Real Estate Exam 5 Study Guides

The Davidson's lender is trying to approve them for a conventional loan. What is the minimum percentage of total debt ratio they must have to be eligible for a conventional loan?

36%

Which percentage reflects the top debt-to-income ratio limit for qualified mortages?

43%

Borrowers should be wary of lenders who offer mortgages at more than ________ over current market interest rates.

5%

What is the HECM program?

A form of reverse mortgage insured by the FHA

What's a participation certificate?

A mortgage-backed security issued by Freddie Mac

Chapo's property was foreclosed on and he is facing a deficiency judgement so the lender can recover losses incurred from the foreclosure process. What type of lien may the lender levy against Chapo until the losses are paid?

Blanket lien

How does the consumer provide economic support to a community in the living phase of the real estate cycle?

By purchasing and consuming local goods and services

Synergy National Bank issued a conventional loan that is eligible for purchase by Fannie Mae. When Fannie Mae purchases the loan, what will Synergy National Bank receive in return?

Collection Fee

The U.S. __________ is the federal agency with the mission to create strong, sustainable, inclusive communities and quality affordable homes for all.

Department of Housing and Urban Development

Amos is a new licensee who has just earned his first commission check. What should he do with it?

Deposit it into a business account separate from his personal account.

Andy is selling his home to Erika and Doug, who are using an FHA loan for the purchase. To facilitate the purchase, Andy can agree to pay ______.

Discount points to buy down Erika and Doug's interest rate

Your clients, the Nguyen, have signed a contract for deed to purchase a property. What rights do the Nguyen receive?

Equitable title and possession of the property

When George is working with buyers who can't afford a large down payment, he recommends that they look into ________.

FHA financing

Which of the following is regulated by the Federal Housing Finance Agency?

Fannie Mae

Which secondary market player would be interested in purchasing a loan from a commercial bank?

Fannie Mae

The ________ is a government sponsored enterprise that works through a cooperative system to provide agricultural and rural loans.

Farm Credit System

Which entity provides disclosures and public information about the financial condition of FCS?

Federal Farm Credit Banks Funding Corporation

Julia is applying for a loan. Her lender uses her credit scores to determine whether to approve her loan application. What do Julia's scores tell the lender?

How likely Julia is to repay the money that she's borrowed

Max has a dog that bit his neighbor. The neighbor sued Max, which resulted in a judgment against him. Max refused to pay the neighbor according to the judgment. The neighbor placed a lien against Max. How is this lien classified?

Involuntary, general

Why should licensees maintain a business account separately from any personal accounts?

It makes it easier to recognize when the business is profitable

Which of the following describes a mechanic's lien?

It's a specific involuntary lien.

Brian is completing a residential loan application. On the application, he lists his assets. What are assets?

Items of Value the borrower owns

Fairwell Lending must seek the court's permission to foreclose on a property used as collateral for a loan that is in default. What type of foreclosure process is likely being used?

Judicial Foreclosure

The Community Reinvestment Act (CRA) requires lenders to post their policies on what?

Lending

With a _______, no probate is required for assets named within it.

Living Trust

Zara is reviewing the "Calculating Cash to Close" table on page three of the Closing Disclosure to see what has changed from her Loan Estimate. She found this extremely helpful and easy to understand because the table explicitly lists _______.

Loan estimate and final amounts side by side

Which of the following entities commonly acts in the primary markets?

Local credit union

Who originates their own loans?

Mortgage Bankers

Which of the following is the price a lender believes the property will bring at a foreclosure sale?

Mortgage Value

What HMDA data is available about loans?

Mortgage applications, loan amount, type of loan and loan purpose

Chris and Nick hope to qualify for an FHA loan. Their lender calculates their housing ratio as 33% and their total debt obligation as 43%. Their credit score is 620. Do they qualify under FHA underwriting guidelines?

No, they don't meet the housing ratio requirement

Which HUD program is responsible for developing and enforcing federal fair housing policies and laws?

Office of Fair Housing and Equal Opportunity

HUD's ________ has a goal of increasing the availability of safe and affordable housing to Native American families.

Office of Native American Programs

Which interest rate do banks use to offer consumer loans?

Prime rate

What's the name of a discriminatory lending practice whereby lenders limit the scope of their loans to exclude neighborhoods with certain ethnic or economic characteristics?

