Texas Real Estate Finance
5 What type of financial institution is designed to act as a depository for funds and as a lender for commercial activities - often short-term loans?
A commercial bank 283
1 What is a valid instrument for transferring property from a seller to a buyer?
A deed General Warranty, Special Warranty, and quitclaim are three types of deeds.
1 A life estate lasts only as long as
A life estate lasts only as long as the life of the owner or to some other designated person
1 What connects a person who owns a property with the property itself?
A title
3 The Truth in Lending Act must disclose what terms?
All financial charges and the APR of the loan
3 What does the Mortgage Credit Certificate (MCC) Program do?
Allows qualified homebuyers to take a portion of the annual interest paid on the mortgage as a tax credit each year they occupy the home as their principal residence
1 What includes a statement of the status of all recorded liens and encumbrances?
An abstract of title
4 What is the FNMA guideline that references Private Mortgage Insurance (PMI)?
Loans with a higher than 80% LTV require private mortgage insurance.
5 What type of loans usually run ten years, or sometimes longer, depending on how permanently the home is attached to the property?
Manufactured housing loans 283
5 Mutual savings banks are primarily locate din what part of the country?
Northeast 286
1 A historical summary of a property's title is called?
An abstract of title is a historical summary of a property's title.
3 Regulation Z applies to what type of properties?
Applies to a loan secured by a residence
4 Name four Freddie Mac initiatives that help consumers.
CreditSmart, Get the Facts, Spanish Language mortgage documents, and e-bus are all Freddie Mac initiatives to help consumers
4 What automated underwriting systems does Fannie Mae have available for users, and for whom are they designed?
Desktop Underwriter (DU) designed for lenders Desktop Originator (DO) designed for brokers and correspondents.
2 What is the name of the lowest rate a bank pays to borrow money?
Discount Rate
5 What are three types of real estate trusts?
Equity trusts Mortgage Trust Hybrid Trusts 287
1 When a tenant wrongfully remains without the landlord's consent after the expiration of the lease, this is called?
Estate at sufferance exists when a tenant wrongfully remains without the landlord's consent after the expiration of a lease.
1 What act established two new federal deposit insurance funds to be managed by the Federal Deposit Insurance Corporation?
FIRREA
1 What act was passed to deal with the widespread failure of thrift institutions in the 1980s?
FIRREA
4 Freddie Mac supports new construction of multifamily properties that offer affordable rents to whom?
Families with low and very low incomes
4 What does FNMA stand for?
Fannie Mae
4 Farmer Mac provides liquidity and lending capacity to what type of lenders?
Farmer Mac provides liquidity and lending capacity to agricultural mortgage lenders.
3 Name three members of the Farm Credit system.
Federal Farm Credit Banks Funding Corporation Farm Credit System Financial Assistance Corporation Federal Agricultural Mortgage Corporation
2 Banks may also borrow from other banks. The interest rate that banks pay other banks is called the: a Discount rate b Prime rate c Federal Funds rate
Federal Funds Rate
5 A country that issues bonds to fund a new high school is issuing which type of bonds?
General Obligation Bonds (GO Bond) 289
1 What type of deed offers the most complete warranties about the quality of the property and is the most attractive deed from the purchaser's perspective?
General Warranty Deed
4 Who are the three important players in the secondary mortgage market?
Ginnie Mae Fannie Mae Freddie Mac
4 What is the best description of a nonconforming loan?
It does not meet Fannie Mae Qualifying guidelines
4 What mortgage backed security has the security holder receiving payments of both principal and interest, whether or not it has been collected?
It is called a fully modified pass - through security.
5 Who regulates federally chartered savings institutions
Office of Thrift Supervision 284
5 What type of lenders have no formal structure but are NOT exempt from usury law?
Private Parties 286
3 Explain HUD's Good Neighbor Next Door home purchase program.
Program for law enforcement officers, pre-kindergarten through 12th grade teachers, and firefighters / emergency medical technicians, HUD offers a discount of 50% from the list price of a home. in return, the buyer must commit to live in the property for 36 months as their sole residence.
