Chapter 1 The Nature & Cycle of Real Estate Finance
A short term real estate cycle is...? 1-2 years 3-5 years 5-7 years 10-12 years
3-5 years
A long term real estate cycle is typically...? A 10-15 years B 3-5 years C 1-2 years D 5-7 years
A 10-15 years
Which of the following may be a lender in a real estate transaction...? A All of the above B Family and friends C Insurance company D Commercial bank
A All of the above
Which of the following participates in the secondary mortgage market...? A All of the above B Fannie Mae C Freddie Mac D Ginnie Mae
A All of the above
When a borrower hypothecates their property, the lender will maintain...? A Equitable title B Legal title C Interim title D Secure title
A Equitable title
The actual ownership of property is known as...? A Legal title B Equitable title C Secure title D Recorded title
A Legal title
The secondary mortgage market offers ..............for the primary mortgage market? A Liquidity B Supply C Buyers D Support
A Liquidity
Which of the following is an example of using leverage in a real estate transaction...? A Obtaining financing to purchase a property B Purchasing a property using all cash C Inheriting a property from a family member D All of the above
A Obtaining financing to purchase a property
Which of the following may impact real estate cycles...? Social attitudes Taxes Property values All of the above
All of the above
Real or personal property which a borrower pledges as security for a loan is known as...? Accessory Chattel Collateral Substantial property
Collateral
Lenders In The Primary Mortgage Market Include:
Commercial Banks Savings and Loan Associations Insurance Companies
As construction prices increase, demand for new housing generally...? Increases Decreases Remains the same Construction prices and demand for new housing are not related
Decreases
The failure to fulfill a duty or promise is known as...? Execution Hypothecate Default Performance
Default
The right to obtain full ownership of property is known as...? Equitable title Legal title Secure title Full title
Equitable title
Default
Failure to fulfill a duty or promise or to discharge an obligation; omission or failure to perform any act.
Promissory Note
Following a loan commitment from the lender, the borrower signs a note, promising to repay the loan under stipulated terms. The promissory note establishes personal liability for its payment. The evidence of the debt.
A procedure whereby property pledged for a debt is sold to pay the debt in event of default in payments or terms is known as...? Police power Foreclosure Condemnation Hypothecate
Foreclosure
To pledge a thing as security without the necessity of giving up possession of it means to...? Record Acknowledge Notarize Hypothecate
Hypothecate
If demand is high and supply is low, real estate prices will...? Increase Decrease Remain the same Real estate prices are not related to supply and demand
Increase
The percentage of a sum of money charged for the use of money is referred to as a/an...? Discount rate Lending rate Charge rate Interest rate
Interest rate
The use of debt financing of an investment to maximize the return per dollar of equity invested is known as...? Collateral Hypothecate Leverage Pledge
Leverage
Collateral
Marketable real or personal property which a borrower pledges as security for a loan. In mortgage transactions, specific land is the collateral.
The marketplace whereby loans are originated is referred to as the...? Primary mortgage market Secondary mortgage market Stock exchange Front-end mortgage market
Primary mortgage market
Foreclosure
Procedure whereby property pledged for a debt is sold to pay the debt in event of default in payments or terms.
Which of the following serves as evidence of a debt...? Promissory note Collateral Title Credit
Promissory note
Two or more consecutive quarters of negative growth is known as a...? Regression Rebound Recovery Recession
Recession
The marketplace whereby the loans that were originated in the primary mortgage market are bought and sold is referred to as the...? Back-end mortgage market Secondary mortgage market Stock exchange Liquid mortgage market
Secondary mortgage market
Primary
The activity of lenders making mortgage loans to individual borrowers
Legal Title
The actual ownership of property.
James needed to obtain financing to purchase a new house. What will most likely be used as collateral for James' loan...? The house James purchased James' car James' bank account James' old house
The house James purchased
Primary Mortgage Market
The marketplace whereby loans are originated.
Secondary Mortgage Market
The marketplace whereby the loans that were originated in the primary mortgage market are bought and sold.
Interest Rate
The percentage of a sum of money charged for its use. Rent or charge paid for use of money, expressed as a percentage per month or year of the sum borrowed.
Equitable Title
The right to obtain full ownership of property.
Leverage
The use of debt financing of an investment to maximize the return per dollar of equity invested.
Hypothecate
To pledge a thing as security without the necessity of giving up possession of it.