REP: CH 10 REVIEW Q'S
When advertising a property for sale, what statement would place the broker in violation of the federal Truth-in-Lending Act?
"3-bedroom, 2 bath, large lot, with 10% down; total price $225,000"
If economic conditions create a tight money market, what would arise concerning offers to purchase real property?
- there will be more cash offers - land contracts of sale will see a greater use - there will be more offers to assume the seller's loan
The maximum commission that can be charged by a licensee for negotiating a second trust deed of $7,500 for a period of 5 years is:
15%
The broker negotiating the loan must keep a signed copy of the Mortgage Loan Disclosure Statement for how many years?
3
What fees may NOT be included in the finance charge according to the federal Truth-in-Lending Act?
Appraisal fees (Interest, Finder's fees, and Buyer's points are included)
What lenders would be most likely to loan funds for construction costs for a single-family residence?
Commercial bank
All consumers are given an equal chance to obtain credit through the:
Equal Credit Opportunity Act
What does not participate in the secondary market for mortgage loans?
FHA
Which real estate lender has lending policies characterized by long-term financing, few construction loans, larger loans preferred, loans that usually are not serviced?
Insurance companies
Who is not considered to be institutional lenders?
Mortgage companies
A federal law requiring disclosure to borrowers of closing costs and procedures by means of pamphlet and forms approved by the U.S. Department of Housing and Urban Development (HUD) is called:
R.E.S.P.A.
What is the main purpose of RESPA?
To require that disclosures be made by lenders that make loans on 1-to-4 unit dwellings
What would be exempt from Regulation Z?
a loan for agricultural purposes made by a federally chartered bank
The Real Estate Settlement Procedures Act (RESPA) applies to what?
a loan secured by a first trust deed securing real estate upon which there is one-to-four family residential dwelling
In the context of financing real property, the term "ware housing" most closely refers to:
a mortgage banker collecting loans before selling them
The original purpose of the Federal National Mortgage Association (FNMA) was:
buying and selling FHA-insured and VA-guaranteed loans in the secondary market
Regulation Z requires that consumers be informed of credit terms by the:
creditor
The Truth-In-Lending Act (Regulation Z) requires:
creditors to disclose credit terms so consumers can make comparisons
The process of gradually relaxing regulatory restraint is called:
deregulation
In advertising the availability of real estate loans, using any of the following phrases (5% down payment, 360 payments, 30-year loans) by itself would be a violation of the federal Truth-in-Lending Act's Regulation Z except:
easy terms available
Life insurance companies that do not deal with mortgagors or trustors usually make real estate mortgage loans to purchase indirectly through ______, for which they pay a loan preparation and service fee.
mortgage companies
If only the APR is disclosed in an advertisement for property, which additional disclosures must be made?
no other disclosures are required
On loans governed by RESPA, a buyer or seller may legally be charged for all of the following (preparation of the loan documents, conducting an appraisal prior to the loan, preparation of credit reports) except:
preparation of the Uniform Settlement Statement
Most junior loans negotiated in today's market are secured from the following source:
private lenders
The use of property's location to deny financing is known as:
redlining
The main purpose of the federal Truth-in-Lending Act is to:
require disclosure of credit terms so consumers can compare loans
The Federal Real Estate Settlement Procedure Act of 1974 (RESPA) pertains to:
residential properties with 1-to-4 units
The most effective method for the Federal Reserve to create a "tight" money market is to:
sell gov't bonds and raise the discount rate
When a commercial bank wants to achieve liquidity and marketability on their loans, what would probably be made?
short-term loans
What is the best description of the term "mortgage yield"?
the effective return of interest to the investor
In the field of real estate financing, the term "secondary mortgage market" usually refers to:
the resale or transfer of existing trust deed loans
The type of lenders having the greatest percentage of its assets invested in residential real estate mortgages are:
thrifts
An economic situation in which the supply of money is limited and the demand for money is high, as evidenced by high interest rates is:
tight money
What is the process of evaluating a borrower's risk factors before the lender will make a loan?
underwriting
The process of assembling into one package a number of mortgage loans, prior to selling them to an investor is:
warehousing
