Real Estate Finance
The _______ section contains the seller's existing mortgage loan payoff amount that must be paid to complete the transaction.
"Due from Seller at Closing"
Which section of the closing disclosure contains the seller's existing mortgage loan payoff amount that must be paid to complete the transaction?
"Due from Seller at Closing"
Which percentage reflects the top debt-to-income ratio limit for qualified mortgages?
43%
Who or what entity directs the activities of credit unions?
A board of directors
What is a red flag for an Equal Credit Opportunity Act violation?
A person was denied credit without explanation or given resources that explain why.
Which project would a life insurance company be most likely to finance?
A shopping mall
Under the "Summaries of Transaction" section on page three of the Closing Disclosure, amounts listed for the borrower's transaction are calculated to result in ______.
An amount due from the borrower, which will match the cash to close amount
Which event led to the establishment of the FDIC?
Bank failures during the Great Depression
Which of the following describes mutual savings bank loans?
Banks focus lending offerings on local businesses and residents.
Which of the following represents a potential concern when borrowing funds from a pension or retirement plan?
Borrowing without consulting a financial expert can result in unintended consequences, such as income tax liability and loss of retirement income.
In which U.S. market(s) do foreign lenders participate?
Both the primary and secondary mortgage markets
Robert is a rancher. He was told about the USDA Farm Service Agency offerings. What can he use an approved loan for?
Building a new hay barn
Under which section of the Loan Estimate will you find any credits provided by the seller?
Calculated Cash to Close
Private loan companies may charge higher interest, larger fees, and could require ______ to secure a loan.
Collateral
When obtaining a mortgage to purchase a home, for what does the borrower use the property?
Collateral
Dorinda is an investor. She recently purchased shares in a tranche that holds mortgages and mortgage-backed securities. In what did she invest?
Collateralized mortgage obligation
Synergy National Bank issued a conventional loan that is eligible for purchase by Fannie Mae. When Fannie Mae purchases the loan, what will Synergy National Bank receive in return?
Collection fee
Althea is starting her own candle business. Her plan is to rent a space to sell her products for several years, with the hope of expanding. In this scenario, which item represents supply?
Commercial space for lease
The ______ was a response to the practice of redlining and was enacted in 1977.
Community Reinvestment Act
Which of the following is NOT part of the Other Considerations section of the Loan Estimate?
Comparisons
Which of the following items directly influences real estate supply?
Construction
The ______ uses education, enforcement, and research to promote fairness and transparency for consumer financial services.
Consumer Financial Protection Bureau
Cassie is helping her buyer client, Gus. As they discuss preparations for closing, she cautions Gus, "Make sure you review the Closing Disclosure as soon as you receive it and ______."
Contact your lender immediately if you find errors or have any questions
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
How is Regulation B related to the Equal Credit Opportunity Act?
Enforcement
______ creates a secondary market for agricultural loans by buying the loans, pooling them, and selling them as securities.
Farmer Mac
Fannie Mae, Freddie Mac, and the Federal Home Loan Bank are regulated by the ______.
Federal Housing Finance Agency
The Government National Mortgage Corporation was created in 1968 under the Department of Housing and Urban Development (HUD) and is more commonly known as ______.
Ginnie Mae
Which entity guarantees mortgage-backed securities which have the full support of the U.S. government?
Ginnie Mae
Which of these HUD programs allows mortgage lenders to obtain a better price for their mortgage loans in the secondary mortgage market?
Ginnie Mae
Stacy is preparing to sell her home, but learns she can't transfer the property until she removes an encumbrance. Which of these is encumbering her property?
Her existing mortgage
Which of the following was created as part of the Homeowner Affordability and Stability Plan?
Home Affordable Modification Program (HAMP)
The ______ Act was legislation aimed primarily at addressing the effects of the subprime mortgage crisis.
Housing and Economic Recovery
Which of the following best describes the state of the market during the expansion phase of the real estate cycle?
Increases in hiring, employment, and public confidence, and lots of buyers in the market
Which of the following are potential private loan resources that may be willing to finance a home?
Individual entrepreneurs
Which of the following could be different from the amount on the initial Loan Estimate and can impact the monthly payment?
Interest rate
Which type of support does the USDA Rural Development Program offer to its target audience of rural residents?
It offers direct loans, grants, and loan guarantees for housing and other rural needs, as well as advisor services to agricultural producers.