Redlining

When interest rates increase, what is the impact on mortgage-backed security investors?

Returns on investments increase

More than 70% of the assets of mutual savings banks are derived from ________.

Savings accounts

What term is used to describe the housing inventory in default or foreclosure?

Shadow inventory

Cassie is helping her buyer client, Gus, prepare for closing. What should she encourage him to verify as soon as he receives the form?

That the borrower and seller names, the property address, and the sales price are accurate and spelled correctly

Which act requires that individuals making more than five "owner financed" loans per year, obtain a residential mortgage loan origination license?

The Texas SAFE act

In order for earnings from a second or part-time job to be considered as part of a lender's income evaluation, what must be true?

The applicant must have been employed for at least two years, and the employment must be expected to continue

Which of the following is true regarding value?

The principle of substitution means that people won't pay more for a property than they have to if there are two similar properties

What program allowed the U.S. Treasury to spend hundreds of billions of dollars to stabilize our financial system, boost credit markets help families avoid foreclosure and promote economic growth?

Troubled Asset Relief Program

What does TILA stand for?

Truth In Lending Act

Which of the following has a direct responsibility to pay the nation's bills?

U.S. treasury

Which one of the following best describes the state of the market during the recession phase of the real estate cycle?

Unemployment increasing, prices falling, and foreclosures on the rise

Which veteran loan program in Texas offers qualified veterans help with the purchase of their primary home?

Veterans Housing Assistance Program

Is a homeowner with an FHA loan allowed to obtain a second mortgage?

Yes, if the total of the first and second mortgages is within the maximum loan to value ratio

Which of the following would be the best place to keep monies intended for long term savings?

a certificate of deposit

The Farm Credit System is ________.

a government sponsored enterprise

what are the effects on a property if it includes an encumbrance?

it restricts the owner's use or decreases the value

What type of provision is standard with either the mortgage or deed of trust, but is included in the promissory note rather than the security instrument?

late charge

The ease with which an asset is converted to cash is called ________.

liquidity

Financing for a real estate transaction can use a note with a ________ or a note with a deed of trust

mortgage

Which is one of the benefits of the USDA loan program?

no down payment is required

Which is the most important factor used to determine a credit score?

payment history

One of the following entities is primarily a secondary market player. Which one?

Freddie Mac

The Federal Housing Administrations loan program is designed for borrowers who ________.

Have a minimal down payment and less than stellar credit

The Housing and economic recovery act and the American Recovery and Reinvestment Act were enacted in response to __________.

The subprime mortgage crisis and economic meltdown of 07-08.

Which project would a life insurance company be most likely to finance?

a shopping mall

Regional state bank has made a lot of loans to consumers in the community and is running on low funds. It seeks a loan from the Federal Home Loan Bank. This loan is called a

advance

Which of the following is an example of an inquiry a consumer initiated that may appear on a credit report?

application for a loan

In which type of partnership does each mortgagee receive a share of the mortgage payment?

partnership among mortgagees

What qualifying ratios are used in a VA home loan?

residual income and debt to income

HUD's strategic plan outlines the ________ that support its mission.

Four goals

A homeowner has been paying her mortgage for several years and has built up equity. She decides to take out a home equity line of credit because she needs some cash. This credit will create ________.

a junior lien on the property

What is another name for an installment sales contract?

a land contract

You and your financial system will communicate through ________

a recordkeeping system

How does the Federal Housing Administration fund its mortgage insurance program?

by charging borrowers a mortgage insurance premium

How can a foreclosure process be temporarily stalled?

by filing for Chapter 7 bankruptcy

Which of the following would the FDIC most likely insure?

checking account deposits

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

collateral

Edward is an economic analyst. In his work, he keeps a particularly close eye on this industry, because action or inaction here is a leading indicator of the country's overall economy. Which industry is this?

construction

Which real estate finance instrument includes the promise to repay and the security instrument within the same document?

contract for deed

Borrowers must list their liabilities when completing a residential loan application. What are liabilities?

obligations a borrower owes

The section on the Loan Estimate called "services you cannot shop for" includes fees for services

performed by a third party that lender selects

Which clause is standard in a deed of trust and affects the foreclosure process that can be used if the borrower defaults?

power of sale

Assuming a CMO uses the sequential pay structure, how is principle passed through from borrowers paid to investors?

principal payments are only made to the first tranche until it retires, then the second trache and so on.

