Real Estate Finance
what are the factors that define money
-store of value -medium of exchange -unit of value -unit of account
CFPB
Consumer Financial Protection Bureau
hardest hit fund
Enabled 18 states and the District of Columbia to help with the most underwater homeowners
Which of the following resources are extremely helpful when working with investors?
REIT analysts and bond rating agencies
Mortgage Forgiveness Debt Relief Act of 2007
Relieves borrower from liability to pay taxes on any monies forgiven by a bank due to a short sale or foreclosure.
What is one of the main differences between the U.S. Mint and the Bureau of Engraving and Printing?
The U.S. Mint produces coins, and the Bureau of Engraving and Printing produces paper notes.
Which of the following describes the discount rate?
The rate at which a bank can obtain a loan from its Federal Reserve bank when using commercial paper as collateral
Taxpayer Relief Act of 1997
Your primary residence is sheltered from capital gains tax up to $250,000 for a single person and $500,000 for a married couple
Which of the following best describes annual percentage rate (APR)?
a standardized measure for interest rates and other loan coasts
Home Affordable Refinance Program (HARP)
broke the normal 80/20 ratio rule usually required as a loan-to-value and offered favorable interest rates.
As foreclosures increased in 2007, what was the response from lenders?
decrease lending activity
conversion of properties
directly increases the supply of real estate properties on the market
What is the most likely effect when the Fed buys securities on the open market?
economy may grow because their is more money on the market
u.s. treasury
executive agency responsible for promoting economic prosperity and ensuring financial security of the United States
David purchased a house three years ago for $300,000. Considering historical property value fluctuations, what is the likely value of the property today?
its difficult to tell. historically property values fluctuate up and down in the short term
Which of the following best describes the state of the market during the over supply phase of the real estate cycle?
properties selling for more than their appraised value, many buyers in the market, and lots of new construction
Long- and short-term debt instruments are called ______.
securities
If the Treasury encounters a deficit, what actions might it take?
sell securities
Unit of account, medium of exchange, and what other factor define money?
store of value
What term is used to describe loans that were approved for borrowers with lower incomes and poor credit histories?
subprime
buyers market
supply is greater than demand
What is the purpose of the Federal Reserve System?
the Fed regulates the US depository institutions
What agency receives paper currency prior to its distribution but after it's printed?
the federal reserve
twelve district banks make up what
the federal reserve
Which was NOT part of the Fed's program quantitative easing?
the funds available to consumers froze
shadow inventory
the housing inventory in default or foreclosure
Which of the following describes the federal funds rate?
the rate at which a bank can obtain a loan from another bank
Which statement most accurately describes the right of rescission?
the three business day period from the date a transaction is consumated or disclosures are delivered to the borrow which is later during which the borrow can cancel the loan
Which of the following is a likely result if Federal Home Loan Banks did not exist?
there would be fewer funds available for lending in the market
What is the most likely effect when the Fed sells securities on the open market?
this takes money out of the market. this decreases the money in the market and potentially slows down the economy.
Which of the following has a direct responsibility to pay the nation's bills?
u.s. treasury
Store of value, medium of exchange, and what other factor define money?
unit of value
Which governmental legislation established the Consumer Financial Protection Bureau?
wall street reform and consumer protection act
Home Affordable Modification Program (HAMP)
A program for modifying a mortgage loan in order for the payment to become within the borrower's ability to pay.
American Taxpayer Relief Act of 2012
The 2012 "Fiscal Cliff" negotiations made the EGTRRA 2001 tax cuts permanent except it reinstated the top bracket of 39.6% starting in 2013 for incomes above $450,000 joint/$400,000 single; Capital Gains taxed at 20% for incomes over $450/400K: Medicare tax increases to 3.8% over $250/200K and extends to some investment income; phaseout of personal exemptions and itemized deductions; AMT was indexed to inflation back to 1970's levels; estate tax rate increased from 35% to 40% on estates over $10 million joint $5 million single (indexed to inflation).
The supply of properties available in the market is greater than the number of buyers. What type of market does this describe?
buyers market
Which of the following is designed to make consumer financial products and services fair and transparent?
consumer financial protection bureau
The rate at which a bank can obtain an overnight loan from another bank without providing collateral is called the ______ rate.
federal funds
Which of the following programs broke the normal 80/20 ratio rule usually required as a loan-to-value and offered favorable interest rates?
home affordable refinance program
The CFPB uses education to accomplish its mission, such as the ______ publications.
know before you owe
In the early 2000s, before the 2007 financial crisis, how would you characterize the real estate market?
low interest rates and high property values
What does it mean if the Fed increases reserve requirements?
member banks must keep more assets on deposit at the reserve bank
Roger has a sufficient income, has never missed a loan or credit payment, and has an adequate credit history. His credit score makes him a very creditworthy consumer. When obtaining a loan, which rate will he most likely get?
prime rate
Which of the following best describes the state of the market during the over supply phase of the real estate cycle?
the community is potentially put at risk