Real Estate Investments final
If the balance due on a block of mortgage loans amounts to $900,000 and the block is sold at a price of 95, the payment would amount to
855000
Which of the following types of technology could be used to allow the user to assumptions that support financial conclusion of commercial real estate cash flows.
ARGUS Valuation-DCF
Which of the following allows the users of Fannie Mae's Desktop Underwriter and Desktop Originator to identify potential eligibility and/or data issues as early in their processes as possible?
EarlyCheck
No regulations issued by the federal Security and Exchange Commission apply to real estate transactions. T or F
FALSE
which of the following restriction is true of the Equal Credit Opportunity Act?
No question can be asked of applicant regarding income not offered to help repay the loan
within retail leases the escalation clause ties an increase in rentals to
To increases in rentals to increases in the landlord's operating expenses
responsibility for raising the money to pay the federal governments bills belongs to the
United States treasury
a mortgage pool is best described
a block of loans serving as collateral for the issuance of mortgage-backed securities.
Which of the following would NOT be effective credit enhancement for a special purpose building loan?
a borrowers promise to repay the loan
the highest rated financial statements are. those prepared by a person holding
a certified public accountant designation
Ownership in a cooperative apartment project has not been as popular as ownership in a condominium because
a condo owner has a clear right to sell a unit to anyone whereas a co-op owner must have approval from other owners to sell.
a request for private mortgage insurance submitting all the following except
a debt to income ratio calculation
The risk covered by private mortgage insurance is the possibility
a default in the loan repayment
when introduced in the 1980s, computerized loan origination was primarily
a means of transmitting
credit scoring is
a number that shows a persons creditworthiness
Which of the following best describes the meaning of mortgage loan collateral?
a pledge of land as security for a debt.
All of the following are typical of a credit union's activities and limitations EXCEPT
a prohibition against making any mortgage loan
The type of loan with collateral lacking any income to repay the loan is
a raw land purchased loan
if a mortgage loan is paid off over a shorter term, the major advantage is
a reduction in the total cost of interest
loan limits as set each year by Fannie Mae/Freddie Mac apply to which of the following
all conforming loans
If a hazardous waste area is detected, responsibility for its clean-up falls on which of the following?
all parties involved with the property have full responsibility
A mortgage design that allows a lender to change the interest rate on a loan at periodic intervals during its term is called
an adjustable rate mortgage.
Commercial real estate financing generally requires at least two professional assessments an appraisal and which of the following:
an environmental site assessment
Automated underwriting systems introduced in the 1990s enabled computers to
analyze loan applications and grant approval in only a minute if justified
An index used for an adjustable rate mortgage must be
approved by the lenders regulatory authority
the financial statement that lists assets and liabilities with the difference between the two being the net worth is
balance sheet
in VA terminology, a property appraisal is called
certificate of reasonable value
If a mortgage-backed security is structured so that the cash flows are segmented and distributed to various classes of security holders in a sequence rather than a pro rata distribution, the security is called a
collateralized mortgage obligation
The real estate investment policies of the larger life insurance companies favor making the following type of loans
commercial construction loans
an example of "production related" income would be
commission
among many other things, sites on the internet make it possible for
consumers to have lower ordination fees
While the qualification of an applicant's income is important, other factors are relevant such as
credit worthiness of the applicant
All the following are true about lead poisoning EXCEPT
damage to the human body can only be caused by ingestion, not by inhaling.
In a sale of mortgage note, if the discount is increased, the price of the note is
decreased
fiscal policies of the federal government are those that
determine taxing and spending policies
In the income approach to value, the analysis that reduces future cash flows to a present worth is called
discount analysis
Institutions eligible to borrow from the Fed must pay for the funds so borrowed at the
discount rate of interest
Prudent refinancing of a mortgage loan requires examination of all the following EXCEPT
does refinancing physically affect the property
Of the following, which is the key advantage for a borrower with a graduated payment mortgage?
easier qualification because of lower initial monthly payments
chartering and regulating commercial banks comes under the authority of
either the comptroller of the currency or state banking commission
the primary purpose of the Community. Reinvestment Act is to
encourage regulated lenders to serve their local communities needs
The amount of a VA guaranty is called
entitlement
The Annual Percentage Rate (APR) as required to be disclosed in a Truth-in-Lending statement is the interest rate. T or F
false
Which of the following has been most important in making mortgage-backed securities a more attractive kind of investment?
federal agency underwriting of loan pools
the money supply in the United States is controlled by the
federal reserve bank board
For the secondary market to consider purchase of a commercial loan, all of the following conditions must be met EXCEPT
full insurance coverage against environmental loss
In a limited partnership, the general partner has which of the following responsibilities?
general management of the operation
An essential difference between purchase with a contract for deed and purchase with mortgage loan financing is that a contract for deed
grants legal title only after payment is made
all of the following are some of the more important principles of appraising except
history of tax valuations
the premium cost of a HUD/FHA insured commitment is paid for by the
home buyer/ borrower
The tax deductibility of home mortgage interest has increased the use of which of the following types of residential loans?
home equity revolving lines of credit
One of the protections offered a borrower by Federal Reserve regulations applicable to adjustable rate mortgages is
information must be given the borrower on the index used and the characteristics of adjustable rate mortgages.
