Real Estate Finance,
Revolving credit means credit that is which of the following?
Renewed as it is paid off
Complete this sentence: "While insurance companies have historically invested in _________ mortgages, more recently they have been shifting to __________ loans."
Residential, commercial real estate (CRE)
Debt generally IS NOT subject to income tax when:
Discharged through bankruptcy
A $20,000 5-year loan with 5% simple interest will add how much to the loan each year?
$1,000
A prospective FHA loan borrower with a monthly gross income of $5,000 should have no more than ______ housing expenses to qualify?
$1,550
If 8 points on a $100,000 loan = 1%, 1 point = ?
$125
On a 90% loan-to-value ratio, what's the maximum amount that could be loaned for a $300,000 property?
$270,000
A home owner with a home valued at $225,000 and a $185,000 mortgage balance (and no other debts against it) has an equity of:
$40,000
Figuring principal and interest only, a 30-year loan for $300,000 at 4% interest with a monthly payment of $1,432 would cost how much if paid according to the 30-year term? (closest answer)
$515,600
An owner of a $200,000 home with a $100,000 loan balance and no other debts against it could obtain a maximum equity loan of _________ in Texas?
$60,000
In its 80 years of operation, the FHA has insured over _______(pick closest number) of homes:
46 million
If the lender can provide suitable justification on a conventional loan, a borrower may be approved with a housing expense ratio as high as which of these?
46.99%
An income property valued at $240,000 and producing $16,800 annual net income has a capitalization rate of:
7%
Which of these IS NOT an FHA-insured program or product? A.) All of these are FHA-insured programs or products B.) Title 1 loans C.) Help for Seniors Reverse Mortgage D.) Making Homes More Energy Efficient
A.) All of these are FHA-insured program or product
Which of these IS NOT a law with significant impact on the real estate finance market? A.) TILA-RESPA B.) Community Reinvestment Act C.) Affordable Care Act D.) Dodd-Frank
Affordable Care Act
The Closing Disclosure (H-25) must be delivered to the borrower which of the following?
At least three business days before the consummation of the loan.
Much of pension funds' real estate activity is performed through which of the following? A.) Secondary mortgage market B.) All of these C.) Mortgage-backed securities D.) Mortgage bankers and mortgage brokers
B.) All of these
The four general phases in the FHA lending process include all, except: A.) Closing B.) Approval C.) Disclosure D.) Underwriting
C.) Disclosure
A crossed check is:
For deposit only directly into a bank account
The Dodd-Frank Act directed that the _____________ and the initial __________ be integrated into a single form
Good Faith Estimate and the Initial Truth-in-Lending Disclosure
In 1968, Fannie Mae was made into a fully private corporation, while one portion of the company was spilt off to form which other GSE?
Government National Mortgage Association (GNMA or Ginnie Mae)
A GSE is a(n):
Government-sponsored enterprise
An individual is in the business of loan origination if they in a commercial context "____________" take(s) a residential mortgage loan application, and offers or negotiates terms of a residential mortgage loan for compensation gain.
Habitually or repeatedly
The owner of which two properties generally would not be eligible to deduct all of the interest payments under basic IRS rules?
Holders of a $750,000 mortgage on their primary home and $300,000 mortgage on a vacation home
In the banking industry, "IDI" stands for:
Insured depository institution
A Contract Deed is also called a:
Land Contract
The FHA lending limit is the:
Maximum loan amount that the FHA will insure
The discount window system helps control the funds rate by:
Offering an alternative source of bank reserve funds
Real estate has been estimated to represent approximately ______ of the world's total economic wealth.
One-half
The "SAFE" in the SAFE Act stands for:
Secure and Fair Enforcement for Mortgage Licensing Act
The Uniform Residential Appraisal Report (URAR) is for real estate appraisal of:
Single-family dwellings or single-family dwellings with an accessory dwelling unit (ADU)
A Real Estate Mortgage Investment Conduit (REMIC) is a type of "SPV" which stands for:
Special purpose vehicle
A major cause of the 2000s housing market crash was:
Subprime and predatory lending
Mortgage bonds are considered "safer" because:
They are backed by collateral, i.e., the mortgaged properties
Although some financial markets are very small with little activity, some financial markets including the New York Stock Exchange (NYSE) and the forex markets trade _______ of dollars of securities daily.
Trillions
A property rated UN by the FHA is:
Uninsurable
UFMIP stands for which of the following?
Up-front Mortgage Insurance Premium
Agricultural loans make up approximately _____ of all bank loans.
