Real Estate Finance

Which of the following should Sylvia and Victor avoid adding to their advertising flyers because it is considered a trigger by Truth-In-Lending?

"Monthly payments $300"

Which of the following housing objectives does Fannie Mae address?

- Regional imbalances of available mortgage credit - The origination of mortgages for sale - The standardization of mortgage loans

Default can lead to a number of negative consequences for the defaulting party, including ____.

- foreclosure - damage to credit score - default-related fees

Bob is interested in purchasing a home for $245,000. He will be paying 25% down, and will be obtaining a loan for 15 years at 4% interest. The loan factor is 7.40. Annual taxes are $8,500, and annual insurance is $2,600. 1. Approximately how much are the monthly taxes on the home? (round to the nearest tenths) 2. How much is Bob putting down on the house? 3. What is the total monthly PITI payment for this property?

1. $710.00 2. $61,250 3. $2,284.75

Garth is representing Mr. and Mrs. Wu, who have just decided to buy a home. Garth advised the couple to get pre-qualified before viewing any more homes. Mr. and Mrs. Wu trust Garth and want to do their own research and get Garth's advice before talking to a loan originator. They are disheartened by the realization that closing costs are typically more than they had thought, so they are considering pursuing an FHA loan, so they can make a smaller downpayment. However, they do not like the fact that the UFMIP makes the house payments higher. Mr. and Mrs. Wu have a combined gross monthly income of $9,000. For the home they want, the estimated monthly payment would be $2,700 on a 30-year loan. 1. If Mr. and Mrs. Wu are pre-approved for a mortgage, what form will they receive? 2. If the Wus buy the home that they want, their house payments would be approximately $2,700 per month. If they go with a conventional loan, the front ratio of their house payment (PITI) cannot exceed $ _______ or 28% of their gross monthly income. 3. If the Wus decide to purchase a $250,000 home with an FHA loan, what is the minimum amount of money that they would be required to put down?

1. Form B conditional approval letter 2. $2,520 3. $8,750

_____ is the consummation of a contractual real estate transaction in which all appropriate documents are signed, and the mortgage loan proceeds are disbursed by the lender.

Closing

_______ is something of value that can be pledged as security for repayment of a loan.

Collateral

The Dodd-Frank Wall Street Reform and Consumer Protection Act established the ____.

Consumer Financial Protection Bureau

The _____ is the interest rate a reserve bank charges eligible financial institutions to borrow funds on a short-term basis.

Discount Rate

Which act increased the insurance coverage on all federally insured credit union accounts up to $250,000?

Dodd-Frank Wall Street Reform Act

The basic formula for interim interest is _____.

Principal x Payment rate / 365 days x number of days until the end of the month

How can Sylvia ensure that Victor is properly licensed as an RMLO?

She can look him up in the NMLSR

Which agency insures deposits in banks and thrift institutions for up to $250,000?

The Federal Deposit Insurance Corporation

The secondary mortgage market was designed to provide greater liquidity to the residential real estate market, primarily by _____.

The sale of mortgage loans as investments

Under the ____, the use of certain terms in an advertisement triggers the need for full disclosure of lending terms.

Truth in Lending Act

A cash-out refinancing loan is a loan guaranteed by the ____ which refinances any type of lien against a secured property.

VA

Edmund served two tours of duty in the United States Marine Core. He and his spouse want to purchase a home for their family. Which loan program would allow Edmund to purchase a home with a downpayment of $0?

VA loan

Can Sylvia work with Victor, giving his name to her buyers?

Yes. She can distribute flyers with Victor, but she should provide her buyers with the names of at least three RMLOs to consider.

Ailene and Arnold are on fixed income. They want to buy a home and are researching different loan options. Which type of loan would be a poor choice for them?

an adjustable-rate mortgage

The sales comparison approach focuses on _____ or recent sales of similar properties, to determine value.

comparables

Loans originated to adhere to Fannie Mae, Freddie Mac, and Ginnie Mae requirements for purchase are called _____.

conforming loans

Under a(n) _____, when the final payment is made to the seller, title transfers to the buyer.

contract for deed

A ____ cannot be accepted from borrowers who can financially afford their mortgage payments.

deed in lieu

The primary determinants of real estate values are supply and ____.

demand

An easement for ingress and egress is known as a(n) ____.

encumbrance

Semi-annual interest is calculated ____.

every 6 months (twice per year)

Sales price divided Monthly Rent calculates the _____.

gross rent multiplier

An excess supply of money in the market results in monetary _____.

inflation

A(n) _____ is a person, corporation, or firm not otherwise in banking that provides its own funds for mortgage financing purposes.

mortgage banker

An FHA borrower can use gift funds from a(n) _____ as funds for a downpayment.

parent

The ____ mortgage market is made up of the businesses that lend to borrowers for the purchase of real estate.

primary

The type of foreclosure that involves the lender filing a lawsuit on the homeowner that has defaulted is known as ____.

strict foreclosure

Appraisers commonly refer to the property being appraised as the _____.

subject property

Which of the following transactions is exempt from RESPA?

temporary loans

Which of the following types of liens is one that is freely given, usually as collateral for a loan?

voluntary