What is the impact to lenders when mortgage packages are sold?
It provides additional cash flow for new loans.
HMDA requires lenders to collect, maintain, and report data on which of the following?
Lending practices
The Federal Housing Finance Agency established percentage targets and ______ for loans made to low- to moderate-income borrowers.
Limits for conforming loans
The ease with which an asset is converted to cash is called ______.
Liquidity
During which phase of the real estate cycle do residents engage with local amenities and services?
Living
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
Natalie and Sam are reviewing the Loan Estimate form to ensure the date, their names, the property address, and sales price is listed accurately. Additionally, the information provided about their loan term, purpose, product, type, and rate lock should ______.
Match what the lender discussed with both of them
Store of value, unit of account, and what other factor define money?
Medium of exchange
What HMDA data is available about loans?
Mortgage applications, loan amount, type of loan, and loan purpose
Which person or entity works with many different lenders to find the best loan for the customer?
Mortgage broker
Under the "Projected Payments" section of the Loan Estimate, the consumer can view what is included in the monthly payment. Which of the following may be part of the total payment other than the principal and interest?
Mortgage insurance
Which of the following is NOT a benefit government-sponsored enterprises receive?
Non-profit status
An intermediate-term security issued by the Treasury that has a maturity term of between two and 10 years is called a Treasury ______.
Note
While Fannie Mae considers total and housing debt-to-income ratios in its underwriting process, Freddie Mac considers ______.
Only total debt-to-income
Several actions take place on the secondary mortgage market. Which of these is a common activity?
Packaging loans into mortgage-backed securities
Life insurance companies sometimes like to insure their investment in commercial projects by insisting on an equity position. This is known as ______ financing.
Participation
Jody is concerned about the ______ encumbrance that doesn't allow her to start her gardening greenhouse because it sits next to a nature conservancy.
Physical
What are the types of institutions that issue loans directly to consumers commonly called?
Primary market players
Roger has a sufficient income, has never missed a loan or credit payment, and has an adequate credit history. His credit score makes him a very creditworthy consumer. When obtaining a loan, which rate will he most likely get?
Prime rate
Which of these tasks is performed by the U.S. Mint?
Produces commemorative coins and medals
Although the Closing Disclosure lists all amounts as accurately as possible, some costs must be estimated. Why?
Property taxes and insurance may change over the life of the loan, resulting in changes to the required escrow amounts.
Which is not one of the lender requirements under the Community Reinvestment Act?
Providing school loans in low-income areas
HUD's second goal in support of its mission is to meet the need for ______ homes.
Quality affordable rental
Which of the following resources are extremely helpful when working with investors?
REIT analysts and bond rating agencies
Which act ensures a buyer in a residential transaction that's financed by a federally related mortgage loan has knowledge of all settlement costs?
RESPA
In which phase of the real estate market would you expect to see unemployment and foreclosures remain high but begin to stabilize?
Recovery
What's the name of a discriminatory lending practice whereby lenders limit the scope of their loans to exclude neighborhoods with certain ethnic or economic characteristics?
Redlining
What is the name of the set of regulations used to enforce the Equal Credit Opportunity Act?
Regulation B
The Community Reinvestment Act requires lenders to invest in development and ______ efforts that will enable low- and moderate-income individuals and families to afford a home.
Rehabilitation
How do falling interest rates impact investors in mortgage-backed securities?
Returns on investments decrease.
The three-business-day period following the latter of either the date that the transaction is consummated or the date the disclosure is made, during which a borrower can cancel their loan, is called the ______.
Right of rescission
The ______ table discloses the amounts associated with the transaction that the seller will pay and receive, usually resulting in a total cash to seller.
Seller's Transaction
RESPA prohibits kickbacks between which parties?
Settlement service providers
What term is used to describe the housing inventory in default or foreclosure?
Shadow inventory
Travis made the final payment on his loan according to the loan terms. What must the note holder do to acknowledge that the debt has been repaid?
Sign the note, mark it "paid in full," and return it to Travis.
What did the Troubled Asset Relief Program allow the U.S. Treasury to do in response to the 2007 financial crisis?
Spend billions
A major component of the Housing and Economic Recovery Act was the HOPE for Homeowners program, which aimed to ______ by helping subprime borrowers refinance into more affordable fixed-rate mortgages.
