Real Estate Finance Final

A borrower must provide employment status for the past:

2 years

In a foreclosure under a Deed of Trust the Notice of Sale must be published in a newspaper for:

3 weeks

Bankruptcies must be reported if they have occurred within the past:

7 years

A clause in a financial instrument that limits a borrower's right to transfer the property without the lender's permission is called a(n):

alienation clause.

Under the TRID Rule, the Loan Estimate must provide the: name and address of the creditor. address of the property (including the zip code) that will secure the financing. date the Loan Estimate is mailed or delivered to the consumer. all of the above.

all

Usury is: an interest payment in excess of the legally permitted rate. a medieval form of slavery. a person who has a financial trust. none of the above.

an interest payment in excess of the legally permitted rate.

Mortgage bankers/mortgage companies: both originate and loan funds. act only as "go-betweens." are part of the secondary market only. none of the above.

both originate and loan funds.

An investment is said to be liquid when it: can be readily sold. is worthless. is guaranteed by the government. is difficult to sell.

can be readily sold.

The type of lending institutions that focus on short-term business investments and have mostly short-term funds are: S&Ls. commercial banks. life insurance companies. mortgage companies.

commercial banks.

As per the TRID Rule, if a creditor provides a corrected Loan Estimate, how long of a new waiting period before consummation of the loan is required? 24 hours 48 hours 3 days 7 days

3days

How many hours of continuing education must all MLOs complete annually? 45 20 12 8

8

Private mortgage insurance is required on loans that exceed what percentage of the value of a property? 20% 50% 80% None of the above

80

Credit unions: are not allowed to make real estate loans. have a relatively small overall share of the mortgage lending market. are never allowed to merge with other credit unions. all of the above.

have a relatively small overall share of the mortgage lending market.

The Government National Mortgage Association (GNMA), or "Ginnie Mae": only deals with agricultural loans. is a wholly owned government corporation. is considered a lender of last resort. is part of the Department of Justice.

is a wholly owned government corporation.

A sale where the lender accepts less than the amount owed on the existing debt is:

known as a "short sale."

A Notice of Default and Election to Sell is prepared by trustee for the benefit of the: tenant. sheriff. borrower. lender

lender

Doing accounting necessary for a loan is known as: loan servicing. loan warehousing. arbitrage. marking to market.

loan servicing.

The primary market is made up of: first-time homebuyers. federal agencies. local lending institutions. none of the above.

local lending institutions.

A credit report is:

paid for at the time of application.

Money market funds are: the same as mutual funds. private noninsured investment accounts. held in the lender's portfolio. none of the above.

private noninsured investment accounts.

A scheme in which a recently acquired property is resold for a considerable profit with an artificially inflated value, often as the result of collusion with an appraiser is known as: property flipping. leverage. ballooning.

property flipping.

Institutions in the Farm Credit System are regulated and examined by: FNMA. the Farm Credit Administration. FHLMC. all of the above.

the Farm Credit Administration.

All of the following are true regarding a Notice of Sale, except:

the notice must be court-ordered.

Collateralized mortgage securities are separated into different classes called: shelters. trenches. tranches. none of the above.

tranches

The seller in a real estate land contract is known as the: pawn. vendor. vendee. none of the above.

vendor

Loans that are made based on an owner's equity in real property are known as: investment quality loans. qualified loans. equity loans. unqualified loans.

equity loans.

The first step in the loan process is:

filling out the loan application.

While ethics is what is right: it has nothing to do with values. government laws set minimum standards of behavior. it does not apply in real estate. ethics is illegal in California.

government laws set minimum standards of behavior.

FNMA and FHLMC are: government agencies. primary lenders. funded by the U.S. Treasury. government-chartered private lenders.

government-chartered private lenders.

What agency exists solely to provide a secondary market for farm mortgages? "Farmer Mac" "Freddie Mac" "Sally Mae" "Fannie Mae"

"Farmer Mac"

A foreclosure that does not have to be taken to court is called: nonjudicial. nonrecurring. nonamortized. all of the above.

nonjudicial

Mortgage-related securities: are easily bought and sold. are issued by participants in the secondary market. have real estate mortgages as their collateral. all of the above.

All of the above

Predatory loan practices include: fraud. usury. deception. all of the above.

All of the above

Prior to getting licensed by the NMLS all applicants must: complete 20 hours of pre-licensing education approved by NMLS. pass a 125 question national Uniform state test (UST). provide fingerprints for a FBI criminal background check. all of the above.

All of the above

All state licensed MLOs must meet the following standards: be at least 21 years old. have a minimum of two years of experience in residential real estate lending. C. never have had a felony conviction in the past seven years. D. have never had a bankruptcy.

C

Under the TRID Rule, the Loan Estimate combines the: Good Faith Estimate and the initial Truth-in-Lending Disclosure. Good Faith Estimate and the final Truth-in-Lending Disclosure. Good Faith Estimate and the HUD-1. HUD-1 and the final Truth in Lending Disclosure.

Good Faith Estimate and the initial Truth-in-Lending Disclosure.

Who is responsible for supervising the Truth-in-Lending Law? The Federal Bureau of Investigation (FBI) The Consumer Financial Protection Bureau (CFPB) The United States Treasury The United States Attorney General

The Consumer Financial Protection Bureau (CFPB)

A scheme where the down payment is actually borrowed or carried as a second mortgage by the seller but never documented in the purchase agreement, escrow instructions, or recorded is known as: an air loan. leverage. a silent second. a disappearing second.

a silent second.

All licensed/registered MLOs are issued: a unique identifier number. a tax identification number. a picture ID card. all of the above.

a unique identifier number.

In a seller's market: supply exceeds demand. demand exceeds supply. home prices decline. none of the above.

demand exceeds supply.

The prime rate is the: rate of interest charged by the Fed to the banks. interest rate at which banks lend balances at the Fed to each other. lowest interest rate a bank charges its best customers. the interest rate the Fed charges the U.S. Treasury.

lowest interest rate a bank charges its best customers.

In a promissory note, the borrower is called the: payee. maker. beneficiary. none of the above.

maker

The intentional misrepresentation or omission of material facts by applicants or others to improperly influence a mortgage loan lender is known as: an air loan. mortgage fraud. property flipping. consumerism

mortgage fraud.

Regulation Z: allows the right of rescission. requires that a consumer be provided with the annual percentage rate. requires proper disclosure of all finance terms in advertising. none of the above.

none

An unincorporated association of real estate investors managed by a trustee is a:

real estate investment trust.

Redlining is: refusal to lend in certain neighborhoods. not lending to bad credit customers. not lending on insufficient collateral. all of the above.

refusal to lend in certain neighborhoods.

FHLMC (Freddie Mac) is an example of a: secondary market participant. primary market only participant. federal agency lender open only to veterans. none of the above.

secondary market participant.

The availability of funds in the primary market depends on the existence of the: secondary market. stock market. commodities market. foreign exchange market.

secondary market.