Which of the following actions is completed by the secondary mortgage market?

purchases loans from lending institutions

What step of the real estate cycle generally follows recession?

recovery

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

A developer, Howard, has purchased land with the expectation of constructing an apartment building. He explains to his lender that he'll need a construction loan as well, so the mortgage they sign includes what kind of clause to allow the construction loan's lien position to take priority?

subordination

Which parties must be identified on the promissory note?

the borrower and the lender

For tax years 2018 - 2025, a borrower can write off the interest on a home equity loan only if

the funds are used to buy, build or improve the home that secures the loan

Which of the following real estate transactions is subject to recaptured depreciation?

the sale of an investment property

When appraiser Archie uses the sales comparison approach, at least how many comparable may be included in the URAR?

three

Which governmental legislation established the consumer financial protection bureau?

wall street reform and consumer protection act (dodd-frank act)

Up to what amount will the FDIC insure?

$250,000

Pattie is the widow of Oscar, a member of the Army who was killed in action. When she uses the VA loan to buy her first home, what percentage of her loan amount will be charged as a funding fee?

0%

It's possible for the adjustment period on an adjustable rate mortgage to have ranges, such as three or ______ years apart.

10

John wants to do a 1031 tax exchange. He just sold his property. How many days does he have to close on the new property?

180

What must a qualified mortgage's loan term limit be?

30 years or less

John wants to do a 1031 tax exchange with a property he just sold. How many calendar days does he have to identify a new property for the exchange?

45 days

The median credit score for most consumers is

670-739

What is a collateralized mortgage obligation?

A deb security holder

By stabilizing and improving the mortgage market, the FHA helped to build ________.

A global market for mortgage backed securities

In a deed of trust, who is the trustee?

A neutral third party

Assuming a CMO uses the sequential pay structure, how is interest passed through from borrowers paid to investors?

All tranches receive interest payments

What type of value is of interest to taxing authorities?

Assessed Value

Philomena and Barbara are the buyer and seller in a real estate transaction. By when must the closing disclosure be provided to them?

At least three days prior to closing

Which of the following is a likely effect when the discount window is closed?

Banks don't have access to additional funds.

Which of these is an essential rule for a licensee's finances?

Business and personal accounts should be maintained separately

Who is responsible for paying the loan origination fee in a financed real estate transaction?

Buyer

When borrowers started missing mortgage payments, how did this affect collateralized mortgage obligation?

CMOs weren't collecting the expected principal and interest payments

Which of the following is included in HMDA data?

Census tract information

Which of the following would the FDIC most likely insure?

Certificates of deposit

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

The __________ was a response to the practice of redlining and was enacted in 1977.

Community Reinvestment Act

Commercial banks offer interim financing in the form of ________ loans

Construction

Which of the following is designed to make consumer financial products and services fair and transparent?

Consumer Financial Protection Bureau

Which of the following is a true statement about an IRA?

Contributions to a SEP IRA are pre-tax contributions

Which of the following describes amortized debt?

Debt that's paid off by making periodic payments

Bella is a lender. Joshua is the loan applicant. They both complete their part of the request for verification of the deposit form. The last party to complete the deposit form will be the _______.

Depository Institution

lenders are more comfortable when borrowers have around 20% of the property's purchase price to serve as what kind of payment?

Down payment

Which institution guarantees mortgage backed securities with the full faith and credit of the US?

Ginnie Mae

Sam has a mortgage that has a static interest rate, but monthly payments that increase over time according to a set schedule. What type of mortgage does Sam have?

Growing equity

Which approach to finding value would licensed appraiser Christina probably weigh most heavily when appraising a three unit rental property?

Income

What is the name for a loan that creates a lien against property that already has been pledged as collateral?

Junior loan

Gina's mortgage payment arrives late one month. What language in the promissory note allows the lender to charge her a fee as a result?

Late Charge Provision

What's the name of the clause in a promissory note where this language appears: "If the Note Holder has not received the full amount of any monthly payment by the end of ______ calendar days after the date it is due, I will pay a late charge to the Note Holder"?

Late charge provision

Lewis is reviewing his loan estimate and notices under "other costs" that there are items listed that don't include an amount. What does this mean?