1%
The FHA was created in:
1934
Freddie Mac was created in:
1970
How much down does a borrower generally have to pay to avoid private mortgage insurance (PMI)?
20%
The standard down payment for most conventional loans is:
20%
The _________ fixed rate loan is the most popular FHA home loan, especially among first-time homebuyers.
203(b)
Most lenders will not approve a conventional loan for a buyer if their housing costs are projected to be more than _____ of their gross monthly income, or ______ for an FHA loan.
28%, 31%
If they lender can provide suitable justification, a borrower may be approved for an FHA loan with a maximum debt-to-income ratio of which of these?
56.99%
Reverse mortgages are for homeowners over the age of:
62
What percentage of mortgage investment is held by the federal government in the post housing crisis era?
90%
A "hybrid" loan generally starts with:
A fixed rate, then starts adjusting at a predetermined pint later in the life of the loan
In a deficiency judgement suit, if the defaulting party wants to claim that the property is of a greater fair marker value, they must: A.) Both of these B.) Provide competent evidence of the property's true fair marker value C.) Request that the court take the fair marker value into consideration D.) Neither of these
A.) Both of these
Which of these consequences IS NOT a likely result form a loan default? A.) Criminal charges B.) Foreclosures C.) Late fees D.) Acceleration
A.) Criminal charges
In lien theory states, the buyer/borrower holds _______ title to the property.
Actual
Texas uses the deed of trust system because the trustee is considered to be:
An independent, impartial third party
Which of these IS NOT required for a Making Home Affordable Loan? A.) An unpaid principal balance equal to or less than $729,750 for a single-unit property B.) A credit score above 700 C.) A mortgage payment more than 31% of current gross monthly income D.) All of these are required
B.) A credit score above 700
Title I is a program that insures loans made for all of these, except: A.) Manufactured/mobile lot purchases B.) A mobile home park C.) Manufactured/mobile home and lot purchases D.) Manufactured/mobile home purchases
B.) A mobile home park
Subprime mortgages often involve: A.) Below standard credit-rated borrowers B.) All of these C.) Above market fees D.) Higher than market interest rates
B.) All of these
Which of these is true of credit unions? A.) Credit unions most frequently keep the mortgages that they write in their own portfolios B.) All of these C.) Credit union mortgage loans can take longer to close because their underwriting process can be slower than a bank's. D.) Some credit unions help new homebuyers with costs by refunding a portion of the real estate agent commission.
B.) All of these
Which of these is/are key steps in filling out the Closing Disclosure? A.) Check estimated monthly payment to see if it matches that on the Loan Estimate B.) All of these C.) Check interest rate and for prepayment penalties D.) Check to see if closing cots match those on Loan Estimate
B.) All of these
Which of these IS NOT a paragraph included in the Deed of Trust short form: A.) Conveyance of the property B.) Statement of the price to be paid for the property C.) Description of what is incorporated into the "security instrument" D.) Statement of borrower's covenants and obligations
B.) Statement of the price to be paid for the property
In an FHA transaction, cash can be deposited to the borrower's accounts:
Both before and during the course of the transaction
The primary difference between covenants and equitable servitudes is that a breach of an equitable servitude is remedied:
By injunction only
The Texas State Affordable Housing Corporation (TSAHC) provides affordable housing programs to assist which of these? A.) Affordable housing developers to build better housing for working families B.) Homeowners to sustain homeownership and improve their financial situation C.) All of these D.) Homebuyers to achieve the American dream of homeownership
C.) All of these
Which of these would not be a special provision? A.) Lock-in Clause B.) Subordination clause C.) All of these are special provisions D.) Release clause
C.) All of these are special provisions
A Participation Agreement generally DOES NOT provide which of the following information? A.) The share of the loan bought B.) The size of the loan C.) The date of the participation D.) A guarantee against borrower default
D.) A guarantee against borrower default
203(k) loans can only be used for specific types of repairs, such as: A.) Modernization and home function improvements B.) Recondition or replacement of plumbing; installation of a well and/or septic system C.) Addition or replacement of floors and/or floor treatments D.) All of these
D.) All of these
Government-sponsored agencies that provide support to the real estate finance industry include: A.) Federal Home Loan Banks B.) U.S. Department of the Treasury C.) Federal Deposit Insurance Corporation (FDIC) D.) All of these
D.) All of these
Which of these is/are associated with default and foreclosure issues? A.) Tax impacts B.) Adjustments and modifications C.) Deficiency judgements D.) All of these
D.) All of these
Indications that a loan is a subordinate loan usually include features such as: A.) Shorter repayment periods B.) Significant additional fees C.) Higher closing costs D.) All of these are indicators
D.) All of these are indicators
A "COE" Generally IS NOT available to: A.) Veterans B.) Active service members C.) Spouses of deceased veterans D.) Dishonorably discharged persons
D.) Dishonorably discharged persons
The term "subordinate finance instrument" generally includes all of these except which of the following? A.) Second mortgage B.) Mechanic's Lien C.) Judgement lien D.) First mortgage
D.) First mortgage
Exchanges occurring by telephone, fax machine, and the internet are said to be carried out through the:
Dealer market
While the loan is the money a lender provides to buy the home, the mortgage and deed of trust, are the "__________" that document the lender's actual interest in the property.
