REP: CH 10 REVIEW Q'S

When advertising a property for sale, what statement would place the broker in violation of the federal Truth-in-Lending Act?

"3-bedroom, 2 bath, large lot, with 10% down; total price $225,000"

If economic conditions create a tight money market, what would arise concerning offers to purchase real property?

- there will be more cash offers - land contracts of sale will see a greater use - there will be more offers to assume the seller's loan

The maximum commission that can be charged by a licensee for negotiating a second trust deed of $7,500 for a period of 5 years is:

15%

The broker negotiating the loan must keep a signed copy of the Mortgage Loan Disclosure Statement for how many years?

3

What fees may NOT be included in the finance charge according to the federal Truth-in-Lending Act?

Appraisal fees (Interest, Finder's fees, and Buyer's points are included)

What lenders would be most likely to loan funds for construction costs for a single-family residence?

Commercial bank

All consumers are given an equal chance to obtain credit through the:

Equal Credit Opportunity Act

What does not participate in the secondary market for mortgage loans?

FHA

Which real estate lender has lending policies characterized by long-term financing, few construction loans, larger loans preferred, loans that usually are not serviced?

Insurance companies

Who is not considered to be institutional lenders?

Mortgage companies

A federal law requiring disclosure to borrowers of closing costs and procedures by means of pamphlet and forms approved by the U.S. Department of Housing and Urban Development (HUD) is called:

R.E.S.P.A.

What is the main purpose of RESPA?

To require that disclosures be made by lenders that make loans on 1-to-4 unit dwellings

What would be exempt from Regulation Z?

a loan for agricultural purposes made by a federally chartered bank

The Real Estate Settlement Procedures Act (RESPA) applies to what?

a loan secured by a first trust deed securing real estate upon which there is one-to-four family residential dwelling

In the context of financing real property, the term "ware housing" most closely refers to:

a mortgage banker collecting loans before selling them

The original purpose of the Federal National Mortgage Association (FNMA) was:

buying and selling FHA-insured and VA-guaranteed loans in the secondary market

Regulation Z requires that consumers be informed of credit terms by the:

creditor

The Truth-In-Lending Act (Regulation Z) requires:

creditors to disclose credit terms so consumers can make comparisons

The process of gradually relaxing regulatory restraint is called:

deregulation

In advertising the availability of real estate loans, using any of the following phrases (5% down payment, 360 payments, 30-year loans) by itself would be a violation of the federal Truth-in-Lending Act's Regulation Z except:

easy terms available

Life insurance companies that do not deal with mortgagors or trustors usually make real estate mortgage loans to purchase indirectly through ______, for which they pay a loan preparation and service fee.

mortgage companies

If only the APR is disclosed in an advertisement for property, which additional disclosures must be made?

no other disclosures are required

On loans governed by RESPA, a buyer or seller may legally be charged for all of the following (preparation of the loan documents, conducting an appraisal prior to the loan, preparation of credit reports) except:

preparation of the Uniform Settlement Statement

Most junior loans negotiated in today's market are secured from the following source:

private lenders

The use of property's location to deny financing is known as:

redlining

The main purpose of the federal Truth-in-Lending Act is to:

require disclosure of credit terms so consumers can compare loans

The Federal Real Estate Settlement Procedure Act of 1974 (RESPA) pertains to:

residential properties with 1-to-4 units

The most effective method for the Federal Reserve to create a "tight" money market is to:

sell gov't bonds and raise the discount rate

When a commercial bank wants to achieve liquidity and marketability on their loans, what would probably be made?

short-term loans

What is the best description of the term "mortgage yield"?

the effective return of interest to the investor

In the field of real estate financing, the term "secondary mortgage market" usually refers to:

the resale or transfer of existing trust deed loans

The type of lenders having the greatest percentage of its assets invested in residential real estate mortgages are:

thrifts

An economic situation in which the supply of money is limited and the demand for money is high, as evidenced by high interest rates is:

tight money

What is the process of evaluating a borrower's risk factors before the lender will make a loan?

underwriting

The process of assembling into one package a number of mortgage loans, prior to selling them to an investor is:

warehousing