Stabilize the housing market
Which of the following would the FDIC most likely not insure?
Stock certificates
Unit of account, medium of exchange, and what other factor define money?
Store of value
Dawn and Steve are planning to purchase a home, but are wary of the commitment of a mortgage. However, they have no other way to make home ownership a reality, so they decide to educate themselves on the process for obtaining a mortgage loan. Where would you recommend they go for clear, consumer-oriented education on this topic?
The CFPB website
Which agency regulates FHLBanks?
The Federal Housing Finance Authority
Maria is a borrower reviewing her Closing Disclosure. She notices that the appraisal fee is listed under "Paid by Others" and has an L listed with the amount. What does this mean?
The L indicates that the creditor pays the item at consummation.
Kendra has applied for a loan from Acme Savings and Loan, but when she compares the Loan Estimate the loan officer gave her with the one from Best Bank, where she also applied for a loan, she decides she'd rather go with the loan from Best Bank. Which of the following is a true statement about this situation?
The Loan Estimate expires in 10 business days if Kendra doesn't tell Acme Savings and Loan that she wants to move forward with it.
Borrowers Ava and Liam are expecting their first child and want to be sure they're both comfortable with the monthly payments they'll be responsible for in the new house. Under the "Projected Payments" section of their Loan Estimate, Ava and Liam can review ______.
The estimated breakdown of each monthly mortgage payment, including any items that will be included in escrow
Joe decided to borrow funds from his retirement account to fund the down payment on his new house. It's now two years later and he lost his job. What is true about his pension plan?
The loan must be repaid immediately.
Which of the following describes the discount rate?
The rate at which a bank can obtain a loan from its Federal Reserve bank when using commercial paper as collateral
Larry obtained a mortgage from State Bank. Larry owns the property, controls it, and has all the rights that come along with real property ownership. State Bank has an interest in the property and one other right. What is that?
The right to foreclose if the borrower defaults
Anna is selling her home and met a nice young couple she really wanted to sell to, but they couldn't get financing. If Anna agrees to carry part of the loan for the buyers, what does she need to understand?
The risks involved
The Farm Credit System funds are acquired from ______.
The sale of debt securities and international money markets
Margot reviewed page three of her Closing Disclosure to see the amounts she'll pay and receive, and the total cash amount. She located this information under the "Summaries of Transaction" in the "Seller's Transaction" table, which is completed by ______.
The settlement agent
Which statement most accurately describes the right of rescission?
The three-business-day period from the date a transaction is consummated or disclosures are delivered to the borrower, whichever is later, during which the borrower can cancel the loan
Page four of the Closing Disclosure includes consumer education about ______.
The use of an escrow account
Which of the following is a likely result if Federal Home Loan Banks did not exist?
There'd be fewer funds available for lending in the community.
Which of the following are ways a private loan company insulates themselves from the risk of lending funds to a borrower who has had problems securing them elsewhere?
They may charge higher interest, higher fees, and require the borrower provide collateral to secure the loan.
Kendra has applied for a mortgage from Best Bank. When is Best Bank required to provide Kendra with a Loan Estimate?
Three business days
What's the purpose of the ECOA?
To prevent discrimination in lending
One of HUD's goals reflects a response to financial issues experienced in the housing market during the 2007 economic crisis. The goal is ______ to bolster the economy and protect consumers.
To strengthen the housing market
What program allowed the U.S. Treasury to spend hundreds of billions of dollars to stabilize our financial system, boost credit markets, help families avoid foreclosure, and promote economic growth?
Troubled Asset Relief Program
Buyers Romy and Steven are looking over closing documents and don't know if the Loan Estimate matches everything on the Closing Disclosure. Usually, amounts shown on the Closing Disclosure that don't exactly match the figures on the Loan Estimate will be due to _______.
Updates to reflect the terms of the borrower's legal obligation when the loan closes
A mortgage lien is a(n) ______ lien.
Voluntary and specific
Which governmental legislation established the Consumer Financial Protection Bureau?
Wall Street Reform and Consumer Protection Act (Dodd-Frank Act)
Page four of the Closing Disclosure lists specific disclosures about the loan, such as the penalty for late payments, whether a demand feature applies, whether the loan can be assumed, and ______.
Whether partial payments are accepted
A Treasury bond is a Treasury security ______.
With a maturity term of 30 years
