Contracts & Financing

What's the first thing the Montana board will do after the screening panel reviews the complaint information gathered and find that a violation has occurred?

• Conduct an investigation to determine if the complaint has merit

• Notify the accused licensee

• Contact the complainant for more information

• Schedule a formal hearing

Jerry & Simon signed a contract so that Jerry could purchase all of Simon's restaurant equipment for one price after Simon closes his restaurant next month. The contract contains a provision that states Jerry has 1 year from the purchase date to file a suit relative to the purchase. After the year is up, Jerry forfeits the right. What kind of contract clause is this?

• Specific time

• Statute of limitations

• Time is of the essence

• Time of performance

Answer explanation

The statute of limitations basically gives a date by which all performance must be completed, or the party forfeits any legal rights.

Katelyn really wants to include an inspection contingency in her purchase offer. Her agent explains that the inspection contingency only documents which of the following?

• How much money the sellers will spend on fixing inspection issues

• The inspector Katelyn will use

• Whether or not Katelyn will ignore some of the inspection issues

• The date by which all inspection issues must be addressed

Charles is selling his property to Seth. Charles paid off his own mortgage years ago, so he's in a position to provide 100% financing of Seth's purchase. Seth will make payments to Charles while Charles retains the property title. What's this an example of?

• Purchase money mortgage

• Wrap-around mortgage

• Land contract

• Straight-term loan

The Shores are in the process of buying a 300-square-foot home from the Bishops. They've completed all the required paperwork on their loan application. Mary's analyzing the package to determine their ability to repay the loan. She examines the property's value, property type, the loan-to-value ratio, & other things. Her recommendation is that the Shores' loan application be approved. What is Mary's role?

• Member of the loan committee

• The seller

• The seller's agent

• The underwriter

Answer explanation

Underwriters analyze loan applications & determine whether to approve or deny the loan.

An individual is purchasing a small craft shop, including the underlying real estate. She applies for a commercial loan from her federally insured bank to complete the purchase. Is this transaction covered by the Real Estate Settlement Procedures Act?

• No; RESPA only applies to loans obtained by private lenders

• Yes; all loans secured by real estate are subject to RESPA requirements

• No; commercial & business loans are exempt from RESPA requirements

How many parties does a deed of trust involve?

• 3: borrower, lender, & trustee

• 4: borrower, lender, trustee, & trustor

• 2: borrower & lender

• 5: borrower, lender, trustee, trustor, & beneficiary

Traditionally, lenders' qualifying mortgage rules use a range of percentages to qualify for both the housing debt-to-income ratio & the total debt-to-income ratio. What are those ratio ranges?

• 25%-28% for total debt; 33%-36% for housing

• 25%-28% for housing; 33%-36% for total debt

• 25%-33% for housing; 28%-36% for total debt

• 25%-33% for total debt; 28%-36% for housing

Mick focuses on originating mortgage loans. He works at a company that has in-house loan processors & underwriters. The options he offers consumers are limited to the products offered by his company. What's Mick's position?

• Real estate investor

• Mortgage banker

• Mortgage servicer

• Mortgage broker

Lawrence is a buyer closing on a home for which he's obtaining financing. Which document will give Lawrence an estimate of the costs he'll likely pay at closing?

• Closing disclosure

• Mortgage disclosure

• Buyer Worksheet

• Loan Estimate