3 Which did the Colonias Fair Land Sales Act do?
Protects those who must rely on contracts for deed to finance property by requiring developers to record the contract and counties to keep a record of contracts for deed. It also requires developers to provide a statement of available services, such as water, wastewater, and electricity, and whether the property is located in a floodplain.
5 An individual invested in real estate trust what will get income from mortgage interest, loan origination fees, and profits from buying and selling mortgages. This individual invested in what kind of trust?
REMT 287
1 What agency insures deposits in saving institutions?
SAIF insures deposits in savings institutions
1 Undisclosed heirs are covered by what type of title insurance policy?
Standard title insurance policy
3 Which entity provides loans for real estate and operating costs for farmers, but does not accept deposits?
The Farm Credit System
3 What act requires lenders to report statistical information each year to ensure that lenders are not restricting loans to certain individuals or neighborhoods?
The Home Mortgage Disclosure Act (HMDA)
3 If a new subdivision is marketed out of state - also known as interstate, what act would govern such marketing?
The Interstate Land Sales Full Disclosure Act
1 What Texas agency regulates home equity loans, secondary mortgages, retail credit accounts, and signature loans?
The OCCC
2 What was established in 1863 as a bureau of the U.S. Treasury?
The Office of the Comptroller of Currency (OCC)
3 Which act was the first law that prohibited discrimination in housing based on race, color, religion, or national origin?
The civil Rights Act of 1968
3 Under ECOA, how long does the lender have to inform an applicant who was rejected of the reasons for the denial? May the lender ask about the applicants plans for having or raising children?
The lender has 30 days to inform the applicant for the reason of denial and the lender may not ask about the applicant's plans for having or raising children.
2 What is it called when banks borrow from the Federal Reserve?
The rate they charge is called the discount rate
5 In Texas, What is the usury maximum for loans made by institutional lenders?
They are not subject to usury laws. 283
1 Why are the savings of individuals important to the economy
They become the eventual source of funds for borrowing.
4 What was Ginnie Mae's basic mission when established?
To create and operate a mortgage-backed security program
1 When does supply and demand usually improve for a buyer?
When the economy is in a recession
4 Which type of security guarantees mortgage-backed bonds that are secured by eligible agricultural mortgage loans? a AgVantage Bonds b AgBearer Bonds c AgLoan Bonds d AgSecure Bonds
a AgVantage Bonds
3 In 1988, two categories of protected classes were added to those protected classes already covered under the Fair Housing Act for a total of seven federally - protected classes. Which of the following classes were added? a Familial Status and Handicapped b Handicapped and Race c Race and National Origin d Religion and Familial Status
a Familial Status and Handicapped
2 FDIC stands for: a Federal Deposit Insurance Corporation b Federal Drug Impedement Council c Financial Derivatives Investment Council d Federal Deposit Investment Corporation
a Federal Deposit insurance Corporation
1 The Texas agency that ensures that the banks, savings institutions, consumer credit grantors, and other regulated entities chartered or licensed under state law operate as sound and responsible institutions is called? a Finance Commission of Texas b Texas Board of Banking c The Department of Savings and Mortgage Lending d Office of Consumer Credit Commissioner
a Finance Commission of Texas
4 The Government National Mortgage Association is also known as: a Ginnie Mae b The Federal Reserve c The US Treasury d None of the Above
a Ginnie Mae
3 What was the first law to prohibit discrimination in housing based on race? a The Civil Rights Act of 1866 b The Civil Rights Act of 1968 c The Fair Housing Act of 1964 d The Housing and Community Development Act of 1974
a The Civil Rights Act of 1866
2 Which of the following limits the effect a bank or thrift institution failure has on our nation's economy and the financial system? a The Federal Deposit Insurance Corporation b The Office of Comptroller of Currency c The Securities and Exchange Commission d The US Treasury
a The Federal Deposit Insurance Corporation
4 a REMIC a can be a corporation, trust, association, or partnership b must be chartered as a limited liability company c can invest in any type of capital asset d can only deal in "swapped" property
a can be a corporation, trust, association, or partnership
4 Under Freddie Mac guidelines, a if the borrower has 5 percent down payment, a seller can contribute up to percent of the closing cost b if the borrower has 2 percent down payment, a seller can contribute up to 10 percent of the closing costs c if the borrower has 20 percent down payment, a seller can contribute up to 30 percent of the closing costs. d If the borrower has 10 percent down payment, a seller can contribute up to 10 percent of the closing costs.
a if the borrower has a 5 percent down payment, a seller can contribute up to 3 percent of the closing costs.
