RE Finance Final 1-15

Participants who make up the secondary mortgage market:

raise the necessary funds to purchase the mortgages

The act that requires lenders, mortgage brokers, or servicers of home loans to provide borrowers with the pertinent and timely disclosure of the nature and costs of the real estate settlement process is known as the:

Real Estate Settlement Procedures Act (RESPA)

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

alienation clause

Paying points to reduce the amount of interest on a loan is called:

buydown

Predatory loan practices include:

fraud,usury,deception.

Finance charges include:

interest charges/discount points.mortgage insurance fees.

Indirect lenders include:

pension funds. insurance companies.

A loan that provides for repayment with an agreed period by means of regular level payments is called:

an amortized loan

Qualifying the property involves:

an analysis of the property's features to determine its value to serve as collateral./determining through analysis whether its value can be expected to remain stable over time.

An opinion of value is called:

an appraisal

When the buyer and seller are both well informed, under no pressure either to buy or sell, and the property is offered for a reasonable time on the open market, it is said to be:

an arm's length transaction

On the Loan Estimate form, the items shown in the section "Services You Cannot Shop For" must be in alphabetical order and may include:

appraisals/credit reports/government funding fees.

All licensed/registered MLOs:

are issued a unique identifier number.

Discount points are paid:

at the closing

A fixed-rate mortgage loan that is set up in a fashion similar to a standard 30-year conventional loan is a:

biweekly loan

A loan origination fee is normally paid by the:

buyer

When prices begin to fall and production tapers off, the period is called

buyer's market.

The degree of risk in a real estate loan:

can be controlled by qualifying a buyer and a property before a loan is made. refers to the likelihood of default by the borrower. refers to the ability of the lender to recover loan proceeds through foreclosure.

The Federal Open Market Committee:

carries out open market operations.

Banks who supply capital for business ventures and construction activities on a short term basis are called:

commercial banks

A subordination clause is most often used for:

construction loans

The interest rate stated in the promissory note is called the:

coupon rate/nominal rate.

In alternative financing, "one point" is equal to:

1% of the loan amount

How many Federal Reserve Districts are there across the nation?

12

Credit unions were first set up in:

1970

A private mortgage insurer usually requires how many months' mortgage payments in reserve?

2

The minimum number of hours of mandatory pre-license education for MLOs is:

20

A borrower who has a 90% LTV ARM loan at 3.5% initial interest with a 2% annual interest rate cap and a 5% lifetime cap must qualify at:

5.5%

A loan can often be seasoned in:

6 - 12 months

When comparing recent sales of like properties, the sale should be recent, within the past:

6 months

ARM mortgage payment caps are usually limited by lenders to an annual increase of:

7.5%

Private mortgage insurance is required on all loans that exceed what percentage of the value of a property?

80%

If a buyer does not have enough money for a 20% down payment for a conventional loan, some options include:

a down payment of 10% with a conventional loan up to 80% and the seller carrying a second mortgage. a 90% conventional loan with a 10% down payment.

A 5-year Call Provision means:

a large balloon payment is due in 5 years

A loan where the lender assumes a percentage of ownership is called:

a participation loan

An order to cease and desist is known as a(n):

injunction.

Ethics differs from law in that ethics:

is what is right

An investment is said to be liquid when:

it can be instantly sold

A declaration of default is prepared by a:

lender

Private mortgage insurance protects the:

lender

A "due-on-sale" clause in a loan allows:

lender to declare the entire loan balance due immediately upon transfer of title

Which of the following is an advantage of having a 15-year mortgage?

lower payments Home ownership Lower fixed interest rates

Borrowers seeking conventional loans with a larger LTV than the traditional ratio are required to:

obtain private mortgage insurance.

In a foreclosure, a judge's order is called an:

order of execution

Mortgage bankers/mortgage companies:

originate, service, and sell loans

When an investor has an "undivided interest" in the mortgage pool, it is commonly referred to as a:

pass-through security

The four phases of the business cycle are

peak, recession,bottom, recovery

A loan held by a lender rather than sold into the secondary market is referred to as a:

portfolio loan

FIRREA:

protects the federal deposit insurance funds. applies to all federally related transactions. sets procedures for loans in federally related transactions.

The effective yield on a loan is referred to as:

the annual percentage rate (APR)

A gross rent multiplier helps an appraiser to determine:

the income approach to a property's value

In valuing a property, the most easily understood approach is called:

the market approach

The Loan Estimate form must provide:

the name and address of the creditor. the title "LoanEstimate". a statement of "Save this Loan Estimate to compare with your Closing Disclosure".

