TheCeShop Practice Exam - 6

Which of the following is a requirement if you set up a corporation in order to perform real estate services? A board of directors A separate bank account in the corporation's name Assets of at least $50,000 At least one employee

A separate bank account in the corporation's name

Jamal is active military. His cousin, Piper, is in the National Guard. If they both qualify for a VA loan ______. Both Jamal and Piper will pay the same funding fee if all other factors are the same. Jamal's funding fee will be one-half of Piper's. Jamal will pay less than Piper for his funding fee because of their difference in active versus National Guard status. Jamal will pay slightly more than Piper for his funding fee.

Both Jamal and Piper will pay the same funding fee if all other factors are the same. The Blue Water Navy Vietnam Veterans Act enacted in 2020 eliminated differences for borrowers who are veterans versus those who are members of the Reserve or National Guard, so if all other factors are the same, their loan funding fees would be the same.

In which type of participation agreement would a financier lower the interest on the mortgage in exchange for partial ownership of the project? Limited liability partnership Partnership between mortgagees Partnership between mortgagees and mortgagors Partnership between mortgagors

Partnership between mortgagees and mortgagors

What type of partnership is a cooperative Limited liability partnership Partnership between mortgagees Partnership between mortgagees and mortgagors Partnership between mortgagors

Partnership between mortgagors

How many days does the loan estimate expire?

10

It's possible for the adjustment period on an adjustable rate mortgage (ARM) to have ranges, such as three or ______ years apart. 10 12 15 8

10

Two DTI ratios for conventional loans

28% (housing) and 36% (total debt)

Two DTI ratio for FHA loans

31% (housing) and 43% (total debt)

Which range of credit scores represents subprime borrowers? 0-100 250-300 580-669 740-799

580-669

Homeowners over the age of ______ are eligible for the HECM program.

62

Acceleration clause alienation clause other clauses Section before unit 3/lesson 1

Acceleration clause - make the loan immediately due and payable alienation clause - in a security instrument makes it clear that the collateral property can't be sold or transferred without the lender's knowledge and consent

Albert wants to sell his house to his cousin, who's willing to assume his FHA loan. What clause in Albert's mortgage requires him to obtain the lender's permission to do this? Acceleration clause Alienation clause Non-recourse clause Transfer clause

Alienation clause The alienation clause requires the property owner to obtain lender permission for a buyer to assume the loan, or risk having the loan accelerated.

Assuming a CMO uses the sequential pay structure, how is interest passed through from borrowers paid to investors? All tranches receive interest payments. Interest is first paid to investors holding the greatest number of shares. Only the first tranche receives interest payments. Only the last tranche receives interest payments.

All tranches receive interest payments.

Which of the following situations would make a borrower ineligible for a loan modification?

Borrower has filed for bankruptcy

Craig's loan is secured by a mortgage. Who holds legal title when this security instrument is used? A third-party trustee Craig Craig's lender The seller

Craig

Which of the following resources will give you reports and statistics including house price index, foreclosures, and refinancing? Federal Deposit Insurance Corporation Federal Housing Finance Agency Federal Reserve U.S. Treasury

Federal Housing Finance Agency

Two types of data an appraiser uses

General and specific

Who qualifies for good neighbor next door program?

Law enforcement officers, teachers (pre-Kindergarten through 12th grade) firefighters and emergency medical technicians can contribute to community revitalization while becoming homeowners through HUD's Good Neighbor Next Door Sales Program.

Difference between mortgagers and mortgagees

Mortgager - person receiving the loan Mortgagee - offering the loan

What is a piggyback loan?

Piggyback loans, also known as 80/10/10 loans Simply defined, a piggyback loan is the term used by mortgage lenders when a borrower takes out a first and second mortgage at the same time, often to avoid paying PMI, higher interest rates or avoid taking out a jumbo loan. The first mortgage will typically cover 80% of the purchase price as a traditional 30-year fixed rate mortgage without the usual private mortgage insurance. The second mortgage, the piggyback, will cover 10% of the home price, usually as a home equity line of credit (HELOC). The remaining 10% of the home price is a cash down payment by the borrower.

The two most common methods used when a bank fails are the payout method and the ______ method. Buy and claim Cease and desist Default and foreclosure Purchase and assumption

Purchase and assumption

Which statement most accurately describes the right of rescission? It's another term for squatting, in which a consumer unlawfully occupies a residence. It's the right of a consumer to take ownership of a property through the foreclosure process. The three-business-day period from the date a transaction is consummated or disclosures are delivered to the borrower, whichever is later, during which the borrower can cancel the loan The two-business-day period after a loan closes, during which the borrower can cancel the loan.

The three-business-day period from the date a transaction is consummated or disclosures are delivered to the borrower, whichever is later, during which the borrower can cancel the loan

Who holds legal title when this security instrument (deed of trust) is used?

Trustee

Alienation vs acceleration clause

While an alienation clause is activated when you sell your home, an acceleration clause becomes effective when you fail to meet a requirement of your loan terms.

What is recission?

the cancellation of a contract and the return of the parties to the positions they would have had if the contract had not been made