Real Estate Law & Practice Quiz 2
Which of the following best describes the principal advantage of a sale-leaseback from the commercial buyer's point of view?
Allowable depreciation (cost recovery) can be claimed
A qualified borrower for an FHA 203(b) loan must do which one of the following?
Be an owner-occupant
In which of the following ways do mortgage brokers differ from mortgage bankers?
Brokers do not provide their own funds to originate loans
Which of the following statements regarding federally insured or guaranteed loans is true?
FHA loans insure the lender up to 100 percent of any loss suffered
A veterans sells his property to another veteran, who assumes the loan. Which of the following is true?
It may be assumed with VA approval
Which of the following practices is prohibited under FHA regulations?
Lender charges a prepayment penalty
Under an FHA graduated payment mortgage, which the following fluctuates over the time of the loan?
Monthly payments
The seller has an existing first mortgage. To limit exposure to further liability on the mortgage note, the seller should find a buyer ready to:
Obtain his or her own financing
The money used for FHA loans is supplied by which of the following?
Qualified lending institutions
A buyer is purchasing a home by way of a VA loan. The closing statement reveals a payment of $1,200 in discount points. How would this payment appear on the closing statement?
Reduction in the proceeds due seller
A buyer purchases a fee simple property for $70,000 by way of assuming a first mortgage of $50,000, paying $10,000 in cash and having the seller take back a purchase-money second mortgage for the balance. There is an existing $5000 second mortgage on the property to be paid off. At settlement (close of escrow), what is the correct order in which to record documents?
Release of second mortgage, deed, purchase-money second mortgage
Under a VA loan, a veteran can do which of the following?
Sell the home and allow a non veteran buyer to assume the loan with VA approval
Assume that a buyer is making fully amortized payments of $600 per month on a purchase-money mortgage. Which of the following is true?
The amount applied in interest decreases each month
To qualify for a VA loan on a dwelling, all the following requirements are true EXCEPT:
The borrower must pay discount points at closing.
What element is peculiar to the sale-leaseback transaction?
The property is sold on condition that the new owner lease it back to the seller at the time title passes
A Cerificate of eligibility is a prerequisite for which type of loan?
VA
All the following agencies are primary sources of money for the secondary mortgage market EXCEPT the:
VA
A borrower bought a $74,000 house with no down payment through savings and loan. The loan is probably a(n):
VA loan
The liquidation of a debt by periodic installment is BEST described as:
amortization
The amount a lender will generally loan is based on the:
appraised value for loan purposes or the sales price, whichever is lower
A mortgage broker:
arranges loans between borrowers and lenders
When the amortized payment of a mortgage remains constant over the period of the loan but leaves an outstanding balance to be paid at the end, this payment is called a(n):
balloon payment
All of the following are transactions involving a collateralized debt EXCEPT a:
debenture
The maximum permissible loan-to-value ratios are:
determined by federal statute in the case of FHA loans
The FHA will insure:
first mortgages
The VA is authorized to:
guarantee repayment of loans up to a specific amount
A veteran sells his house and permits the buyer to assume his VA loan:
has no further liability if he obtains a release from the lender and the VA
A requirement of a borrower under an FHA-insured loan is that he or she:
have a cash down payment and part of closing costs
Discount charges charged on a loan result in:
higher yield to the lender
The VA is authorized to make direct loans:
in a rural area where the veteran cannot find a lender to lend at rates of interest competitive with those in other areas
An installment contract for sale of real estate gives the buyer of the following EXCEPT:
legal title to the property
A mortgage broker generally can do all of the following EXCEPT:
list for sale property financed by one of its own clients
The discount charged by a lender on a federal, VA or FHA loan is the percentage of the:
loan amount
The FHA serves to do all of the following EXCEPT:
make direct loans in the primary mortgage market
A case in which the seller wanted to be relieved of all obligations under the VA mortgage that another veteran buyer would assume and substitute eligibility would be BEST described as:
novation
All of the following transfers can result in the lender's exercising its rights under the due-on-sale clause, based on the rules Freddie Mac, EXCEPT a(n):
second mortgage
A promissory note provided for interest only to be paid during its term is BEST described as a(n):
straight note
The term refinancing refers to:
the repayment of an existing mortgage loan from the proceeds of a new one.
A land contract (or contract for deed) and a seller-carryback purchase-money mortgage are similar in that:
the seller is the lender
When a loan is approved by FHA:
there will be some required down payment