Missed Questions Round 3

Ken and Sue are purchasing a home but are short on the down payment required by their lender. Sue's mother offered to give them cash to help with the down payment. How much can Sue's mother give under current tax laws?

15k to Ken and 15 k

A qualified mortgage's loan term limit must be ______ or less.

30 years

Dorinda is an investor. She recently purchased shares in a tranche that holds mortgages and mortgage-backed securities. In what did she invest?

A CMO holds mortgages and mortgage-backed securities. These are organized into tranches from which investors can purchase shares.

Which of the following may a lender request to verify an applicant's bank deposit information?

Account statement

The Federal Housing Administration funds its mortgage insurance program ______.

By charging borrowers a mortgage insurance premium

Fatima is using a VA loan to purchase a home from Sue. Sue agrees to pay Fatima's closing costs. Which of the following statements is true?

Closing costs aren't considered a seller concession.

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

Community Reinvestment Act

What's the primary source of funds for commercial banks?

Demand Deposits

Percy is buying a home with an FHA loan. He uses the ______ to borrow enough money to cover the cost of replacing most of the windows in the home, which will improve its energy usage by 15%.

Energy Efficient Mortgage

From a secondary market player, Regional State Bank received an advance in exchange for collateral in the form or mortgages. Which entity likely issued this advance?

FHLB lends money, called advances, to member banks in exchange for collateral.

Which entity guarantees mortgage-backed securities which have the full support of the U.S. government?

Ginnie Mae

Brittany is a real estate licensee with a mortgage loan originator endorsement. When she acts as an MLO, the California Real Property Loan Law requires her to give her clients a disclosure that ______.

Informs the prospective borrower about the terms of the loan being offered

In California, how has state law modified the way the deed of trust works?

It creates a lien on the property, and the borrower, not the trustee, holds legal title.

In a deed of trust, who is the beneficiary?

Lender

Which is one of the benefits of the USDA loan program?

No down payment is required.

Analyzing spending habits allows you to evaluate the impact of a purchase in terms of ______.

Opportunity Cost

Information about how the lender will handle assumptions and late payments is included on ______ of the Loan Estimate.

Page three

Melanie is a buyer who has agreed to purchase Stan's property using a contract for deed. Who holds legal title to the property during the term of the loan?

Stan

Which of the following would the FDIC most likely not insure?

Stock certificates

Rules and regulations that protect consumers of financial services are now the responsibility of ______, which was created by the Dodd-Frank Act.

The Dodd-Frank Act created the CFPB to consolidate regulatory responsibility for consumer financial protection.

Zack and April are purchasing a home. They apply to three different lenders and review the Loan Estimates they receive. Each form includes a field identifying the National Mortgage Licensing System ID number for the lender. What is the act that requires this licensing identification to be available to consumers?

The Secure and Fair Enforcement for Mortgage Licensing Act (SAFE Act) requires that mortgage loan originators obtain a license that consumers can identify and research.

What's true about the draw period on a home equity line of credit?

The draw period varies.

Who holds the promissory note while it's being repaid?

The payee

Which of the following is true regarding value?

The principle of substitution means that people won't pay more for a property than they have to

Jacqueline found a ready, willing, and able buyer for her client's condo, with a sales price of $20,000 more than the asking price. However, the appraisal came in just under the asking price. Which number will the lender use to calculate the loan-to-value ratio?

The smaller number

Why are life insurance companies less concerned with liquidity than long term security of an investment?

They prefer financing larger projects, which inherently have more long-term security.

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

This is a project for a life insurance company because they prefer to be involved with large commercial projects.

How is title usually conveyed to the buyer during a foreclosure process?

Through a referee's deed

The purpose of a living expenses savings account is ______.

To hold extra living expenses when income is high, so that the money is "out of sight."

A trustee's sale has just occurred. What does the highest bidder receive?

Trustee's deed

Which party to the loan approval process evaluates the loan application, the supporting documentation and data, and the property appraisal in order to make an approval recommendation?

Underwriter