Lewis should ask his lender about it

Freddie Mac's mission is to provide ______, stability, and affordability in the U.S. housing market.

Liquidity

Which HUD program is responsible for protecting individuals against discrimination in housing based membership in a protected class?

Office of Fair Housing and Equal opportunity

Lenders who ______ can underwrite and approve FHA loans without requiring the FHA to review each borrower's qualifications.

Participate in the direct endorsement program

How common are interest only loans today?

Rare

Which of the following would the FDIC most likely insure?

Savings account deposit

What is the most common structure for a CMO?

Sequential Pay

RESPA prohibits kickbacks between which parties?

Settlement service providers

What did the Troubled Asset Relief Program allow the U.S. Treasury to do in response to the 2007 financial crisis?

Spend Billions

Which of the following would the FDIC most likely not insure?

Stock certificates

Margot is hoping to buy the Bransons' farm. However, lender Susan informs her that a cloud has been discovered on the Bransons' title. Who is usually responsible for clearing the cloud?

The Bransons

Dawn and Steve are planning to purchase a home, but are wary of the commitment of a mortgage. However, they have no other way to make home ownership a reality, so they decide to educate themselves on the process for obtaining a mortgage loan. Where would you recommend they go for clear, consumer-oriented education on this topic?

The CFPB website

How does a 3-2-1 buydown work?

The interest rate starts low but increases by 1% each year for three years until it reaches the rate stated in the note.

As part of a good financial plan, a business checking account is

The proper place to deposit your commission check

What is a potential cause for a decrease in local economy driven by the FED?

The reserve percentage is increased by the Fed.

The funding fee on a VA loan is waived when ______

The veteran has a 10% or higher VA disability

Why are life insurance companies less concerned with liquidity than long term security of an investment?

They prefer financing larger projects, which inherently have more long term security

Mutual savings banks prefer to keep their lending activities in their immediate geographic area. Why?

They prefer to personally monitor the loans they issue

What is the benefit Ginny Mae investors have over those who invest in other MBSs?

They're able to collect timely principle and interest payments

Why are vision and life insurance optional for real estate licensees to purchase?

They're not required by the profession or law.

How many parties does a deed of trust involve?

Three: borrower, lender, and trustee

Monica is selling her house. Her appraiser Tom, is using a title search method that only looks back as far as when the last title search was performed. The method he's using assumes the last search was done accurately and legally, and that any issues were resolved. Which method is Tom using?

Torrens system

Which of the following statements is true about the Federal Reserve?

Twelve district banks comprise the Fed

which statement describes a conforming loan?

a loan that meets certain criteria that are accepted by Fannie Mae and Freddie Mac

When completing a loan application, the applicant must list their assets. Which of these is considered an asset?

savings account

Institutions that purchase loans, package them into mortgage backed securities then sell these to invesotors may commonly be referred to as

secondary market players

What's true about the draw period on a home equity line of credit

the draw period varies

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

Which entity insures government loans?

FHA

Which institution was created as the Federal National Mortgage Association of 1938?

Fannie Mae

Which of the following is an example of government sponsored enterprise?

Fannie Mae

Farmer Mac is supervised by which entity?

Farm Credit Services Administration

Farm and Country Bank provides credit to the farmers, ranchers, and other rural residents of its community. What government program helps the bank maintain enough capital to fund those loans?

Farmer Mac

When establishing guidelines for conforming loans, Fannie Mae and Freddie Mac use loan limits set by which entity?

Federal Home Financing Agency

Fannie Mae, Freddie Mac and the Federal Home Loan Bank are regulated by the

Federal Housing Finance Agency

Which of the following resources will give you reports and statistics including house price index, foreclosures and refinancing?

Federal Housing Finance Agency

Which government entity oversees open market operations?

Federal Open Market Committee

Which of the following is NOT an accurate statement regarding the title?

Foreclosed properties rarely have clouded titles

Which of these agencies is a government sponsored enterprise?

Freddie Mac

__________ is regulated by the Federal Housing Finance Agency

Freddie Mac

The Government National Mortgage Corporation was created in 1968 under the Department of Housing and Urban Development and is more commonly known as ___________.

Ginnie Mae

Glen is assisting a buyer who makes an offer on a condo in a high end area of town. The seller refuses the offer, and Glen's client believes this is discriminatory behavior. How should Glen advise his client in this situation?

