Real Estate Finance
Remy's mortgage payment is $1.256.28. His annual property taxes are $809, and his annual insurance premium is $712. How much of his payment goes toward the principal and interest?
$1,129.53
Which of the following is Fannie Mae most likely to purchase?
A conventional fixed-rate mortgage issued by a commercial bank
Which of the following results from the Treasury selling securities?
A decrease in money in the economy
What is a moratorium (or forbearance)?
A lender temporarily suspends a borrower's payments.
How are account numbers displayed in a credit report?
Accounts numbers are truncated for security purposes.
Which of these items is a demand deposit?
Checking account
Commercial banks offer interim financing in the form of ______ loans.
Construction
Which of the following statements best describes disintermediation?
Consumers are withdrawing more money from banks than they are depositing.
When a buyer obtains an FHA loan, the seller may ______.
Contribute up to 6% of the sales price (or appraisal, if that's lower) to the buyer's closing costs
Interest-only loans are a form of ______ buyer financing.
Creative
The rate at which a bank can obtain a loan from its Federal Reserve bank when using commercial paper as collateral is called ______.
Discount rate
On an FHA 203(k) loan, the combined cost of home value and rehab must ______.
Fall within the FHA mortgage limit for the area where the property is located.
Community Banks is being sued for intentionally violating the Truth In Lending Act. What fines and imprisonment possibilities can the company face?
Fines up to $5,000 and up to a year of imprisonment
______ is regulated by the Federal Housing Finance Agency.
Freddie Mac
About 50% of the borrowers in Neighborhood One are Hispanic, while only 4% in Neighborhood Two are Hispanic. The median home price in both neighborhoods is the same. However, statistics show that there is a significantly greater percentage of minority and low-income borrows who were denied financing for loans on properties in Neighborhood Two and were offered lower rates to live in Neighborhood One. What act is intended to prevent this type of potentially discriminatory lending pattern?
Home Mortgage Disclosure Act
Which type of loan is meant specifically for improvements, such as additions or renovations?
Home improvement loan
Which of the following is a true statement about deducting interest on mortgages taken out in tax years between 2018 and 2025?
Interest on the first $750,000 of mortgage debt is deductible for married couples filing jointly or $375,000 for married couples filing separately.
What is the purpose of a lifting clause?
It allows a borrower to refinance a first mortgage without affecting its lien position even when a junior mortgage is in place.
Conforming loan limits vary based on the number of units being purchased with the property and ______.
Location
Natalie and Sam are reviewing the Loan Estimate form to ensure the date, their names, the property address, and sale price is listed accurately. Additionally, the information provided about their loan term, purpose, product, type, and rate lock should _______.
Match what the lender discussed with both of them
The Bransons have a conventional loan for which they were required to obtain private mortgage insurance. Their local real estate market has been going like gangbusters, and their house is now appraised at twice their loan balance! Will their PMI be cancelled?
Maybe, but they'll have to petition their lender
The ______ is where the borrower finds details about how, when, and by how much the interest rate will change in an adjustable rate mortgage (ARM).
Mortgage note
Chanel is buying a brand new home with a VA loan. She's obtained a certificate of reasonable value. For how long is that CRV valid?
One year
While Fannie Mae considers total and housing debt-to-income ratios in its underwriting process, Freddie Mac considers ______.
Only total debt-to-income
In which type of partnership is the lender a partner as well as the financier?
Partnership between mortgagees and mortgagors
What type of partnership is a cooperative?
Partnership between mortgagors
In order for the spousal support Kayla receives to be considered in the lender's income evaluation when Kayla applies for a home loan, what must be true?
Payments must have been received for at least three years, and must be expected to continue for at least one more year.
Section 255 of the Title II FHA-insured loan program covers ______ mortgages for borrowers age 62 or older.
Reverse
A loan that's offered based on a homeowner's equity in which funds are drawn over time and the bank gains corresponding property ownership is called a ______.
Reverse annuity mortgage
Because of the funding fee required for a VA loan, a borrower with no down payment funds saved should ______.
Roll the funding fee into the loan
The Addams family has an FHA-insured loan. The family's mortgage payment has a fixed interest rate, but after the first five years, the rate will adjust annually. Which FHA loan insurance program are they using?
Section 251
When a buyer takes over payments on a loan without telling the lender, this is called a purchase _____________.
Subject to existing financing
The upfront MIP on an FHA loan is calculated on ______.
The base loan amount
Page one of the Loan Estimate includes a section called "Costs at Closing." The amount shown as estimated cash to close is ______.
The estimated amount the client will pay by cashier's check or wire transfer at closing
Janie and Sam are newly married and are looking for their first home. They're fortunate that Janie's mom set aside some money to help with this purchase. Janie's mom says it's a loan, though, and they will have to pay her back. What's wrong with this?
The loan will go against their debt load.
When a lender has a lien on a property, what rights does the lender hold?
The right to foreclose
The ______ was enacted in 1968 as part of the Consumer Credit Protection Act.
Truth in Lending Act
A lapse in property insurance coverage can result in borrower default because it leaves the lender ________ should something happen to damage the property.
Vulnerable
Under current tax law, what's the maximum tax-free gift an individual can give to another individual annually?
$15,000
The VA loan program offers a basic entitlement amount of ______.
$36,000
Bob just closed on his investment property. He's already identified a replacement property that he'll be exchanging into by using a 1031 tax-deferred exchange. How many days does he have to close on his replacement property?
180
John wants to do a 1031 tax exchange. He just sold his property. How many days does he have to identify a new property?
45
Which type of real estate investment trust derives a portion of its income from interest dividends?
Mortgage REIT
Which type of real estate investment trust involves both residential and commercial properties?
Mortgage REIT
Norman owns a home. He received an unsolicited call from a company offering to greatly reduce Norman's loan payments, for a hefty upfront fee. All they need to get started is the bank account information for the account Norman currently uses to make his payments. What might be going on here?
Mortgage compassion scam
Celeste hopes to qualify for an FHA loan. She calculates her housing ratio as 31%, and her total debt obligation as 42%. Her credit score is 580. Does she qualify under FHA underwriting guidelines?
Yes
Why did investors purchase CMOs prior to the 2007 financial crisis?
Housing price appreciation appeared to be a sure thing.
