note C) endorse the note and return it to Travis D) sign the note, market it "paid in full," and return it to Travis

D) sign the note, market it "paid in full," and return it to Travis

A major component of the Housing and Economic Recovery Act was the HOPE for Homeowners program, which aimed to _________ by helping subprime borrowers refinance into more affordable fixed-rate mortgages. A) Bail out credit companies B) increase available credit C) redress homeowner grievances D) stabilize the housing market

D) stabilize the housing market

What term is used to describe loans that were approved for borrowers with lower incomes and poor credit histories? A) I'll-advised B) prime C) subpar D) subprime

D) subprime Loan approved for people with low incomes and poor credit histories are commonly called subprime loans, which often had characteristics such as adjustable rate mortgages with low initial interest rates that increased overtime.

The Housing and Economic Recovery Act and the American Recovery and Reinvestment Act were enacted in response to ___________. A) the civil rights era B) the great depression of the 1930s C) the recession and banking scandal of the 1980s D) the subprime mortgage crisis and economic meltdown of 2007 to 2008

D) the subprime mortgage crisis and economic meltdown of 2007 to 2008

Under which section of the Loan Estimate will you find any credits provided by the seller? A) Calculated Cash to Close B) Initial Escrow Payment C) Origination Charges D) Pre-Paids

A) Calculated Cash to Close

Under the "Projected Payments" section of the Loan Estimate, the consumer can view what is included in the monthly payment. Which of the following may be part of the total payment, other than the principal and interest? A) Closing Costs B) Loan term C) Mortgage Insurance D) Prepayment penalties

C) Mortgage Insurance

The FHA loan program is designed for borrowers who _____________. A) have a minimal down payment and less than stellar credit B) have nothing saved for a down payment C) have stellar credit D) need their loan guaranteed

A) have a minimal down payment and less than stellar credit FHA, insurer lenders against borrower default for accepting higher risk due to lower down payments and lower qualifying standards.

What makes the HECM program safer for borrowers than a traditional reverse mortgage? A) if more equity is paid out than remains, the homeowner doesn't have to make up the difference B) it's free C) neither the borrower nor the home have to qualify D) the homeowner is not responsible for property taxes during the life of the loan

A) if more equity is paid out than remains, the homeowner doesn't have to make up the difference Because HECM's are Federal Housing Administration-insured, neither the borrower nor the estate must make up the difference. Should the loan become "upside down."

Why might self-employed individuals who want to obtain financing for a home purchase, choose not to write off valid expenses on their tax statements? A) it increases demonstrated income B) lenders don't like write-offs C) only invalid write-offs should be included D) write-offs show poor creditworthiness

A) it increases demonstrated income One strategy to help self-employed individuals show better income is deferring tax write-offs leading up to loan application.

A buyer has obtained financing and title insurance and is ready to purchase a home. Why would the lender conduct a title search? A) to ensure that the title to the buyers new home is marketable B) to obtain an abstract of title C) to provide a summary of the title history D) to show that the sellers do not have evidence the home is theirs

A) to ensure that the title to the buyers new home is marketable

In a deed of trust, who is the trustor? A) agent B) borrower C) lender D) neutral third-party

B) borrower The trustor establishes the trust on behalf of another. In this case, the borrower establishes the trust for the benefit of the lender, who is the beneficiary.

Georgette and Elise are buying a home together, and have taken out a loan with a private loan company. They'll pay a bit more interest, and larger fees, but they feel it's worth it to have the home they've always dreamed of. What else might the private loan company require? A) an equity interest B) collateral C) interest only payments D) sponsorship

B) collateral These companies may charge up to the maximum allowable interest for the loan, larger fees, and require borrowers supply collateral to secure a loan.

Private loan companies may charge higher interest, larger fees, and could require ______ to secure a loan. A) an equity interest B) collateral C) interest only payments D) sponsorship

B) collateral These companies may charge up to the maximum allowable interest for the loan, larger fees, and require borrowers supply collateral to secure a loan. Sometimes they place a lien on the property itself.