Glen can recommend filing a complaint with HUD about the alleged discrimination

How and when does a contractor performing work associated with a 203k loan receive funds from the lender?

Half is received up front and the other half after the work is completed and approved

Dylan has to choose between spending money on a new guitar or on a dishwasher to replace the one that recently died. What would be an appropriate choice?

He should align his choice with the thing he values more; a new guitar or conveniently clean dishes

Mike has had some financial problems and is considering borrowing from his retirement plan. Which of the following is a true statement?

He should consult with a financial expert before doing so.

Wendy is buying a house from Tom. Tom helps Wendy out by paying for a 2-1 buydown. The lender has given Wendy an interest rate of 5%. Which of the following describes what the buydown will do to Wendy's interest rate?

Her rate will be 3% for the first year, 4% the second year and 5%after that

Read through each of the following pieces of information about buyers' debt obligations and determine which one will qualify for an FHA loan based on the qualifying ratios.

Housing ratio of 31% total debt obligation 40%

What makes the HECM program safer for borrowers than a traditional reverse mortgage?

If more equity is paid out than remains, the homeowner doesn't have to make up the difference

How do VA loan programs compute "residual income"?

Income minus shelter expenses and debts

What is the general economic impact of mortgage loan payments?

Increase in economic growth

A lender benefits from sellin loans to Fannie Mae by

Increasing capital to offer loans with larger sales price

Which of the following are potential private loan resources that may be willing to finance a home?

Individual entrepreneurs

Commercial banks fall into which of the following category of lenders?

Institutional lenders

For which of the following programs are veterans not required to submit a COE, get a new appraisal, or verify income?

Interest Rate Reduction Refinance

Sharon needs to know which mutual funds make the most sense for her financial situation. Which professional could offer the most expertise in this area?

Investment advisor

What is the purpose of the Loan Estimate?

It gives buyers an idea of loan costs so they'll be able to make an informed decision about the loan

Which of the following best describes the non-judicial foreclosure process?

It may be used if the deed of trust includes a power of sale clause

What is the impact to lenders when mortgage packages are sold?

It provides additional cash flow for new loans

Nicole is a young licensee just starting her business and doesn't have any income yet. She decides to purchase insurance as soon as she has the money. Which of the following can she likely skip for now?

Life

In the early 2000s, before the 2007 financial crisis, how would you characterize the real estate market?

Low interest rates and high property values

An ARM usually offers an initial interest rate that's ______ a fixed rate mortgage for a period of time.

Lower than

Maggie has a neighbor, Jim, who is facing foreclosure. She likes Jim and wants to help him out, so they agree to do a "subject to" purchase. What does this mean?

Maggie will take over Jim's loan payments without telling his lender she's doing so

What's the definition of a qualified mortgage?

One that meets stringent CFPB guidelines

Which of the following is true statement about retirement accounts?

Only self employed individuals can use SEP IRAs

In which type of partnership is there is more than one mortgagor as owner?

Partnership among mortgagors

how can a foreclosure be stopped or prevented?

Paying all outstanding liens against the property

Which of the following is the best investment for a licensee?

Paying down outstanding credit card debt

Which of these are established by the Federal Housing Finance Agency?

Percentage targets for loans made to low to moderate income borrowers

Which of the following best describes foreclosure by entry and possession?

Petition to enter, repossession, notice of eviction

A property has just been foreclosed on. Which of the following describes the rules regarding lien priority?

Property tax liens take priority, with all others following "first in time" rule.

Although the Closing Disclosure lists all amounts as accurately as possible, some costs must be estimated. Why?

Property taxes and insurance may change over the life of the loan, resulting in changes to the required escrow amounts.

Which is not one of the lender requirements under the Community Reinvestment Act?

Providing school loans in low income areas

What factors directly affect an adjustable rate mortgage?

Rate, Index and margin

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

Regulation B

The Community Reinvestment Act requires lenders to invest in development and _______ efforts that will enable low and moderate income individuals and families to afford a home.

Rehabilitation

Kristoff got a bit behind on his mortgage and missed several payments. He and his lender devised a schedule that gives Kristoff an opportunity to make up those delinquent payments. What is this an example of?

Repayment Plan

What agency receives paper currency prior to its distribution but after it's printed?