Instruments
IRRRL stands for:
Interest Rate Reduction Refinance Loans
An abstract of title:
Involves a search tracing ownership and potential claims against a property title
Mortgage funds loaned through a mortgage broker are issued in the name of the:
Mortgage lender
A loan that is determined to not fully meet the FHA standards is referred to as:
Non-compliant
Fannie Mae requires which of the following appraisal approaches?
Sales Comparison Approach
Mortgage loan types can be legally differentiated in al these ways, except: A.) Buyer race or gender B.) Property types C.) Rate structures D.) Equity options
A.) Buyer race or gender
Which of these IS NOT a factor commonly considered in qualifying for an FHA-insured loan? A.) Educational history B.) Employment status or history C.) Credit score or history D.) Debt to income ratio
A.) Educational history
Mandatory bank reserves can be kept: A.) Either of these places B.) In the depository institution's vault C.) As a deposit in a federal reserve bank D.) Neither of these
A.) Either of these places
Which of these is owned and operated as a government agency? A.) Ginnie Mae B.) Farmer Mac C.) Freddie Mac D.) Fannie Mae
A.) Ginnie Mae
Which of these IS a service based on earning "interest"? A.) Issuing of mortgage loans B.) Leasing C.) Banking charges and fees on deposit accounts D.) Insurance
A.) Issuing of mortgage loans
Under the Community Reinvestment Act, insured deposit institutions are required to do all of these, except: A.) Provide the public with a list of all depositors belonging to the institution B.) Provide the public the opportunity to comment on a IDI's performance under the CRA and on any application submitted to the federal bank regulatory changes C.) Provide the public access to timely and accurate CRA information about the financial institution D.) Have a public file also available for the community to review that contains information about the institution's CRA performance
A.) Provide the public with a list of all depositors belonging to the institution
The Federal Home Loan Bank System (FHLB) consists of all of these, except which of these? A.) Retirement systems B.) Credit unions C.) Thrift institutions D.) Commercial banks
A.) Retirement systems
Which of these financial resources in not a credit reporting agency? A.) Standard and Poor's B.) Experian C.) Transunion D.) Equifax
A.) Standard and Poor's
HUD's Public Housing Program is designed to target all of these groups, except: A.) Veterans B.) Low income families and individuals C.) The elderly D.) Persons with disabilities
A.) Veterans
Which of these IS NOT an encumbrance on real property? A.) Lien B.) All of these are encumbrances on real property C.) Covenant D.) Easements
B.) All of these are encumbrances on real property
Which of these is not a major focus area of the FDIC? A.) Bank deposit insurance B.) All of these are major focus areas of the FDIC C.) Receivership management D.) Banking regulation supervision
B.) All of these are major focus areas of the FDIC
What types of foreclosures are used in Texas? A.) Neither of these B.) Both of these C.) Nonjudicial D.) Judicial
B.) Both of these
Which of these IS NOT part of basic money management policy considerations? A.) Discount rate B.) Evolution of money C.) Bank reserves D.) Federal funds market
B.) Evolution of money
Adjustable rate loans include all of these, except: A.) Floating rate mortgages B.) Fixed-rate mortgages C.) ARMs D.) Variable rate mortgages
B.) Fixed-rate mortgages
Which of these IS NOT considered as a reliable source of real estate finance of funds? A.) Credit Unions B.) Lottery C.) Private Lenders D.) Commercial banks
B.) Lottery
Which of these are standard buyer closing costs? A.) Unpaid HOA dues B.) None of these C.) Real estate licensee commissions D.) Lender-required repairs
B.) None of these
In a real property transaction, the repayment of the debt os ensured by which of these specific documents? A.) Security instrument B.) Promissory note C.) Deed of Trust D.) Mortgage
B.) Promissory note
The phase if the economic cycle where the economy begins to pick up again is called which of these? A.) Expansion phase B.) Recovery phase C.) Recession phase D.) Hyper supply phase
B.) Recovery phase
Which of these is a potential advantage for the buyer in a contract for deed sale? A.) The seller gains the money from a land sale contract over time rather than as a lump sum B.) The land sale contract may be the only way that a buyer can purchase bare land without paying the full price in cash up front C.) The land sale contract may include language restricting what a property owner can do with a property after the debt is paid off D.) There's no need for judicial foreclosure procedures