Lenders are more comfortable when borrowers have around 20% of the property's purchase price to serve as what kind of payment? A) co-borrower's interest B) down payment C) interest payment D) price deduction due to savvy negotiation skills

B) down payment Lenders figure if borrowers have 20 to 25% as a down payment, they have enough skin in the game to be less likely to default on the loan.

Trixie purchased her one-bedroom beach cottage in 1992 with an FHA loan. Now she's selling it, and the buyer wants to assume her loan. The buyer intends to rent the cottage to vacationers. Will the FHA allow this buyer to assume Trixie's loan? A) no, FHA, loans can't be assumed under any circumstances B) no, investors aren't allowed to assume FHA loans; the property must be owner occupied C) yes, as long as the buyer passes a credit check and qualifies to assume the loan

B) no, investors aren't allowed to assume FHA loans; the property must be owner occupied FHA loans may be assumed, but a credit worthiness review is required if the loan were originated after 1986, and the new borrower must occupy the property.

Which of the following provides the lender with an accurate opinion of a property's market value? A) Home Inspection Report B) Property Condition Disclosure C) Uniform Residential Appraisal Report D) Uniform Residential Loan Application

C) Uniform Residential Appraisal Report The top of the report reads, "The purpose of this summary appraisal report is to provide the lender/client with an accurate, and adequately, supported, opinion of the market value of the subject property."

What is a moratorium (or forbearance)? A) a lender forbids any modifications to a property B) a lender makes a loan due immediately C) a lender temporary suspends a borrower's payments D) a loan application is going through the approval process

C) a lender temporary suspends a borrower's payments

When does PMI end? A) after the borrower has paid on the loan for five years B) once the borrower has 20% or more equity C) once the loan-to-value ratio reaches 78% of the original value D) once the loan-to-value ratio reaches 80%

C) once the loan-to-value ratio reaches 78% of the original value Under the Homeowners Protection Act of 1998, once the LTV ratio reaches 78% of the original (not current) value of the property, PMI premium payments must stop automatically.

When interest rates increase, what is the impact on mortgage-backed security investors? A) investor payments cease B) returns on investments decrease C) returns on investments increase D) there is no impact

C) returns on investments increase Investors may benefit from increased interest rates. Higher rates mean larger interest payments that eventually pass through to investors.

Which of these items did the Federal Housing Administration (FHA) implement to stabilize and improve the mortgage market? A) educate the public about the benefits and responsibilities of having a mortgage B) established the home inspection industry C) set construction standards for homes purchased with FHA loans D) set standards for interest rates on mortgage loans

C) set construction standards for homes purchased with FHA loans The FHA requires specific construction standards for buildings purchased with an FHA loan, which reduces lender and insurer risk.

The house payment Tim and Vickie are considering would give them a housing ratio of 34% and a total debt obligation of 40%. Their credit score is 640. What do they need to change to meet the underwriting requirements for an FHA loan? A) they need to improve their credit score B) they need to reduce both their housing ratio and their total debt obligation C) they need to reduce their overall debt D) they should look for a home in a lower price range

D) they should look for a home in a lower price range Although 640 is an acceptable score for an FHA loan, it's underwriting requirements specify a housing ratio of no more than 31%. A less expensive home might help this couple meet the FHA underwriting guidelines for housing ratio.

A debenture is also known as a _________ bond. A) commercial B) municipal C) secured D) unsecured

D) unsecured Debentures are also called unsecured bonds. Debentures are a claim against general assets.

What's one reason a borrower would choose a split- or piggyback loan option? A) to avoid going over the conforming loan limit B) to avoid pain too much interest C) to give business to two preferred banks D) to take advantage of loopholes in the system

A) to avoid going over the conforming loan limit One reason a borrower would choose the piggyback loan option is to avoid going over the conforming loan limit for any one loan. Another reason would be to avoid having to pay private mortgage insurance.

In an installment sales contract arrangement, the seller retains legal title until the contract is paid in full. What type of title does the buyer retain during the contract fulfillment period? A) actual B) equitable C) imaginary D) remainderman

B) equitable

What is an encumbrance? A) a bad neighborhood B) a defect found during inspection C) a defect on a title that can be monetary or physical D) anything that affects the marketability of a property

C) a defect on a title that can be monetary or physical An encumbrance is a defect on a properties title that can be monetary, such as a lien, or physical, such as an easement that limits the owners use of the property.