The Federal Reserve

Which of the following entities supports lenders in having adequate cash flow available?

The Federal Reserve and secondary mortgage markets

What's another name for the Homeowner's protection act

The PMI Act of 1998

Borrower Max is reviewing his Closing Disclosure to check the amount of prepaid mortgage insurance, taxes, and interest. In addition to itemizing what his borrower-paid closing costs are, the prepaid section includes ______ for each item.

The applicable time period

The upfront MIP on an FHA loan is calculated on ______.

The base loan amount

What is reconciliation?

The final estimate of value based on results of the appraiser's approaches to value

FHA offers a program for loan insurance on adjustable-rate mortgages under ______ of the National Housing Act.

Title II

Which of the following factors carries the least weight when calculating a credit score?

Type of account

The Federal Housing Administration is part of the

U.S. Department of Housing and Urban Development

Soren is an appraiser. As such, what guidelines must he follow?

Uniform Standards of Professional Appraisal Practice (USPAP)

Which of the following statements is true about the VA' Native American Direct Loan program?

Veterans who use this program must live on federal land trust.

When is a loan modification considered?

When a borrower has missed payments but still has some financial security

What type of professional must an investor use to conduct a tax deferred exchange?

a qualified intermediary

Fannie Mae's multi-state note includes a due on sale clause, also known as a _________ clause.

alientation

When borrowers miss scheduled mortgage payments, fail to pay property taxes or ________, they could face loan default.

allow the property to go into disrepair

What feature do most adjustable rate mortgages have?

allows borrowers to convert to a fixed rate during a specific period of the mortgage

When a buyer takes over the seller's original loan with the lender's permission this is called ________

an assumption

A CMA or a BPO is an example of

an informal estimate of market value

How much should the emergency fund hold, according to the recommendation for creating a responsible financial plan for personal finances?

at least 6 months

Laura is a newly licensed real estate professional. Which of these combinations of insurance does the law and her career choice make it essential that she carry?

auto and error and omissions

Who's the mortgagor in a mortgage?

borrower

Shelly's real estate investment strategy is to look for smaller multi-family properties, fix them up, and rent them out. Her investment strategy most closely matches which of the following?

buy and hold

Which party pays for the appraisal in a financed real estate transaction?

buyer

The supply of properties available in the market is greater than the number of buyers. What type of market does this describe?

buyer's market

During which phase of the real estate cycle does a real estate professional have the most direct impact?

buying/selling

Chuck needs to make a few repairs and upgrades to his home, but he needs some cash to do it. He decides to tap into the equity in his home, which he purchased using a VA home loan. What VA program can Chuck use to do this?

cash out refinance

If you have a specific health issue, which of the following is most critical for you to thoroughly investigate when selecting health insurance?

covered events

Farmer Mac is an entity that ______ for agricultural property loans, rural utility loans, and certain loans guaranteed by the U. S. Department of Agriculture.

creates a secondary market

Jackson has received several inquiries on his credit report. Which of these inquiries was one he did not initiate?

credit monitoring

Joaquin is an appraiser. What purpose do Joaquin and other appraisers serve?

determine a property's value

In an installment sales contract arrangement, the seller retains legal title until the contract is paid in full. What type of title does buyer retain during the contract fulfillment period?

equitable

A home equity line of credit (HELOC) is based on the homeowner's available

equity

before you can create a budget for your personal finances you should

estimate annual and monthly income

The _________ clause protects the borrower's assets that aren't part of the voluntary lien from a deficiency judgement in case of foreclosure.

exculpatory

What's another term for a valuation that's an unbiased opinion of value?

formal appraisal

The amount of the ______ a veteran must pay depends on factors such as military status, down payment amount, and whether the veteran's entitlement is being used for the first time or a subsequent time.

funding fee

Stephanie was having trouble making her mortgage payments. Now her payments are lower than they were, and she's able to pay them each month. This is because her lender ______.

gave her a loan modification

Which type of loan is insured by the Federal Housing Administration?

government

From a lender's perspective, what does a credit score on the low end indicate?

higher risk

In the early years of a mortgage loan term, which portion of the payment is likely to be the largest?

interest

Karen has saved 30,000 of her 40,000 goal for a down payment on a house. Why is it unwise to keep all of that money in a traditional savings account?

