Finance 3

The minimum down payment for an FHA 203(b) loan is ________.

3.5%

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

An Assumption

Which of the following actions toward an appraiser would be considered proper?

Asking an appraiser to correct errors in the appraisal report

Cheyenne is selling the family farm via an installment contract. What is one advantage of selling the farm this way?

Cheyenne will pay less in capital gains taxes by receiving the proceeds from the sale over time, rather than in a lump sum.

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

Community Reinvestment Act

which of the following is NOT part of the Other Considerations section of the Loan Estimate?

Comparisons

Juans credit score is being pulled. Which of these actions would have a positive effect on his scores?

Credit accounts with low or no balances

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

Which of the following led to the 2007 financial crisis and negatively impacted investors that purchased properties in the early 2000s?

Falling Home Prices

Which of the following entities buys loans primarily through thrifts?

Freddie Mac

Harvey had a living trust, but when he died, some of his assets had to go through probate. What is likely reason?

He neglected to put those assets in the trust

Which of the following programs broke the normal 80/20 ratio rule is usually required as a loan-to-value and offered favorable interest rates?

Home Affordable Refinance Program (HARP)

Which type of real estate investment trust derives it's income from the rent or sale of property and interest dividends?

Hybrid REIT

Normal wages are considered when a lender is evaluating an applicants income. Which of the following must be true for overtime pay to be considered?

It must have been received regularly over the last two years

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

Barb is buying Kirk's property. Bob needs help with the down payment, and Kirk offers to supplement Barbs' bank loan with a second loan, allowing her to meet her lenders down payment requirements. Which finance instruments may be used for the agreement between Babs and Kirk?

Mortgage or deed of trust

which type of federally related lending transaction is covered under RESPA?

Mortgages and home equity credit lines

which interest rate do banks use to offer consumer loans?

Prime Rate

Which of the following types of residential dwellings do life insurance companies purchase from the secondary mortgage market?

Single-family on one lot

The FHA _________ program allows a borrower to refinance an FHA loan without verifying income or assets.

Streamline Refinance

Which agency sets the guidelines for qualified mortgages?

The Consumer Financial Protection Bureau

The federal SAFE Act required states to enact licensing and registration requirements related to loan originators, and created the Nationwide Mortgage Licensing System and Registry. Which act was Texas response to federal act?

The Texas SAFE Act

How is a loan assumption documented?

The buyer and seller both sign an assumption agreement

how many parties does a deed of trust involve?

Three: borrower, lender, and trustee

what is the trustees role when a deed of trust is used to secure property for a loan?

To hold legal title to the property on behalf of the beneficiary until the loan is repaid

Monica 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

To be eligible a ________, an applicant must have participated in farm or ranch management for at least three years.

USDA loan through the Farm Service Agency

The FHA Section 203(h) program assists ________ with an insured mortgage.

Victims of a presidentially declared disaster

Which government legislation established the Consumer Financial Protection Bureau?

Wall Street Reform and Consumer Protection Act (Dodd-Frank Act)

Brandon's home has been foreclosed on. He had an outstanding loan balance of $145,000, which he owed to his lender, XYZ Lending for a loan taken out in 2009. There's also a lien against the property recorded in 2014 for an unpaid student loan of $25,000, and a HELOC established in 2012 of $30,000, of which he'd used $10,000. If his foreclosure nets $150,000, how much will each creditor be paid?

XYZ Lending will receive $145,000, the HELOC lender will receive %5,000, and the lien holder for his student loan will not be repaid Priority of liens is dependent on date of recordation

Nadia uses a VA loan to buy a house for $125,000. She wants to buy the neighboring property, an empty lot, so she can improve the house using the extra land. The lot is for sale for $135,000. Can she use a VA loan for this purchase?

Yes, she should have partial entitlement left

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

a certificate of deposit

Vantagestar Ltd. Would like to construct a high-end condominium complex. Where will they likely go for financing this project?

a life insurance company

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 type of real estate investment trust derives a portion of it's income from interest dividends?

mortgage REIT

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

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

they perfect to personally monitor the loans they issue

what's the purpose of the fixed/adjustable rate note?

to convert the interest rate from fixed to adjustable

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

Chanel is buying a brand new home with a VA loan. She obtained a certificate of reasonable value. For how long is that CRV valid?

One year

Stacy is opening three savings accounts as part of her personal financial plan. What would be recommended option for finding low fees and higher interest rates?

Online banks

Which of the following actions toward an appraiser would be considered improper?

Asking an appraiser to remove information about adverse property conditions from an appraisal report