another ****ing ce shop set

In which of the following situations is a lender prohibited from enforcing an alienation clause?

A transfer between parent and child

What is a triggering term?

A word or phrase that, when used in advertising, requires the disclosure of all of the terms of a loan

Debt is paid off by making periodic payments toward both principal and interest.

Amortized

Mary is assuming Tom's loan. She wants to be sure she has an accurate loan payoff amount. What document will the lender prepare for her?

An estoppel certificate

Select the three items associated with private mortgage insurance.

Associated with conventional loans Paid until equity reaches 22% Only required for some borrowers

Several parties are involved in the loan approval process. Who are four of the major players in a typical financing arrangement?

Borrower Lender Settlement agent Underwriter

The Equal Credit Opportunity Act is regulated by the ______.

Consumer Financial Protection Bureau

Borrowers with credit issues may still qualify for this type of loan.

FHA

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?

FHA

Monthly payments are typically higher with this kind of loan.

FHA

The loan amount may be for 100% of the CRV (VA appraisal) or 100% of the home sale price, whichever is less.

Fact. A VA appraiser will provide a certificate of reasonable value to the lender.

What's one benefit of a rural development loan?

Its optional longer term means a lower monthly payment.

The CFPB uses education to accomplish its mission, such as the ______ publications.

Know Before You Owe

What information does the Loan Estimate provide to buyers under required disclosures law?

Loan payment schedule. Lenders provide the Loan Estimate within three days of receiving a borrower's application. Borrowers receive final closing cost information (on the Closing Disclosure) three days before closing.

Borrowers may take cash out up to the maximum credit amount and, as the balance is paid back, draw again up to the same limit

Open-end loan

In which four of these property transfers does federal law prohibit a lender from enforcing an alienation clause? Select all that apply.

Parent to child Sibling to sibling Spouse to spouse Between parties in a divorce settlement When a borrower dies and a relative inherits

The Hendersons don't have enough money to make the full 20% down payment their institutional lender requires. To close the sale, the seller is willing to finance a loan for the amount between the home's list price and what the institutional lender is willing to loan. What's this type of financing called?

Purchase money mortgage

The U.S. Department of Veterans Affairs' website outlines eligibility requirements for home loans. Take a look at the resource to read about eligibility. What three items are required to be eligible for a VA-guaranteed loan?

Suitable credit Sufficient income Valid certificate of eligibility

due on sale clause

The entire debt must be repaid at the time of sale

When a buyer assumes an existing loan, the original borrower is no longer liable if that buyer defaults on the loan. true or false

This is false. With an assumption, the original borrower can still be pursued by the lender if the new borrower defaults.

What is the purpose of the Truth in Lending Act?

To better educate consumers about the cost of credit or obtaining a loan

Jennings has received a Closing Disclosure from his lender. What's the purpose of this form?

To detail all costs Jennings will owe at closing

Who guarantees VA loans?

U.S. Department of Veterans Affairs

Which of the following best describes a home equity line of credit?

Used as an open-end account similar to the revolving credit of a credit card from which borrowers can take advances, repay money, and even borrow money again

There are nationwide, regional, and local private loan companies, and even some individual entrepreneurs. They may charge higher fees and larger interest rates than conventional lenders, and may require collateral to secure a loan, but the service they provide is important for buyers who need funds and can't secure them any other way.

YEAH

Prevents future buyers from assuming the loan

alienation clause

The borrower must be an eligible veteran, active duty military, or surviving spouse and must qualify for the loan.

fact

These government loans are available to family farms and housing in rural areas. fact or fiction

fact

Balloon loans can be paid as interest-only or partially amortized until the final balloon payment is due. true or false

false

It's harder for borrowers to qualify for an FHA loan than for a conventional loan. true or false

false

Lenders may adjust the rates any time interest rates rise. true or false

false

The buyer has possession of the property, while the seller still holds the title.

land contract

What is the borrower charged for all FHA loans?

mortgage insurance premium

Private loan companies may be found in many places. There are ______, regional, and local lenders, and even individual entrepreneurs who loan money.

national

What type of arrangement allows the buyer to retain title to the property, but places a security interest in the property on behalf of the seller?

purchase money mortgage

A signed agreement between the lender and the original borrower. release of liability or novation

release of liability

Chris is in the process of purchasing a property with 20 acres of farmland in a rural area of the state. Assuming his income meets the criteria of the program, what type of loan may Chris find the most desirable?

rural development loan

A buydown is a prepayment of interest at closing to reduce the interest rate, either temporarily or permanently. true or false

true

In an assumption, the buyer assumes all responsibility. With "subject to," the agreement is subject to all agreements originally made between the current seller and the lender.

yup

The interest rate fluctuates based on the economic index to which it's tied.

Adjustable-rate mortgage

Select the three items associated with a mortgage insurance premium.

Required for all borrowers Associated with FHA Paid until the entire loan is paid off

Borrowers are not required to have a down payment.

fact

Veterans can use VA loans for investment properties.

fiction

true or false There are nationwide, regional, and local loan companies.

true

Caroline's monthly mortgage payment includes principal, interest, taxes, and insurance. She has a 30-year mortgage at a consistent 3.75% interest.

A budget mortgage. Because it includes principal, interest, and prorated taxes and insurance, it allows her to "budget" for her housing expenses.

Charles is selling his property to Seth. Charles is financing part of the transaction for Seth, who will make payments to Charles while Charles retains the property title. What is this an example of?

A land contract

Roy and Alyssa's mortgage calls for regular PITI payments for three years and then a lump sum payment at the end of the three-year period. What kind of mortgage loan do they have?

