Section 5 Unit 1 Practice Exam
A Construction loan
A new apartment building is going up downtown. The owner secured interim financing for the job. Which of these loan types is interim financing?
Interim
Construction loans are a type of ______ financing.
Fees from originating and servicing loans
How is a mortgage banker paid?
Liquidity
Life insurance companies are more concerned with long-term stability of investments than they are ___________.
Construction loan
A local company wants to build a new office building. What type of loan will it most likely be seeking from its commercial bank?
Construction
Commercial banks offer interim financing in the form of ______ loans.
Participation
Joe works for a life insurance company that funds commercial investment projects and often insures these projects by insisting on an equity position. What type of financing does this describe?
Participation financing
Life insurance companies sometimes like to insure their investment in commercial projects by insisting on an equity position. This is known as ______ financing.
Private
Mortgage bankers are mostly what type of enterprise?
A life insurance company
Vantagestar Ltd. would like to construct a high-end condominium complex. Where will they likely go for financing this project?
National Credit Union Administration
What does NCUA stand for?
The life insurance company participates by taking partial ownership of the project in exchange for funding the loan.
What does it mean when a life insurance company uses participation financing?
It removed the union-worker-only membership restriction.
What impact did the authorization of the Credit Union Membership Access Act have on credit unions?
Demand deposits
What's the primary source of funds for commercial banks?
FDIC
Which banking-related entity shares similarities with the purpose and function of the NCUA?
They don't service the loan beyond placement.
Which of the following is true about mortgage brokers?
Checking account or Saving account
Which of these items is a demand deposit?
NCUA
Which organization manages and charters credit unions?
Mortgage broker
Which person or entity works with many different lenders to find the best loan for the customer?
A shopping mall
Which project would a life insurance company be most likely to finance?
Anyone who acts as a mortgage loan originator
Who needs to obtain a mortgage loan originator endorsement and register with the Nationwide Mortgage Licensing System and Registry?
A board of directors
Who or what entity directs the activities of credit unions?
They prefer financing larger projects, which inherently have more long-term security.
Why are life insurance companies less concerned with liquidity than long term security of an investment?