Cade Hyatt Real Estate Finance

You do a listing presentation to a potential client over lunch at a nice restaurant. How much of your meal cost is considered tax deductible?

50%

Which range of credit scores represents subprime borrowers?

580-669

With a VA loan, the borrower must receive a certificate of eligibility. What must the property receive?

A certificate of reasonable value(CRV)

The Farm Credit System is ______.

A government-sponsored enterprise

A system for managing your money when income is unreliable allocates ______ to each expense or savings goal.

A percentage of all income

What is a carryback loan?

A second loan financed by the seller

Which type of loan's interest rate fluctuates with the economic index to which it's tied?

Adjustable Rate

Paulina is buying her first house. Which of these costs will she NOT be expected to pay?

Agent's Commission

Which of the following individuals would qualify to purchase a home under the Good Neighbor Program?

An emergency medical technician

Because the buyer traditionally pays for this, page three of the Loan Estimate includes information about a consumer's right to receive a copy of the ______ from the lender.

Appraisal

Which of the following actions toward an appraiser would be considered improper?

Asking an appraiser to remove information about adverse property conditions from an appraisal report

Which event led to the establishment of the FDIC?

Bank failures during the Great Depression

Which of these is an essential rule for a licensee's finances?

Business and personal accounts should be maintained separately.

Which of the following VA programs requires a credit check, new appraisal, and income verification?

Cash Out Refinance

Which of these assets would be considered the most liquid, according to financial analysts?

Cash on hand

In a loan to purchase which of the following property types is NOT eligible for purchase by Fannie Mae?

Commercial Space

Which of the following actions did the Federal Reserve take in response to the 2007 financial crisis?

Decreased Rates

The U.S. ______ is the federal agency with the mission to create strong, sustainable, inclusive communities and quality affordable homes for all.

Department of Housing and Urban Development

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

Exculpatory

Conventional loans from large commercial banks are the primary target for which secondary market player?

Fannie Mae

Matt owns Pic Bar Ranch and is looking to purchase the adjacent ranch. When he talked to his local lender, the lender offered Matt a loan that will likely be backed by _____.

Farmer Mac

The rate at which a bank can obtain an overnight loan from another bank without providing collateral is called the ______ rate.

Federal Funds

With what type of loan do the principal and interest payments remain the same for the life of the loan?

Fixed-Rate

Two examples of loan adjustments or modifications are recasting and ______.

Forbearance

One of the following entities is primarily a secondary market player. Which one?

Freddie Mac

Ann went into business with Burt and Cindy and called their entity ABC Realty. They're a legal business structure but there are no state requirements to register their business. A contract between the three specifies the terms of their ownership and contributions. What business structure is this?

General Partnership

How and when does a contractor performing work associated with a 203(k) loan receive funds from the lender?

Half is received up front and the other half after the work is completed and approved

Which is a requirement for veterans to use the VA's Specially Adapted Housing grant?

Have permanent and total service-connected disability

Jarod has obtained an FHA loan for which he pays an annual mortgage insurance premium. How will he likely make this payment?

He will pay 1/12 of it monthly with his mortgage payment.

A loan made based on the amount of equity available in an person's home or property is called a ______.

Home Equity Loan

Read through each of the following pieces of information about buyers' debt obligations and determine which one will qualify for an FHA loan based on the qualifying ratios.

Housing ratio of 31%, Total debt obligations of 40%

Historically, what do property values tend to do over short periods of time?

Increase and Decrease

Jessica hasn't paid the roofing company that replaced the roof on her home. The contractor placed a mechanic's lien on her property, which is a(n) ______ lien.

Involuntary and specific

What is the purpose of a lifting clause?

It allows a borrower to refinance a first mortgage without affecting its lien position even when a junior mortgage is in place.

Armitage Bank is placing the Kellermans in default for failure to pay their homeowners insurance. The lender is concerned about property damage and ______.

Judgement Liens

Tonia is buying a new home. She has a down payment of $30,000 and will obtain a $250,000 mortgage from a local bank to make up the remainder of the purchase price. What is this an example of?

Leveraging

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

The lender, the employer, and the ______ all complete parts of the request for verification of employment form.

Loan Applicant

Kendra is purchasing a home and is ready to find a lender who will give her terms that she can afford. What lender-issued document can she use to compare loans and find the one that will best meet her needs?

Loan Estimate

What effect do low interest rates have on borrowing?

Makes borrowing less expensive

When an adjustable rate mortgage (ARM) makes its initial adjustment, it does so to its fully indexed rate. What makes up the fully indexed rate?

