A promissory note would usually contain each EXCEPT
the interest rate charged.
the total amount owed.
the terms of payment.
physical description of the collateral.
Ronald defaulted on his home mortgage payments. The lender obtained a court order to foreclose on the property. At the foreclosure sale, Ronald’s house sold for $29,000, and the unpaid balance of his loan is $40,000. What must the lender do to recover the $11,000 Ronald still owes?
Sue for damages.
Sue for specific performance.
Seek a deficiency judgment.
Seek a lis pendens.
Foreclosure would terminate
statutory redemption rights.
assignment and novation.
equitable right or equity of redemption.
All of the above.
If the amount realized at the foreclosure sale is more than the indebtedness, the excess belongs to
the sheriff’s office.
the mortgagee.
the mortgagor.
the grantor.
Which BEST describes an owner’s equity in the property?
The value of the property
The value over and above the outstanding mortgage balance
The amount of equitable redemption
The amount of the commission owed on the sale
A clause in a mortgage releasing the indebtedness once the loan is paid off is
defeasance.
alienation.
subordination.
acceleration.
Which form of financing would be the greatest risk to the buyer?
Wraparound mortgage
Buydown mortgage
Installment land contract mortgage
Second mortgage
When the borrower’s mortgage is more than the market value of a home, and they MUST sell the home, a/an ___________ might be negotiated with the bank.
foreclosure
trade
equity loan
short sale
A mortgage which is subordinate to another mortgage is called a
first mortgage.
purchase money mortgage.
package mortgage.
junior mortgage.
In an installment land contract, what type of title did the seller retain until the loan was paid?
Legal
Equitable
Tenancy on common
Joint tenancy
An instrument that provides evidence of one person owing another money is
The Collateral.
The Chattel.
The Note.
The Mortgage.
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The VA benefit from the Department of Veteran’s Affairs for a veteran approved home loan guarantees that
the veteran will make the scheduled payments.
the property cannot be foreclosed.
all loans made to veterans are affordable.
the loan, or a portion of it, made by an approved lending institution will be paid.
According to the TRID rule, lenders must give a copy of which booklet to every person at the time of application for a loan?
Your home loan toolkit
Your credit history toolkit
Your first home purchase toolkit
Your home mortgage kit
An FHA mortgage is obtained through
any qualified lending institution.
any government agency.
FHA.
VA.
Which agency administers RESPA?
Consumer Federal Protection Bureau (CFPB)
Consumer Federal Consumer Board (CFCB)
Consumer Financial Protection Bureau (CFPB)
Consumer Financial Credit Bureau (CFCB)
What kind of a loan would be fully paid out over the life of the loan?
Fully amortized
Straight term mortgage
Balloon loan
Package loan
__________ mission is to increase homeownership, support community development, and increase access to affordable housing free from discrimination.
FNMA’s
GNMA’s
HUD’s
FHLMC’s
_______________ guaranty allows mortgage lenders to obtain a better price for their mortgage loans in the secondary market. The lenders can then use the proceeds to make new mortgage loans available.
Government National Mortgage Association (GNMA)
The Real Estate Settlement Procedures Act (RESPA)
The Department of Housing and Urban Development (HUD)
The Department of Veteran’s Affairs (VA)
Buyer Carr went to get an FHA loan because rates were significantly below the current market rate for conventional loans. The loan requires 3 discount points because it is below market rates. Which BEST describes this situation?
Points can be charged to either the buyer or seller.
Points can be charged only to the buyer.
Points can only be charged to the seller.
No points are allowed on an FHA loan.
.___________________________ ensures that all consumers are given an equal chance to obtain credit. This doesn’t mean all consumers who apply for credit get it; factors such as income, expenses, debt, and credit history are considerations for creditworthiness.
The Equal Credit Opportunity Act (ECOA)
The Real Estate Settlement Procedures Act (RESPA)
The Truth in Lending Law
Regulation Z
Which law requires lenders to disclose to buyers the true cost of obtaining credit so that the borrower can compare the costs of various lenders?
TRID
ECOA
TIL
HMDA
A lender generally charges discount points on an FHA loan to
provide greater interest yield to the investor.
provide a competitive rate.
fill the gap between the lender rate and the fixed rate.
increase the availability of loan funds.
Which mortgage allows a person to buy a home with no money down?
Conventional insured
Conventional
FHA
VA
A man had a loan for $60,000, and he had to pay 2.5 points. How much would he have to pay in cash?
$150
$1,000
$1,500
$3,000
A veteran had a VA loan using his full entitlement. He allows another veteran to assume the loan without VA approval. Could he immediately get another VA loan?
Yes, because another veteran assumed the loan.
Yes, because he is no longer liable for the loan.
No, because he cannot use VA eligibility more than once.
No. He is still liable for the loan.
In making a home mortgage loan, a lender would consider all EXCEPT
other financial obligations of the borrower.
appraised value of the property pledged as security.
interest rate.
financial need of the borrower.
Which is NOT an agency that deals (buys loans) in the secondary market?
Government National Mortgage Association
Federal Home Loan Mortgage Corporation
Federal Housing Administration
Federal National Mortgage Association
The primary distinction between the primary and secondary mortgage market is what?
The primary market is not active in the origination of mortgage loans.
The secondary market is fundamentally a holding or warehousing process.
The homeowner can get a mortgage from either the primary or secondary market.
Only lenders can get loans in the primary market.
