Texas Real Estate Finance Ch. 9 All Sections

Survey

A document which precisely shows the property lines and size and location of improvements on a particular property.

Constructive Notice

A fact, imputed to a person by law, which should have been discovered because of the person's actual notice of circumstances and the inquiry that a prudent person would have been expected to make.

Chain of Title

A history of conveyances and encumbrances affecting the title from the time the original patent was granted, or as far back as records are available, used to determine how title came to be vested in current owner.

Gross Rent Multiplier

A number which, times the gross income of a property, produces an estimate of value of the property.

Abstract of Title

A summary or digest of all transfers, conveyances, legal proceedings, and any other facts relied on as evidence of title, showing continuity of ownership, together with any other elements of record which may impair title.

Appraisal

A written statement, independently and impartially prepared by a qualified appraiser setting forth an opinion in a federally related transaction as to the market value of an adequately described property as of a specific date. It is supported by the presentation and analysis of relevant market information. An opinion of value.

Negative adjustment

According to the sales comparison approach, if the comparable sale #1 includes a garage, and the subject property does not, what type of adjustment needs to be made...?

Improvements

An exterior description of the subject property is listed under what section of the Uniform Residential Appraisal Report...?

Net worth

Assets minus liabilities equals an individual's...?

Actual Notice

Express or implied knowledge of a fact.

Positive net worth

If an individual's assets exceed their liabilities, they are said to have a...?

Title Insurance

Insurance to protect a real property owner or lender up to a specified amount against certain types of loss (ex: defective or unmarketable title).

Liabilities

Monies that are owed are considered...?

Sales Comparison Approach

One of the three major valuation methods, which compares a subject property's characteristics with those of comparable properties which have recently sold in similar transactions.

Income Capitalization Approach

One of the three methods of the appraisal process generally applied to income producing property, and involves a three-step process - (1) find net annual income, (2) set an appropriate capitalization rate or "present worth" factor, and (3) capitalize the income dividing the net income by the capitalization rate.

Cost Approach

One of three methods in the appraisal process. An analysis in which a value estimate of a property is derived by estimating the replacement cost of the improvements, deducting therefrom the estimated accrued depreciation, then adding the market value of the land.

Appraiser

One qualified by education, training and experience who is hired to estimate the value of real and personal property based on experience, judgment, facts, and use of formal appraisal processes.

Asset

Something that has value is known as a/an...?

Dimensions of the subject property

The 'Site' section of the Uniform Residential Appraisal Report includes which of the following information...?

Legal description of the property

The 'Subject' section of the Uniform Residential Appraisal Report includes which of the following information...?

-Legal description of the property -Names of the borrower and co-borrower -The requested loan amount

The Uniform Residential Loan Application includes which of the following information...?

Depreciation

The ability to deduct expenses on improvements made to income producing property.

Net Operating Income

The annual income generated by an income-producing property after taking into account all income collected from operations, and deducing all expenses incurred from operations.

Proration

The division of certain settlement costs between a buyer and seller is known as...?

-The property -The borrower -The loan amount requested by the borrower

The objective of the Uniform Residential Loan Application is to identify which of the following...?

Capitalization Rate

The rate of interest which is considered a reasonable return on the investment, and used in the process of determining value based upon net income.Capitalization Rate = NOI / Purchase Price

True

The seller is primarily responsible for paying the broker's commission at closing...?

-Unpaid judgment liens -Encroachments -Encumbrances

The title company conducts title searches to confirm that there are no gaps on title like the one within this hypothetical. What other types of issues could cause gaps on title?

Clouded Title

Title that is encumbered or burdened with defects.

Cash deposits

Under the Uniform Residential Loan Application, which of the following is considered an asset for the borrower...?

Marital status

What information about the borrower must be included on the Uniform Residential Loan Application...?

30 years

What is the most commonly used term on residential mortgages...?

The borrowers would have terminated the contract because they could not meet underwriting requirements

What most likely would have resulted if the seller of the property would not have reduced the purchase price of the property?

-Student loan delinquency -Outstanding car loans -Medical bills in collection

What other debts could possibly stall or delay the lending process until settled by the borrowers?

-The borrower's employment status -The borrower's income -The borrower's assets and liabilities

When qualifying a borrower, the lender needs to verify which of the following...?

-Determine the ability of the borrower to repay -Estimate the value of the property being used as collateral -Research and analyze the marketability of title

When qualifying a borrower, the lender will do which of the following...?

-Appraisal fees -Credit reports -Title insurance

Which of the following are included as the buyer's charge on a closing settlement statement...?

Appraisal fees

Which of the following are included as the buyer's charge on a closing settlement statement...?

-Broker commissions -Transfer taxes -Recording fees

Which of the following are included as the seller's charge on a closing settlement statement...?

-Equifax -Experian -TransUnion

Which of the following is an example of a credit bureau...?

Outstanding loan balance

Which of the following is an example of a liability...?

-Liens -Child support -Taxes

Which of the following is an example of a long-term liability...?

Uniform Residential Loan Application

Which of the following is used at the start of the loan application process...?