Chapter 13 Real Estate Principles

D

17. An investor can invest in mortgages by purchasing all EXCEPT a. Ginnie Mae pass-through certificates. b. Freddie Mac participation certificates. c. junior mortgages. d. municipal bonds.

A

23. A quasi-governmental agency, which was originally established to create a secondary mortgage market for FHA loans, is a. FNMA. b. GNMA. c. FHLMC. d. HUD.

A

24. The basic role of the GNMA is to a. resupply capital to primary lenders by guaranteeing repayment of pools of mortgage loans. b. insure loans made by primary government lenders. c. sell mortgage pools to money market funds. d. facilitate the resale of mortgage loans by marketing participation certificates.

C

25. Freddie Mac was originally formed to provide a secondary mortgage market facility for the a. Federal National Mortgage Association. b. Government National Mortgage Association. c. Federal Home Loan Bank Board. d. Mortgage Guaranty Insurance Corporation.

A

26. The term "usury" in the field of real estate lending means charging an interest rate over and above a. the legal limit. b. the prime rate. c. 10%. d. 20%.

D

27. Computerized Loan Origination (CLO) programs are available to a. mortgage brokers. b. real estate brokers. c. attorneys. d. all of the above.

C

28. Participation Certificates (PCs) are instruments used by a. GNMA. b. FNMA. c. FHLMC. d. Farmer Mac.

A

29. FHLMC was formed primarily to provide a secondary market for a. savings and loans. b. commercial banks. c. mortgage companies. d. insurance companies.

D

3. Which of the following sources provides the most home mortgage money in the United States? a. Mutual savings banks b. Commercial banks c. Credit unions d. Mortgage companies

D

30. Other lenders providing mortgage money might include a. pension and trust funds. b. credit unions. c. commercial finance companies. d. all of the above.

C

1. A primary mortgage lender is one who a. lends to FNMA, FHLMC and GNMA. b. pools, insures, guarantees and sells first mortgage loans. c. lends to borrowers, services the loans and perhaps sells the instruments to another. d. lends only for first mortgages and deeds of trust.

C

10. With regard to real estate loans, life insurance companies tend to favor a. single family houses. b. interim construction loans. c. large commercial buildings. d. not being involved in real estate.

C

11. One may find financing for a single family dwelling at all of the following EXCEPT a. savings and loans. b. commercial banks. c. insurance companies. d. mortgage bankers.

D

12. Which of the following is most likely to specialize in large, commercial participation loans? a. Mortgage banks b. Savings and loans c. Farmers home loan association d. Life insurance companies

D

13. Lenders who could be described as investing a major portion of their assets in long-term real estate loans, preferring not to service their own loans, and favoring large commercial properties would be a. commercial banks. b. savings and loans. c. mutual savings banks. d. life insurance companies.

C

14. Which of the following specializes in making loans and reselling them? a. FNMA b. Mortgage brokers c. Mortgage bankers d. VA

C

15. Which of the following specializes in bringing lenders and borrowers together without lending their own money? a. Insurance companies b. Mortgage bankers c. Mortgage brokers d. Commercial banks

B

16. Most mortgage brokers generally a. lend their own funds. b. use money provided by other investors. c. service the loans they make. d. only make loans on large properties.

C

18. A lender who continues to collect mortgage payments even after selling the loan is said to be a. originating loans. b. laundering money. c. servicing the loan. d. discounting the loan.

B

19. All of the following offer secondary mortgage market programs EXCEPT a. FNMA. b. FDIC. c. FHLMC. d. GNMA.

A

2. From whom would a borrower obtain a VA or FHA loan? a. Approved mortgage lender b. VA or FHA c. Insurance companies d. Sale of bonds

C

20. The secondary mortgage market is an area of activity in which a. a borrower may get loans if the primary market cannot accommodate them. b. second mortgages are made. c. existing mortgages are bought, sold and discounted. d. foreclosed properties are bought and sold.

D

21. Fannie Mae buys and sells all mortgages EXCEPT a. FHA loans. b. VA loans. c. conventional loans. d. chattel mortgages.

A

22. The entity that purchases the most loans in the secondary market is a. FNMA. b. FHLMC. c. HUD. d. GNMA.

D

4. Which of the following are designed to prevent disintermediation? a. Adjustable rate mortgages b. Secondary mortgage markets c. Pass-through certificates d. Certificates of deposit

D

5. To whom can a borrower turn for a direct loan for the financing of a single-family dwelling? a. Federal Housing Administration b. Mortgage broker c. Insurance company d. Savings and loan institutions

D

6. Which of the following supplies money to finance home loans? a. Fannie Mae b. FHA c. VA d. Savings and loans

C

7. Commercial banks are most likely to deal heavily in a. house boat loans. b. mobile home purchase loans. c. construction loans. d. residential home loans.

A

8. Commercial banks are most likely to deal heavily in a. interim loans. b. 40-year residential loans. c. home improvement loans. d. VA loans.

A

9. One of the primary reasons for the decline in loan demand at savings and loan institutions appears to be a. deregulation of the lending industry. b. the poor location of many of the branch offices. c. the high interest rates being charged by commercial banks. d. poor supervision by regulating agencies.