Vantagestar Ltd. would like to construct a high-end condominium complex. Where will they likely go for financing this project? A) a commercial bank B) a credit union C) a life insurance company D) a mutual savings bank

C) a life insurance company This is a project for a life insurance company because they prefer to be involved with large commercial projects.

The CFPB promotes customer protection in the credit market through a number of strategies, include _________. A) Participating in the secondary mortgage market B) providing tuition grants to prevent overwhelming student debt C) responding to and investigating customer complaints regarding financial services D) the creation of new financial services

C) responding to and investigating customer complaints regarding financial services

Dean was very motivated to sell his house and was excited when he got an offer. When he realized the buyer couldn't qualify for the purchase price, he decided to accept a second mortgage without mentioning it to his lender and reduce the sale price accordingly. Which type of mortgage fraud scheme is this an example of? A) inflated appraisal B) property flipping C) silent second D) straw buyers

C) silent second

Which of the following types of residential dwellings do life insurance companies purchase from the secondary mortgage market? A) Blocks of condo units B) commercial properties C) single-family on one lot D) undeveloped land

C) single-family on one lot Life insurance companies, purchase single-family homes from the secondary market.

If a sales contract doesn't cover certain terms needed by the parties, which of the following is a licensee allowed to do? A) add an addendum to the contract, using a standard addendum and standard language B) draft an amendment, using whatever language is needed to capture the missing terms C) higher an attorney and invoice the client D) terminate the contract on the clients behalf

A) add an addendum to the contract, using a standard addendum and standard language

Under the "Summaries of Transaction" section on page 3 of the Closing Disclosure, amounts listed for the borrower's transaction are calculated to result in _________. A) an amount due from the borrower, which will match the cash to close amount B) an amount to be paid from the lender to the seller C) the purchase price of the property D) the total loan amount

A) an amount due from the borrower, which will match the cash to close amount

Celia was obtaining a conventional loan, and she put $50,000 down as a down payment. Why might her lender also require her to obtain private mortgage insurance? A) her down payment of $50,000 isn't at least 20% of the purchase price B) her lender is a subprime lender C) PMI is triggered at the $50,000 down payment amount D) she has poor credit

A) her down payment of $50,000 isn't at least 20% of the purchase price When loan-to-value ratios exceeded 80% on a conventional loan, lenders may require private mortgage insurance.

Both the Housing and Economic Recovery Act and the American Recovery and Reinvestment Act funded a program called the ______ program, which provided emergency assistance grants to states to purchase and redevelop foreclosed and abandoned homes and residential properties. A) Community Reinvestment B) Neighborhood Stabilization C) Rebuild Our Homes D) SAFE Neighborhood

B) Neighborhood Stabilization The Neighborhood Stabilization Program was funded through recovery legislation.

Because the buyer traditionally pays for this, page three of the Loan Estimate includes information about a consumer's right to receive a copy of the ______ from the lender. A) amortization schedule B) appraisal C) mortgage servicing data D) pre-payment policy

B) appraisal

What are advances? A) loans the Federal Home Loan Bank makes to consumers B) loans the Federal Home Loan Bank makes to member banks C) loans the Federal Reserve makes to consumers D) loans the Federal Reserve makes to member banks

B) loans the Federal Home Loan Bank makes to member banks FHLB lends money, called advances, to member banks in exchange for collateral.

What's the definition of a qualified mortgage? A) one in which the borrower has a credit score of 780 or higher B) one that meets stringent CFPB guidelines C) one that's only offered by a credit union D) one that's only offered by a savings and loan institution

B) one that meets stringent CFPB guidelines A qualified mortgage must be stringent CFPB guidelines that are designed to curb lending practices that led to the late 2000's financial crisis .

Ralph and Mort are neighbors. Ralph is selling, Mort is buying, and Ralph is offering a second loan to help Mort with his down payment, using a contract for deed. When Mort presents this idea to his lender, his lender balks. Why might that be? A) it's not an arms length transaction B) lenders don't approve carryback loans C) lenders don't like contract for deed arrangements D) lenders won't approve a loan in combination with seller financing of any kind

C) lenders don't like contract for deed arrangements A lender would not approve a contract for deed, because the seller holds legal title in a contract for deed, making foreclosure difficult.

