Section 2

Which act, which was the first act passed to address the subprime mortgage crisis and was also known as "the stimulus package," sought to create new jobs and save existing ones, spur economic activity and invest in long-term growth, and foster new accountability and transparency in government spending?

American Recovery and Reinvestment Act of 2009 (ARRA)

Althea is starting her own candle business. Her plan is to rent a space to sell her products for several years, with the hope of expanding. In this scenario, which item represents supply?

Commercial space for lease

Which of the following items directly influences real estate supply?

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 statements best describes disintermediation?

Consumers are withdrawing more money from banks than they are depositing.

What's the term for an extended period of time during which banks experience more withdrawals than deposits?

Disintermediation

In which phase of the real estate market would you expect to see an increase in hiring and employment, increased public confidence, and an increase in buyers in the market?

Expansion

What do loans create for banks and other financiers?

Future cash income

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

High but stabilized unemployment and a high number of foreclosures

What is the general economic impact of mortgage loan payments?

Increase in economic growth

David purchased a house three years ago for $300,000. Considering historical property value fluctuations, what is the likely value of the property today?

It's difficult to tell. Historically, property values fluctuate up and down in the short term.

Tonia is buying a new home. She has a down payment of $30,000 and will obtain a $250,000 mortgage from a local bank to make up the remainder of the purchase price. What is this an example of?

Leveraging

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

Low interest rates and high property values

In which phase of the real estate market would you expect to see unemployment increasing, prices falling, and foreclosures on the rise?

Recession

What step of the real estate cycle generally follows recession?

Recovery

What term is used to describe loans that were approved for borrowers with lower incomes and poor credit histories?

Subprime

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

The Federal Reserve and secondary mortgage markets

A multibillion dollar online retail distributor has decided to set up operations in Ashland. The population of Ashland is 22,000. What is the potential impact to the area?

The community is potentially put at risk.

Larry obtained a mortgage from State Bank. Larry owns the property, controls it, and has all the rights that come along with real property ownership. State Bank has an interest in the property and one other right. What is that?

The right to foreclose if the borrower defaults

Which of the following is a description of leveraging?

Using a small amount of cash to obtain a loan of a larger amount