2 The department of the Treasury is organized into two major components the Departmental offices and the: a operating bureaus b task force c field agents d none of the above
a operating bureaus
A group of two or more people who unite their resources for the purpose of making and operating an investment is called what?
a syndicate 288
1 What does a lender look for when qualifying a borrower for a mortgage loan?
an analysis of whether the borrower's income, cash resources, creditworthiness, net worth, and employment stability to meet the lender's standards.
3 Up to what size tax credit is available to qualified homebuyers through the Mortgage Credit Certificate Program? a $5000 b $2000 c $2500 d $500
b $2000
3 How many Farm Loan Banks were established by the Federal Farm Loan Act of 1916? a 1 b 12 c 3 d None
b 12
4 Under Fannie Mae guidelines, if the borrower has a 5-percent down payment, how much can a seller contribute to closing costs? a 100% b 3% c 5% d 20%
b 3%
4 A borrower's payment history can make up to this percent of their credit score: a 30% b 35% c 50% d 20%
b 35%
3 What is ECOA a A kind of title policy b A law prohibiting lending discrimination c A state environmental Agency d A federal lending Agency
b A law prohibiting lending discrimination
3 Which of the following groups of people would be eligible for the Homes for Texas Heroes Program? a College Professors b Active Military Personnel c Social Workers d Public Security Officers
b Active Military Personnel
3 What Act, in 1974, added sex to the list of prohibited discriminations under the Fair Housing Act? a Housing and Urban Development (HID) b Housing and Community Development Act c The Clayton Act amendment d Real Estate Settlement Procedures Act (RESPA)
b Housing and Community Development Act
Which of these is not used by lenders to estimate an applicant's ability to fulfill a loan obligation? a Income ration b Loan - to - Value ratio c Debt ratio d Housing plus debt ratio
b Loan - to - Value ratio
1 The process of assessing the lender's risk in giving a loan is called: a Pre-qualification b Loan underwriting c proration d none of the above
b Loan underwriting
2 The rate that banks borrow from the Fed with is called the discount rate. The rate that banks charge their customers is called the: a Main rate b Prime rate c Normal rate d True rate
b Prime rate
2 Banks are required to keep a certain amount of money in reserve. If their reserves are getting low, they may borrow money from: a The FDIC b The Federal Reserve c The FHLB d None of the above
b The Federal Reserve
1 What is the program that licenses, regulates, and examines the trust- and insurance - funded prepaid funeral contract sellers to ensure compliance with the Finance and Administrative Codes? a The Funeral Control Contract Program b The Prepaid Funeral Contract Program c The Advanced Directive Payment program d The repurchase Funeral Credit Program
b The prepaid Funeral Contract program
4 Under Fannie Mae Guidelines a any loan made that has a down payment of greater than 30 percent must carry private mortgage insurance. b Any loan made that has a loan to value ratio of more than 80 percent must carry private mortgage insurance. c a borrower's monthly debt payments must exceed 28 percent of the monthly income. d loan limits are adjusted on a 10 year market cycle.
b any loan made that has a loan to value ratio of more than 80 percent must carry private mortgage insurance.