What HMDA data is available about loans? A) loan amount, type of loan, and loan purpose B) loan purpose, type of loan, and status of application C) mortgage applications, loan amount, type of loan and loan purpose D) mortgage applications, type of loan, and loan purpose

C) mortgage applications, loan amount, type of loan and loan purpose HMDA data includes mortgage applications, loan amount, type of loan loan purpose, and sometimes reason for denial.

One common predatory lending practice is to charge fees for unnecessary or ______ loan products or services. A) expensive B) needed C) non-existent D) outrageous

C) non-existent Charging fees for unnecessary or non-existent loan products or services is a common predatory lending practice. Another is to charge interest rates greater than 5% over the current market rate.

Jacob is selling his unencumbered property to Shem and is acting as lender in the transaction. Which type(s) of finance instrument can Jacob use for the loan agreement? A) note with assumption agreement B) note with Cari back agreement C) note with mortgage, note with deed of trust, or contract for deed D) promissory deed, or mortgage

C) note with mortgage, note with deed of trust, or contract for deed Jacob can use any of the three basic financial instruments use in real estate transactions.

When a buyer takes over payments on a loan without telling the lender, this is called a purchase ___________. A) According to existing agreements B) on behalf of lender C) subject to existing financing D) upon assumption

C) subject to existing financing When the buyer is paying on the existing loan, and the lender hasn't agreed to a transfer or assumption, the purchase is made subject to existing financing.

Cassie is helping her buyer client, Gus, prepare for closing. What should she encourage him to verify as soon as he receives the form? A) that her commission amount is accurate B) that his credit rating hasn't changed C) that the borrower and seller names, the property address, and the sales price are accurate and spelled correctly D) that the lenders logo is at the top of every page

C) that the borrower and seller names, the property address, and the sales price are accurate and spelled correctly

What is the 200% rule as it relates to tax-deferred exchanges? A) the capital gains realized from the property sale cannot be more than 200% of the original purchase price B) the capital gains realized from the properties sale cannot be more than 200% of the sale price C) the combined fair market value of the property (or properties) being exchanged into cannot be more than 200% of the relinquished property

C) the combined fair market value of the property (or properties) being exchanged into cannot be more than 200% of the relinquished property

When a borrower has paid off the loan, how is the release handled if the security instrument is a deed of trust? A) the lender executes and records a satisfaction of mortgage, and returns the note to the borrower B) the lender returns the note and deed of trust documents to the borrower C) the trustee, executes and records, a deed of reconveyance, and the lender returns the note to the borrower D) the trustee files for a release of lien and the lender returns the note to the borrower

C) the trustee, executes and records, a deed of reconveyance, and the lender returns the note to the borrower

Select the choice that best translates this clause into plain English. "Upon payment of all sons secured by this mortgage, mortgagee shall discharge this mortgage without cost to mortgagor. Mortgagor shall pay all cost of recordation, if any." A) the borrower must pay all recording fees if the property is transferred to another owner B) the borrower will be charged a fee when the loan has been paid off to ensure that the satisfaction of the note is recorded C) when the borrower has fully paid o

C) when the borrower has fully paid off the loan, the lender will record that the note is satisfied

Joe decided to borrow funds from his retirement account to fund the down payment on his new house. It's now two years later and he lost his job. What is true about his pension plan? A) he has until retirement to pay back the pension plan money he borrowed B) he must refinance his home to pay back the balance C) his home is at risk of being repossessed D) the loan must be repaid immediately

D) the loan must be repaid immediately When the loan is from an employee-sponsored pension plan, the loan must be repaid immediately or be subject to income taxes and penalties if the former employee has not reached retirement age.

Mutual savings banks were created to serve __________ during the mid-19th century. A) The banking industry B) the federal government C) the states D) workers

D) workers Mutual savings banks are primarily concentrated along the east coast, and were created to serve workers during the industrial expansion of the mid-19th century.