A partially amortized (balloon) mortgage

What's a key feature of the Federal Housing Administration's loan program?

Insures lenders against loss from borrower default

What type of arrangement allows the buyer to retain title to the property, but places a security interest in the property on behalf of the seller?

Purchase money mortgage

What is the name of the set of regulations used to enforce the Equal Credit Opportunity Act?

REGULATION B

Which of the following is a true statement about U.S. Department of Veterans Affairs loans?

The VA will guarantee a loan based on the sales price or the certificate of reasonable value (CRV). When granted, the loan guarantee amount is limited by either the CRV or the sales price, whichever is lower.

In a loan assumption, what does the estoppel certificate verify?

The assumable loan balance. Estoppel basically means that someone is certifying something to be true so they can't later go back and claim something contrary to that first statement. The estoppel certificate certifies the current loan balance to the buyer in a loan assumption agreement.

Buyer takes over the seller's loan payment upon loan qualification by lender

assumption loan

Builder Moira has pledged all of the townhouses she's building as security for repayment of her loan. When one of the townhouses sells, there's a release clause that lets that townhouse be removed from the developer's loan without initiating a due-on-sale clause. What type of mortgage is this?

blanketed mortgage. Blanket mortgages are great for developers who buy land and divide it into smaller parcels, which is what happens with townhouses, condos, and apartment buildings.

Sam has a mortgage payment that includes his property taxes and property insurance. What type of mortgage does Sam have?

budget

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?

collateral

Private loan companies may charge higher interest, larger fees, and could require ______ to secure a loan.

collateral

These loans are generally more secure because borrowers put more money down.

conventional

A borrower who puts down less than 20% of the loan amount may have to purchase PMI.

conventional. Conventional borrowers pay for PMI. FHA borrowers pay for MIP.

Loans can be set for a period of 33 years (38 years for very low income individuals). fact or fiction

fact

The U.S. Department of Veterans Affairs guarantees the loans.

fact

Mortgage brokers never use loan origination fees. true or false

false

One advantage of a loan origination fee is it helps buyers afford more house than they could otherwise. true or false

false

Private loan companies are divisions of commercial banks. true or false

false

Regulation B specifies that even those with no income and a low credit score must be granted credit if they live in inner-city areas. true or false

false

Regulation Z requires lenders to demonstrate that they serve the community's low- to moderate-income housing needs.

false

TRID documents are used for all residential mortgage loans, including home equity lines of credit and dwellings not attached to land. true or false

false

TRID is related only to mortgage loans, so real estate professionals aren't impacted. true or false

false

The Truth in Lending Act prohibits lenders from discriminating based on protected class.

false

true or false They're not really companies, but individuals with a lot of money to lend.

false

The FDIC regulates the ECOA. true or false

false. The Consumer Financial Protection Bureau (CFPB) regulates the ECOA through Regulation B,

If a buyer can assume an existing loan, it's always better do so rather than applying for a new loan. true or false

false. There's only an advantage to assumption in cases where the existing loan has a much lower interest rate than the current market rate.

Borrowers apply to the FHA for a mortgage loan. true or false

false. This is false. Borrowers apply to the lender, not directly to the FHA.

If the existing finance instrument contains an alienation clause, an assumption is not possible. true or false

false. This is false. It's possible for the lender to agree to an assumption.

Farm families financing the purchase of properties in rural areas may be able to obtain financing through this government agency if they meet certain criteria, such as income requirements.

farm service agency

Borrowers can receive loans for no more than 96.5% of the purchase price. fact or fiction

fiction

The U.S. Department of Veterans Affairs insures the loans. fact or fiction

fiction

Fred is an agricultural lender who helps the ranchers and farmers in his community by providing credit for purchasing land, making repairs to their buildings, and improving their agricultural property. He's able to do this in part because of the ______ offered by the USDA Farm Service Agency.

guarantee loans

Charges 1 to 10 points, which may be added to the loan or due at closing

hardmoney loan

Tougher to sell on the secondary market and more difficult for consumers to qualify for than conforming loans

jumbo loan

A new contract that replaces the old one and removes original borrower's liability

novation

A substitution of the maker of the note. release of liability or novation

novation

A buyer who assumes an existing loan may have to meet the lender's qualification standards and/or pay lender fees. true or false

true

ARM interest rates can fluctuate with the national economy. true or false

true

Consumers who feel they've experienced lending discrimination can file a complaint with HUD. true or false

true

FHA loans are only available from FHA-approved lenders. true or false

true

In a reverse mortgage, the lender makes payments to the homeowner and slowly gains ownership. true or false

true

Lenders charge a loan origination fee up front to receive some immediate compensation on the loan. true or false

true

Often, an ARM will have a below-market rate for the loan's first year.

true

Regulation Z requires that borrowers of residential loans be given specific information related to the loan. It also regulates advertising of credit terms.

true

The Department of Justice can file a lawsuit under both the Fair Housing Act and ECOA. true or false

true

The FHA collects a mortgage insurance premium on each loan. true or false

true

The FHA covers the lender against loss if the borrower defaults. true or false

true

The Farm Service Agency administers rural development loan programs. true or false

true

The TRID disclosures aren't required for seller-financed transactions or cash transactions. true or false

true

The Truth in Lending Act requires disclosure of loan terms and costs.

true

The purpose of the ECOA is to prevent lending discrimination. true or false

true

true or false Some loan companies are individual entrepreneurs.

true

true or false There are nationwide private loan companies.

true

The federal Garn-St. Germain Depository Institutions Act of 1982 prohibits the enforcement of an alienation clause when the property is being transferred between a parent and a child, to a relative as a result of the borrower's death, between spouses, or as a result of a divorce

yup