The demand for borrowed money affects interest rates and is derived from all the following money needs except
insured savings deposits
Which of the following is true about a wraparound mortgage?
it is a junior claim to an existing mortgage.
Which of the following is most accurate in describing real property appraisals?
it is an estimate of value
which of the following best describes an installment sales contract (land contract)?
it is an installment sales agreement granting an equitable title to property.
All of the following are reasons an investor or analyst will transfer financial data to a standard form for analysis EXCEPT
it makes more compensable work
The type of foreclosure normally used when a regular mortgage is involved that requires court approval to act is called a
judicial foreclosure
Which of the title insurance policies runs with the mortgage note and is reduced by principal payments made on the note?
lenders policy
a common measure used to help determine the stability of an applicants income is
length of time on job
the purpose of an acceleration clause in a mortgage instrument is to
make the principal balance due payable in full in the event of default
The major source of mortgage money began to shift away from savings deposits and more towards
money raised in the financial markets through the sale of various mortgage-backed securities.
in qualifying for a residential mortgage loan, an applicants liabilities are most likely measured ass
monthly payment amounts
Which of the following legal instruments is used to pledge property as security for a mortgage loan?
mortgage
Which of the following would be classified as one of Fannie Mae's variety of programs community-oriented programs.
my community mortgage
The typical church facility loan intended for new construction or refinancing will require all of the following by a lender EXCEPT:
names of 15 largest annual donors for the past 3 years.
Which of the following loan types are allowed under the Truth-in-Lending Act to have a right to rescind?
owner occupied refinance
three kinds of legal descriptions are currently used except
perimeter measures (a. lot and block. b. metes and bounds. c. perimeter measures. d. geodetic or government.)
a unit of measure amounting to one percent of the loan amount is identified as
point
Which of the following situations would be most attractive to a lender considering a shopping center loan?
pre-leased space sufficient to cover debt service
of the following, all necessary for a sound farm loan except:
prompt closing
The purpose of a Phase I Site Assessment as defined by CERCLA is to
provide a possible defense for an innocent landowner against future liabilities for toxic waste cleanup.
One of the best ways to assure good title to property that is being transferred to another is to
purchase an owners title insurance policy
If an investor/institution acquires a block of mortgage loans to hold as an income producing asset, it is called
purchasing loans for its portfolio
The purpose of an escalation clause in an office building lease is to allow
rental adjustments to offset increased in operating costs as may be needed
The underlying purpose of the Real Estate Settlement Procedures Act is to
require adequate disclosure of settlement costs and requirements to a loan applicant/borrower.
in regard to assumptions, HUD/FHA loans originated after 12/15/89
require formal assumption only
in a cost approach to value analysis, all of the following kinds of depreciation may be deducted EXCEPT
residual (a.residual. b. physical. c. functional. d. external.)
a percentage lease is most likely to be used when leaving
retail store space to a merchant
The type of loan pricing that rates the probability of default with corresponding price adjustments is called
risk based pricing
usury laws are best described
state laws that limit permissible interest rates
The Real Estate Settlement Procedures Act prohibits or places limits on all of the following EXCEPT
the amount paid for a loan origination fee
In mortgage lending, the word "hypothecate" means
the borrower remains in possession of the property while it is pledged as collateral for a loan
As a procedure used in real estate transactions, recording determines priority of claim by which of the following?
the date and time the instrument is recorded
The new HUD-1 Settlement Statement also has a section that discloses key loan terms. This includes each of the following EXCEPT?
the final loan-to-value ratio
if a bond is classed as "tax exempt" it means
the holder of the bond pays no income tax on the interest earned from the bond.
Which of the following is NOT a criteria for determining whether or not an area is classed as a wetland?
the land must be federal or state owned
the ways rights to real property are owned and conveyed is determined primarily by
the laws of each state
of the following, the best description of the primary market is
the loan origination market
the regulatory agency handling savings association is
the office of thrift supervision
Shares of common stock in a corporation represent which of the following?
the ownership interest in the corporation
in finance terminology, secondary market investors do not "loan" money, they fund mortgage lending through
the purchase of loans from orginators
the discount rate of interest is best described as
the rate charged by the Federal Reserve Bank to eligible depository institutions
the farm credit system obtains its money for making loans though
the sale of various system wide securities
All of the following are true of savings banks EXCEPT
they are limited to state charters only
as used in construction lending, the intention of a takeout commitment is
to assure the construction lender that its loan will be paid off whether or not the building is sold.
one of the major unresolved problems resulting from the confusion of environmental laws and regulations is to define the proper rights of a landowner who loses partial usage of the land but retains good title to the property. T or F
true
Since 1970 the three government-sponsored enterprises have come to dominate the market place for conforming loans that had two primary parameters that made them readily marketable that include uniform documentation and:
uniform loan qualification strictures
the least amount of management needed to handle rental space may be found
warehouse
