real estate finance exam

How's interest defined as it's related to a mortgage loan payment?

A fee paid to lenders for the use of their money

The EEM program insured by the FHA requires an energy consultant to provide the lender with a report listing recommended modifications for energy efficiency, an estimate of the cost for each recommendation, and ______.

An estimate of the energy savings that would result

To qualify as a Texas veteran, a person must ______.

Be at least 18 years old

Ralph and his wife are hoping to purchase their new home. Their lender is running their credit scores. How are Ralph and his wife's credit scores determined?

By running a credit report

Which of the following is included in HMDA data?

Census tract information

Myra has been offered a good deal on a new car, but it means adding another $200 to her monthly expenses. Her current car is boring, but it runs well. How can she decide if she should buy the new car?

Consider how the purchase compares to her personal values

Which of the following is a true statement about an IRA?

Contributions to a SEP IRA are pre-tax contributions. Contributions to most IRAs are pre-tax; the Roth IRA is the exception. Taxes on a Roth IRA are paid upfront and no taxes are owed at withdrawal.

Which of the following entities has the authority to place an equitable lien on a property?

Court order by judge

Which of the following is regulated by the Federal Housing Finance Agency?

Fannie Mae

What's the advantage of using separate savings accounts for each financial goal?

It helps you see progress toward savings goals.

Which type of support does the USDA Rural Development Program offer to its target audience of rural residents?

It offers direct loans, grants, and loan guarantees for housing and other rural needs, as well as advisor services to agricultural producers.

Ralph and Mort are neighbors. Ralph is selling, Mort is buying, and Ralph is offering a second loan to help Mort with his down payment, using a contract for deed. When Mort presents this idea to his lender, his lender balks. Why might that be?

Lenders don't like contract for deed arrangements.

Lewis is reviewing his Loan Estimate and notices under "Other Costs" that there are items listed that don't include an amount. What does this mean?

Lewis should ask his lender about it.

Life insurance companies are more concerned with long-term stability of investments than they are ___________.

Liquidity

Closing costs are itemized on page two of the Closing Disclosure, and all amounts are ______.

Listed according to who paid them: the borrower, seller, or other

According to RESPA, what must the lender give to the borrower at either the time of loan application or within three days following application?

Loan Estimate

Kate is looking over the document that provides the approximate loan-related costs, along with the loan's terms. What is Kate reviewing?

Loan Estimate

Denzel's loan payments have been reduced because his lender agreed to extend the amortization schedule stated on his note. This is the result of a ______.

Loan modification agreement

How much of a mutual savings bank's assets come from savings accounts?

More than 70%

Which of the following resources are extremely helpful when working with investors?

REIT analysts and bond rating agencies

FHA-insured loan programs cover all of the following EXCEPT ______.

Recreational vehicles

Kristoff got a bit behind on his mortgage and missed several payments. He and his lender devised a schedule that gives Kristoff an opportunity to make up those delinquent payments. What is this an example of?

Repayment plan

Which agency sets the guidelines for qualified mortgages?

The Consumer Financial Protection Bureau

Which of the following statements is true about the MIP on an FHA loan?

The FHA may adjust the percentage used to calculate MIP on FHA loans.

Who distributes the trust assets of a person who died?

The successor trustee With a trust, no probate is required because the trust survives the trust maker, and a successor trustee will manage or distribute assets in the trust.

Which of the following are ways a private loan company insulates themselves from the risk of lending funds to a borrower who has had problems securing them elsewhere?

They may charge higher interest, higher fees, and require the borrower provide collateral to secure the loan.

When appraiser Archie uses the sales comparison approach, at least how many comparables may be included in the URAR?

Three

Rhonda is purchasing a house from the Brookses. She has obtained financing, and her lender requires her to have title insurance. The company she selects conducts a title search. Why?

To ensure that the title to her new home is marketable The lender will require title insurance to protect both the lender and the buyer.

A quitclaim deed does which one of the following?

Transfers without warranty any interest or title the grantor has when conveying it. A quitclaim deed provides no warranties or covenants; it only guarantees that the grantor is transferring any interest or title he or she may have in the property.

The Federal Housing Administration is part of the ______.

U.S. Department of Housing and Urban Development

Which veteran loan program in Texas offers qualified veterans help with repairs on their current home?

Veterans Home Improvement Program

What is one disadvantage of a will over a trust?

Wills are made public; trusts are not. Wills are made part of the public record. Those who prefer to have the distribution of their assets handled privately opt for a trust.

A Treasury note is a Treasury security ______.

With a maturity term between two and 10 years

John sells his single-family home and purchases a new home for his family to reside in. Marcus owns a single-family home, but rents it out to a co-worker while he is on an extended two-year military tour overseas. Donald sells an apartment complex and purchases a new complex in a different part of the city. Which of these consumers is most likely to take advantage of a 1031 tax-deferred exchange?

Donald

The ______ clause protects the borrower's assets that aren't part of the voluntary lien from a deficiency judgment in case of foreclosure.

Exculpatory

Randall needs some new equipment for his ranching operation, and he needs a loan to purchase the equipment. When he approaches his local bank and applies for a Farm Credit System loan, how is the loan funded?

From the sale of Farm Credit System debt securities

Mike has had some financial problems and is considering borrowing from his retirement plan. Which of the following is a true statement?

He should consult with a financial expert before doing so.

Why did investors purchase CMOs prior to the 2007 financial crisis?

Housing price appreciation appeared to be a sure thing.

Morris still owes his lender for the financing obtained in purchasing his home. Several years later, Morris took out a home equity line of credit. This means that ______.

If Morris is foreclosed on, the home equity line of credit won't be paid until Morris's first loan is paid off

What type of value may consumers be interested in if they are looking for the potential rate of return?

Investment value

Which of the following best describes an equity real estate investment trust?

Invests in equity by owning income-producing property, such as malls, apartments, or office parks

FHA county loan limits are based on ______.

Median price for the area and property type The FHA sets limits for the amount of an FHA loan in each county based on the median home price for the area and the property type.

Who originates their own loans?

Mortgage bankers Mortgage bankers originate their own loans.

Which type of bond is used to pay for community improvements?

Municipal bond

Which HUD program is responsible for protecting individuals against discrimination in housing based membership in a protected class?

Office of Fair Housing and Equal Opportunity

When does PMI end?

Once the loan-to-value ratio reaches 78% of the original value.

A ______ is a mortgage-backed security issued by Freddie Mac.

Participation certificate

Which type of partnership may involve several mortgagors financing a multi-family dwelling?

Partnership among mortgagors

Rhoda is a first-time homebuyer. She has applied for a VA loan to buy a house from Phyllis. When the CRV values the home at less than the sale price, Phyllis refuses to come down on the sales price, so Rhoda must either ______ or find a different home to buy.

Pay the difference between the CRV and sales price in cash

The document that describes the loan amount and the terms for repaying and is attached to a security instrument is called the ______.

Promissory note