B.) The land sale contract may be the only way that a buyer can purchase bare land without paying the full price in cash up front
The Department of Treasury partners will all of these groups to foster global economic growth, except for which one? A.) International financial institutions B.) Foreign governments C.) Charitable organizations D.) Other federal agencies
C.) Charitable organizations
Which of these IS NOT generally covered by the title insurance? A.) Easements not listed in the title commitment B.) None of these C.) Exceptions listed in the title insurance policy D.) Issues not identified in the title policy arising after transfer of title
C.) Exceptions listed in the title insurance policy
Which type of easement grants rights to access a servant estate without attachment to, or benefitting, a particular piece of land? A.) Right-of-way B.) Appurtenant C.) In gross D.) Negative
C.) In gross
Which of these IS a phase of the real estate finance markert cycle? A.) Expression B.) Hyper demand C.) Recovery D.) Rescission
C.) Recovery
The FHA assists in providing mortgage insurance for all of these, except: A.) Hospitals B.) Single family homes C.) Retail business establishments D.) Multi-family homes
C.) Retail business establishments
Which of these IS NOT a significant concern to lenders issuing construction loans? A.) Reliability of building contractor B.) Falling property values C.) Rising property values D.)Collateral is not yet built
C.) Rising property values
A title search might reveal any of these information, except: A.) That the property being offered as collateral is, in fact, the one being purchased B.) Actual "owner of record" C.) Seller credit history D.) Other claims, such as mechanic's liens, second mortgages or other debts
C.) Seller credit history
Which of these acts or laws is not studied here as a major influence on real estate finance? A.) Dodd-Frank Act B.) TILA-RESPA C.) The Statute of Frauds D.) SAFE Act
C.) The Statute of Frauds
As an alternative to Verification of Deposit, some lenders may accept: A.) A sworn statement from the borrower B.) Both of these C.) The most recent three months worth of bank statements D.) Neither of these
C.) The most recent three months worth of bank statements
CFPB stands for:
Consumer Financial Protection Bureau
A conventional loan borrower with $7,000 gross monthly income, 730 credit score, potential $1,610 mortgage payment, and $3,000 monthly expenses might have problems with which qualifying standard? A.) 28% housing expense to income ratio B.) Credit score C.) None of these D.) 36% debt-to-income ratio
D.) 36% debt-to-income ratio
Which of these IS NOT a requirement of a REIT? A.) Must distribute at least 90% of taxable income to shareholders as dividends B.) After 1 year as a REIT, the organization must have at least 100 shareholders C.) At least 75% of the REIT's total assets must be invested in real estate assets and cash D.) Must be an entity that would normally be classified as a partnership
D.) Must be an entity that would normally be classified as a partnership
Which of these IS NOT a form of mortgage scam? A.) Air Loan scheme B.) Foreclosure Rescue scheme C.) Mortgage Loan Modification scheme D.) Ponzi scheme
D.) Ponzi scheme
Which of these IS NOT a form used in the loan application process? A.) Uniform Residential Appraisal Report B.) Verification of Deposit C.) Uniform Residential Loan Application D.) TREC 1-4 residential contract
D.) TREC 1-4 residential contract
Which of these IS NOT a reason for the borrower to prefer a private lender? A.) The borrower might have a poor credit history, but be able to show enough recent improvement to satisfy the private lender B.) A young or otherwise first-time buyer might not have the requisite credit history C.) A self-employed borrower might not have the W2 or other documentation necessary for a bank D.) The private lender may charge higher interest rates
D.) Th private lender may charge higher interest rates
Which of these forms IS NOT generally required to qualify the buyer for a loan? A.) Request for Verification of Deposit B.) Uniform Residential Loan Application C.) Request for Verification of Employment D.) The Title Commitment
D.) The Title Commitment
A "direct endorsement" lender has the authority for which of these? A.) Offer conditional approval only B.) All of these C.) Guarantee FHA acceptance of the loan D.) To perform underwriting of the loan on their own
D.) To perform underwriting of the loan on their own