2 If the Fed wants to release more money into the economy it would?
buy securities using an open market operation
3 How long des a person who believes he or she has been discriminated against have to file a complaint with HUD? a 6 months b 2 years c 1 year d 5 years
c 1 year
4 What is the range for FICO scores? a 0-10 b Poor- Average - Excellent c 300-900 d A-D
c 300-900
3 The Federal Farm Loan Act of 1916 allows Farm Loan Association members to borrow ____ of the value of their land and _____ of the value of improvements. a 20%; 50% b 30%; 50% c 50%; 20% d 50%; 30%
c 50%; 20%
1 All of the following are common ways for a buyer to get assurance that a title is good except which? a Abstract of title b Deed c Certificate of authenticity d Title insurance
c Certificate of authenticity
1 When a tenant wrongfully remains without the landlord's consent after the expiration of the lease what is the best description of the situation? a Estate in duress b Estate at will c Estate at sufferance d Estate at risk
c Estate at sufferance
2 FHLB stands for: a Fair Housing and Loan Bureau b Free Housing From Little Banks c Federal Home Loan Bank System d Federal Housing Liason Bureau
c Federal Home Loan Bank System
1 The act of pooling and investing the money of many people is called: a Hoarding b Stockpiling c Intermediation d Prorating
c Intermediation
2 What is the most viable way the Federal Reserve System (the Fed) influences real estate finance? a Printing currency b Selling securities c Manipulating interest rates d Changing reserve requirements
c Manipulating interest rates
1 The borrower is also called the: a Mortgagee b Lendor c Mortgagor d None of the above
c Mortgagor
2 Which agency manages the debt of the federal government? a United States Commerce b United States Federal Reserve c United States Federal Trust d United States Treasury
c United States Federal Trust
2 What is the most viable way the Federal Reserve System (the Fed) influences real estate finance? a Printing currency b Selling securities c manipulating interest rates d Changing reserve requirements
c manipulating interest rates
4 Why was Freddie Mac created and what is its mission?
created in 1971 to develop secondary market for conventional loans. Mission is to provide stability, affordability and opportunity to the housing market by putting homeownership within reach for minority populations and making rental housing more affordable.
4 What is the minimum pool size for manufactured homes under Ginnie Mae II MBS? a $35000 b $3.500 c $250,000 d $350,000
d $350,000
1 Which of the following are banks prohibited from doing with high-cost mortgages? a Issue a prepayment penalty b implement a balloon payment c Issue a late fee of more than 4% d All of the above
d All of the above
4 Under Freddie Mac guidelines, a if the borrower has 5 percent down payment, a seller can contribute up to 2 percent of the closing cost b if the borrower has 2 percent down payment, a seller can contribute up to 10 percent of the closing costs c if the borrower has 20 percent down payment, a seller can contribute up to 30 percent of the closing costs. d If the borrower has 10 percent down payment, a seller can contribute up to 6 percent of the closing costs.
d If the borrower has 10 percent down payment, a seller can contribute up to 6 percent of the closing costs.
2 OCC stands for: a Organization for Consumer Concerns b Office of the City Council c Office of the Chief Commissioner d Office of the Comptroller of the Currency
d Office of the Comptroller of the Currency
1 Which Board is responsible to license, certify, and regulate real estate appraisers in Texas under state and federal laws? a Texas Appraiser Review and Control Board (TARCB) b Texas Appraisal License Board (TALB) c Texas Fair Trade Commission (TFTC) d Texas Appraiser Licensing and Certification Board (TALCB)
d Texas Appraiser Licensing and Certification Board (TALCB)
3 Which Act ushered in the Farm Credit System (FCS)? a The National Farm Credit Act b The Federal Land Act c The Agriculture Loan Act d The Federal Farm Loan Act
d The Federal Farm Loan Act
4 What type of credit report uses rental and utility payments to create a "report card" that grades users on a scale from A to D? a The Holland Credit Report b Graded Response Report c Credit Grade Report d The Payment Reporting Builds Credit
d The Payment Reporting Builds Credit
1 When the people withdraw their money from savings accounts and invest their funds directly in government notes or money market funds, this is known as?
disintermediation
3 List two items Regulation Z covers and does not cover?
does not apply to commercial loans, includes the right to rescind and does not apply to advertising and agricultural loans over $25,000 Does not apply to disclosure of costs, right to rescind the transaction, advertising offers, and noncompliance penalties.
4 Does GNMA purchase mortgages or guarantee payments?
guarantees FHA VA payments will be made monthly
5 Are mortgage bankers considered institutional or non institutional lenders?
institutional lenders 286
3 What is the purpose of the Farm Credit System?
serves the unique financial needs of farmers, ranchers, producers and harvesters of agricultural products, and rural homeowners by providing loans for real estate, operating costs, and rural homes.
1 Lender's and owner's are what type of policies?
title insurance policies.
4 Why did the federal government establish Fannie Mae?
to purchase FHA mortgages