The comparative property sales that appraisers actually use are:

those properties that have closed escrow

The main purpose of the Home Mortgage Disclosure Act is:

to expose incidents of redlining

The different classes of securities are called:

tranches

If established as a REMIC, collateralize mortgage obligations may be issued by:

trust, corporation, partnership.

An out-of-court sale or auction initiated at the direction of a beneficiary is called a:

trustee's sale

The requirement that all pertinent information about a property or a loan be provided to enable a consumer to make informed choices is referred to as:

disclosure

A loss of savings deposits to higher yielding competitive investments is referred to as:

disintermediation

Strictly enforced zoning and private restrictions:

do much to promote conformity are a major consideration for appraisers

According to Reg. Z, Triggers include:

down payment interest rate. number/ dollar amount of payments.

Alternative financing programs are popular:

during times of high interest rates

A permanent loss of value to a property caused from factors outside the property itself is known as:

economic obsolescence

Negotiable instruments are promissory notes that are:

freely transferable

FNMA and FHLMC are:

government-chartered private corporations

All state-licensed MLOs must have never:

had a mortgage loan originator license revoked. b. had a felony in the past seven years. c. had a felony involving fraud, dishonesty, breach of trust, or money laundering.

Good ethics leads to:

happy clients. referrals.more income for you.

In most cases, which type of obsolescence is curable?

Funtional Physical

A scheme where the property and borrower are non-existent is referred to as a(n):

Air Loan Fraud Scheme

A real estate cycle refers to the real estate market's reaction to the forces of:

supply and demand

The Truth in Lending Law is supervised by the:

Consumer Financial Protection Bureau

The rate of interest charged by the Fed to member banks is called the:

Discount rate.

The role of FNMA (Fannie Mae) was further expanded in 1970 with the passage of the:

Emergency Home Finance Act

Lending in the absence of discrimination based on race, sex, color, religion, national ancestry, marital status, or handicap is known as:

Fair Lending

The act that establishes uniform standards for credit reporting and strengthens consumer protection against identity theft is known as the:

Fair and Accurate Credit Transaction Act (FACTA).

FAMC is also referred to as:

Farmer Mac

The FHFA refers to:

Federal Housing Finance Agency

The Closing Disclosure Form integrates and replaces the:

HUD-1 form/ Final TILA Disclosure Form

The TRID rule does NOT apply to:

Home Equity Lines of Credit HELOCsreverse mortgages/loans secured by a mobile home.

Any person who receives or represents to the public that he or she will for compensation assist an applicant in obtaining a residential mortgage loan is defined as a:

Residential Mortgage Loan Originator

A core area containing a substantial population nucleus of 50,000 or more inhabitants is known as a:

Standard Metropolitan Statistical Area

Who has the power of currency issue?

The Federal Reserve

Prior to getting licensed by the NMLS all applicants must:

a. provide fingerprints for a FBI criminal background check. b. provide authorization for NMLS to obtain a credit report. c. pass a 125 question Uniform State Test (UST).

The SAFE Act defines a Mortgage Loan Originator (MLO) as an individual who:

a. takes a residential mortgage loan application. b. offers or negotiates terms of s residential mortgage loan for compensation or gain.

In the event of a default, a creditor or seller may declare the entire outstanding balance immediately due and payable with a(n):

acceleration clause

When the government is forced to borrow money, making less money available for construction and home loans, it is called:

deficit spending

In a seller's market

demand exceeds supply.

The study and description of the population of an area is called:

demographics

In a promissory note, the borrower is called the:

maker

The process of tracking and comparing mortgage interest rates held in a pool to current market interest rates is called:

marking to market

Private, noninsured investment accounts are called:

money market funds

The primary market consists of:

mortgage companies. savings banks. local banks.

The intentional misrepresentation or omission of material facts by applicants to improperly influence a mortgage loan lender is is referred to as:

mortgage fraud

Another term used to describe private mortgage insurance is:

mortgage insurance premium

When minimum monthly payments result in unpaid interest that is added to the loan balance, it is called:

negative amortization

How many days prior to consummation can a revised Loan Estimate generally be provided to the borrower?

no later than 7 days prior to consummation.

A fixed-rate loan that gives the borrower a limited opportunity to reduce the interest rate without paying refinancing costs is called:

reduction option mortgage.

A fixed-rate mortgage:

remains at the same rate for the life of the loan.

A creditor is given the right to have the security property sold to satisfy the debt if the debtor fails to pay the debt according to the terms of the agreement. This is done with a:

security instrument