Final payment of a mortgage loan that is considerably larger than the other monthly payments because the loan was not fully amortized describes a(n)
wraparound mortgage.
amortized mortgage.
adjustable mortgage.
balloon mortgage.
The amount of a loan expressed as a percentage of the value of the real estate offered as security is the
loan balance.
amortization.
loan to value ratio.
interest rate.
The basic difference between an FHA and a VA loan is
FHA guarantees loans; VA insures them.
FHA insures loans, VA guarantees them.
both require 20% down payment.
FHA requires no down payment; VA requires 5% down payment.
A developer would MOST LIKELY obtain which type of mortgage on a new subdivision?
Open-end mortgage
Package mortgage
Blanket mortgage
Wrap around mortgage
_________________ was created to stabilize the nation’s mortgage markets and expand opportunities for homeownership and affordable rental housing.
Government National Mortgage Association (GNMA)
The National Low Income Housing Coalition (NLIHC)
The Department of Housing and Urban Development (HUD)
The Department of Veteran’s Affairs (VA)
For a veteran to obtain a VA loan, the VA must issue a certificate of
eligibility.
entitlement.
endorsement.
enterprise.
Which of these organizations public mission and defining goal is to help more families achieve the American Dream of homeownership?
Government National Mortgage Association.
Federal National Mortgage Association.
The National Low Income Housing Coalition.
The Department of Veteran’s Affairs.
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A seller netted $55,000 at closing. If the seller paid costs of $1000 and an 8.5% commission, what was the sale price to the nearest dollar?
$57,850
$58,850
$60,760
$$61,202
A house sold for $165,000 and the total commission received by the broker was $13,200. What was the rate of commission?
6%
7%
$8%
10.5%
Which of the following statements best describe the purpose of a Closing Disclosure?
$An official settlement statement used by settlement agents and title companies to itemize all charges for a borrower and seller
An official HUD statement used by the seller to itemize all charges for a borrower and seller
An official HUD statement used by the buyer to itemize all charges for a borrower and seller
An official settlement statement used by the listing agent to itemize all charges for a borrower and seller
A 15-acre plot of land sold for $3000 an acre. What is the cost of the deed stamp tax on this property?
$150
$235
$$315
$1500
A property sold for $198,000 with a listing commission of 8%, the selling office is to receive 40% of the total commission. How much will the listing salesperson receive if she is paid 60% of the amount retained by the listing broker?
$2,376.69
$3,168.00
$4,752.23
$$5,702.40
A seller listed a property for $96,000. The property sold for $94,000. How would the purchase price appear on a full settlement statement?
Debit the seller $94,000 and credit the buyer $96,000.
$Credit the seller $94,000 and debit the buyer $94,000.
Debit the seller $96,000 and credit the buyer $96,000.
Credit the seller $96,000 and debit the buyer $ 94,000.
Taxes are $1,485 for a July 31 closing. Compute the tax proration and show how the proration will appear on the settlement statement. The day of closing belongs to the buyer, and taxes are paid in arrears. Use the 365-day method for prorating.
Debit seller $526.55; credit buyer $526.55.
Credit seller $526.55; debit buyer $526.55.
$Debit seller $858.77, Credit buyer $858.77
Credit seller $858.77; debit buyer $858.77.
A borrower received an 80% conventional loan and paid two discount points. If the points totaled $1,500, what was the sale price?
$50,000
$$93,750
$100,000
$102,500
In Florida, the deed of the property is taxed based upon the
listed price.
$sale price.
adjusted gross price.
sale price, minus the escrow amount.
Rich and Merle purchase a property for 275,000. They obtain a new 75% loan from the ABC Lending Company. How much was their loan, and how would it appear on their settlement statement?
$$206,250; credit the buyer.
$206,250; debit the buyer.
$68,750; credit the buyer.
$68,750; debit the buyer.
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Key indicators of a change in the market could be
a change in the sales volume.
more real estate salespeople coming into the business.
fewer real estate salespeople coming into the business.
predictions of harsh weather in the north.
A seller’s market occurs when
too many homes are for sale.
buyers have lots of choices.
not enough inventory is available for buyers.
sellers price their homes for over the price that they purchased.
Karen has always wanted a home near the ocean. She recently received an inheritance that would help her purchase the house she’s always wanted down the street. This is an example of
supply.
financial stability.
demand.
availability.
Demand may be influenced by
the ability of a buyer to get a loan.
skilled labor.
credit scores.
the ability of a builder to get a loan.
Real estate investment can be considered to be
a quick way to make money.
a relatively long-term investment.
a short-term opportunity.
independent of market conditions.
A builder is looking to develop an area of several acres. Concrete in the area is hard to get due to a large complex being built down the street. He is being affected by
workmanship.
demand.
pricing.
supply.
Government interference influences the real estate market. Which is NOT government interference?
Zoning
Building codes
Taxes
Deeds
The MOST important understanding of the vacancy rate is
to indicate how much money the owner will receive.
to indicate how much movement there is in the market.
to indicate the location of the property.
to indicate there are good neighbors in the complex.
The principle of property being nonhomogeneous means
all property must pay taxes.
all property is similar.
no two properties are the same.
no two properties can be owned at the same time.
A large factory closed in the area. Many workers lost their jobs as a result. This will probably result in a
buyer’s market.
seller’s market.
lender’s market.
renter’s market.
Which of the following is NOT a demand factor?
Price of real estate
Availability of skilled workers
Availability of mortgage credit
Income of consumers