Margin plus index

In the secondary market, how are mortgages grouped together and sold?

Mortgage-backed securities(MBS)

A beneficiary, trustor, and trustee are the parties involved when the finance instrument is a ______.

Note with a Deed of Trust

Iris is planning to purchase her first home. Based on what you know about the nature of real estate finance in our country, which approach is she most likely to use?

Obtaining a loan to purchase the home

Where does a veteran have to live to qualify for the Native American Direct Loan?

On Federal Trust Land

Joe works for a life insurance company that funds commercial investment projects and often insures these projects by insisting on an equity position. What type of financing does this describe?

Participation

Which of the following made mortgages attractive investments in the early 2000s?

Price of homes relative to anticipated future value

Assuming a CMO uses the sequential pay structure, how is principal passed through from borrowers paid to investors?

Principal payments are only made to the first tranche until it retires, then to the second tranche, and so on

A property has just been foreclosed on. Which of the following describes the rules regarding lien priority?

Property tax liens take priority, with all others following a "first in time" rule.

HUD's second goal in support of its mission is to meet the need for ______ homes.

Quality affordable homes

Which act prohibits the payment of kickbacks between settlement service providers?

Real Estate Settlement Procedures Act(RESPA)

In which phase of the real estate market cycle would you expect to see properties sit vacant and prices drop?

Recession

Which of the following taxes apply while an investor holds an investment property?

Rental Income

When the Treasury collects fewer funds than what is needed to pay the government's bills, what action might it take?

Sell Securities

What term is used to describe the housing inventory in default or foreclosure?

Shadow Inventory

With this alternative to foreclosure, borrowers receive permission from their lender to sell the property for less than the amount owed on the borrower's mortgage.

Short Sale

Which of the following types of residential dwellings do life insurance companies purchase from the secondary mortgage market?

Single-family on one lot

Krista is obtaining a loan to buy a home. Her loan agreement consists of one document called a note and one called a deed of trust. What's the role of the note?

States who owes money to whom, how much, and how it will be repaid

Some countries have banks that issue loans for U.S. real estate purchases. What are the main countries that participate?

Taiwan, the U.K., and Canada

Which of the following is a typical benefit of a retirement account?

Tax Deferment of Income

When a homeowner has repairs made to a home using an FHA 203(k) loan, HUD requires ______.

That the work meet FHA's basic energy efficiency and structural standards

Which of the following was created as a result of the Housing and Economic Recovery Act?

The Federal Housing Finance Agency(FHFA)

What's another name for the Homeowner's Protection Act?

The PMI Act of 1998

Which of the following is a true statement about borrower qualification standards for a VA-guaranteed loan?

The applicant must have a certificate of eligibility

Select the choice that best translates this clause into plain English. "Any partial prepayment shall be applied against the principal amount outstanding and shall not postpone the due date of any subsequent monthly installments or change the amount of such installments, unless the Note holder shall otherwise agree in writing."

The borrower is allowed to prepay the loan without penalty.

Appraiser Victor is determining the insured value of a property. What is he evaluating?

The cost to replace or rebuild the property

What is reconciliation?

The final estimate of value based on results of the appraiser's approaches to value

As part of a good financial plan, a business checking account is ______.

The proper place to deposit your commission check

Dennis wanted to leave his surfboard to his niece when he died, but he didn't want her to miss a single minute of wave action while his estate was held up in probate. Dennis needs ______.

To create a living trust

Roger is a veteran with a service-connected disability that requires him to use a wheelchair. He is eligible for the VA's Specially Adapted Housing grant. What can he use this grant for?

To remodel a home he owns to accommodate his disability

A quitclaim deed does which one of the following?

Transfers without warranty any interest or title the grantor has when conveying it

The ______ can offer direct loans to farmers and ranchers. The loans are funded by congressional appropriation.

USDA Farm Service Agency

Which governmental legislation established the Consumer Financial Protection Bureau?

Wall Street Reform and Consumer Protection Act (Dodd-Frank Act)

Molly's father has a service-related disability. He lives with Molly and her family in a home that she owns. Can funds from a VA-specific housing grant be used to modify Molly's home to accommodate her father's disability?

Yes, the smaller Special Housing Adaptation grant may be used to adapt a home owned by a family member where the eligible veteran lives.

Greg is selling his home to a veteran who's using a VA loan. When the transaction starts to stall, Greg tries to motivate the buyer by including his giant flat screen TV, valued at $1,200, as a gift. Is Greg allowed to do this?

Yes, this is considered an allowable seller concession