it doesn't earn high enough interest

Why might self-employed individuals who want to obtain financing for a home purchase, choose not to write off valid expenses on their tax statements?

it increases demonstrated income

Which of these would most likely be found in the "potentially negative items" section of a credit report?

lien

which of the following is the best example of the economic principle of leveraging as it applies to a real estate transaction?

making a down payment

store of value, unit of account and what other factor define money?

medium of exchange

Life insurance companies participate in real estate in the ________ arena

mortgage blocks from secondary mortgage market

Which person or entity works with many different lenders to find the best loan for the customer?

mortgage broker

The Dodd Frank act created the CFPB in part to regulate _______, which were among the largest originators of subprime mortgages prior to the financial crisis of 2007-08.

non bank lenders

A mortgage with a clause that prohibits the lender from suing the borrower for unpaid amounts if foreclosure occurs is called a ________ mortgage

non-recourse

An intermediate term security issued by the Treasury that has a maturity term of between two and 10 years is called a treasury

note

When does PMI end?

once the loan to value ratio reaches 78% of the original value

In which phase of the real estate market would you expect to see properties selling for more than they're worth, many buyers in the market, and lots of new construction?

over supply

In which type of partnership is the lender a partner as well as the financier?

partnership between mortgagees and mortgagors

Landon will pay interest over the life of his 30-year loan. What other responsibility does he have to lender Marco when he finances his loan?

pay loan related closing costs

Which of the following is an example of an inquiry initiated by a creditor (without the consumer's permission) that may appear on a credit report?

pre approved credit

The ________ clause allows the borrower to pre-pay principal on the loan at any time without penalty.

pre-payment

Which of the following characteristics would the appraiser find in the Neighborhood section of the URAR?

property value trends

Which of these acts has special provisions for borrowers who are victims of over charging?

real estate settlement procedures act

When an investment property is sold, three taxes that apply are transfer tax, capital gains and _________.

recaptured depreciation

________ is when the outstanding loan balance is reconfigured. It is a form of loan modification

recasting

Which appraisal approach will likely weigh most heavily during the reconciliation step when appraising a single family residence?

sales comparison

The mortgage and the deed of trust are ________ that pledge property as collateral for a loan.

security instruments

Which of the following requirements must a person meet to qualify as a Texas veteran?

serve at least 90 active duty days

Which of the following features is shared by the mortgage and the deed of trust?

the borrower is required to maintain the property and pay property taxes and insurance

The FHA EEM program allows modifications such as solar panels as long as

the cost of the modification is within limits based on the value of the home

The percentage recommended for a licensee to allocate when building an emergency fund is

the largest percentage possible after paying all essential expenses

When a borrower has paid off the loan, how is the release handled if the security instrument is a mortgage?

the lender executes and records a satisfaction of mortgage and returns the note to the borrower

Who holds the promissory note while it's being repaid?

the payee

Page four of the Closing Disclosure lists specific disclosures about the loan, such as the penalty for late payments, whether a demand feature applies, whether the loan can be assumed, and ______.

the use of an escrow account

When does the need for mortgage insurance end for a borrower who has a VA loan?

there is no mortgage insurance requirement for a VA loan.

Which of the following statements is true about national lending institutions?

they sell packaged loans to investors

Which of the following will be issued only if title is acceptable and an attorney provides a certificate of title opinion?

title insurance policy

How long does a homeowner have to pay off outstanding liens against his property?

until the foreclosure sale is held

With this alternative to foreclosure, a borrower hands over the property to the lender rather than face foreclosures proceedings.

voluntary conveyance of deed

What is one disadvantage of a will over a trust?

wills are made public, trusts are not.

A Treasury Bill is a Treasury security _________.

with a maturity term of one year or less

Identifying the purpose of the appraisal leads the appraiser to do what next?

identify the data needed

Which of the following is a risk most associated with wholesaling as a real estate investment strategy?

inability to immediately resell the property for a profit

mutual savings banks were created to serve ________ during the mid 19th century

workers

Since the FHA was established, it has taken strategic action to stabilize the mortgage market. Which of these items is one of the FHA's strategies?

Reduce lender risk by establishing borrower qualification standards

The American Recovery and Reinvestment Act provided mortgage assistance to __________.

Wounded servicemen and servicewomen