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Texas RE Finance Quiz Questions (100 questions)

Total questions: 105

Worksheet time: 53mins

Name
Class
Date
1.

Which of the following may be a lender in a real estate transaction...?

a)

Family and friends

b)

Insurance company

c)

Commercial bank

d)

All of the above

2.

Which of the following participates in the secondary mortgage market...?

a)

Freddie Mac

b)

Fannie Mae

c)

Ginnie Mae

d)

All of the Above

3.

The secondary mortgage market offers ..............for the primary mortgage market?

a)

Support

b)

Liquidity

c)

Buyers

d)

Supply

4.

A borrower is said to be in default of their loan if they do not abide by the terms of the...?

a)

Promissory Note

b)

Deed

c)

Mortgage

d)

Purchase contract

5.

What is the minimum down payment for an FHA insured loan...?

a)

3.5%

b)

10%

c)

20%

d)

50%

6.

The actual ownership of property is known as...?

a)

Secure title

b)

Recorded title

c)

Legal Title

d)

Equitable title

7.

When a borrower hypothecates their property, the lender will maintain...?

a)

Equitable Title

b)

Legal title

c)

Secure title

d)

Interim title

8.

A long term real estate cycle is typically...?

a)

1-2 years

b)

3-5 years

c)

5-7 years

d)

10-15 years

9.

When using leverage to help purchase a residential property, what is typically used to cover the remainder of the purchase price...?

a)

Credit cards

b)

Seller financing

c)

Cash Downpayment

d)

Options money

10.

Which of the following is an example of using leverage in a real estate transaction...?

a)

Inheriting a property from a family member

b)

Obtaining Financing to Purchase a Property

c)

Purchasing a property using all cash

d)

All of the above

11.

The Federal Reserve is responsible for which of the following...?

a)

Influence the availability of money and credit

b)

Supervise banking activities

c)

Establishing facilities for the sale of commercial paper

d)

All of the above

12.

The United States Mint is responsible for which of the following...?

a)

Producing the Federal Reserve notes

b)

Manufacturing U.S. Coins

c)

Producing Immigration Certificates

d)

Producing U.S. Passports

13.

Which of the following was designed primarily to insure that prospective borrowers and purchasers on credit receive credit cost information before entering into a transaction...?

a)

Troubled Asset Relief Program

b)

The Federal Deposit Insurance Corporation

c)

Office of the Comptroller of the Currency

d)

Truth in Lending Act

14.

National member banks of the Federal Reserve must do which of the following...?

a)

Clear checks

b)

Maintain reserves

c)

Comply with the rules and regulations of the Federal Reserve

d)

All of the Above

15.

Each district within the Federal Reserve is overseen by a...?

a)

Board of Associates

b)

Board of Directors

c)

Attorney General

d)

President

16.

The cost of borrowing money is expressed as a/an...?

a)

Variable fee

b)

Interest Rate

c)

Flat fee

d)

Commission

17.

The Office of the Comptroller of the Currency falls under the control of the...?

a)

Attorney General

b)

The Federal Deposit Insurance Corporation

c)

U.S. Treasury

d)

The U.S. Central Bank

18.

The amount borrowed is known as...?

a)

Reserves

b)

Principal

c)

Deposit

d)

Interest

19.

Instruments of credit can do which of the following...?

a)

Collect and clear checks

b)

Be regulated by member banks of the Federal Reserve

c)

Administer credit controls

d)

All of the Above

20.

Which of the following helps to limit the impact on the economy and the financial system when a bank or thrift institution fails...?

a)

RESPA

b)

FDIC

c)

FHLB

d)

TILA

21.

HUD oversees which of the following...?

a)

Housing choice vouchers

b)

GNMA

c)

FHA

d)

All of the Above

22.

The Consumer Financial Protection Bureau enforces which of the following...?

a)

Home Mortgage Disclosure Act

b)

Community Reinvestment Act

c)

FHLB

d)

FNMA

23.

Under the .............., mortgage originators must report the racial characteristics and gender of their applicants?

a)

Equal Credit Opportunity Act

b)

Community Reinvestment Act

c)

Home Mortgage Disclosure Act

d)

Fair Housing Act

24.

PMI only applies to what types of loans...?

a)

Conventional Loans

b)

VA loans

c)

FHA insured loans

d)

All of the above

25.

HUD is responsible for which of the following activities...?

a)

Direct Ginnie Mae activities

b)

Supervise the FHA

c)

Enforce the Fair Housing Act

d)

All of the Above

26.

The Housing Choice Voucher Program is an example of...?

a)

Incentive housing

b)

Subsidized Housing

c)

Renewal housing

d)

Standard housing

27.

Mortgage insurance premium is obtained on which of the following loans...?

a)

Conventional loans

b)

Non-conforming loans

c)

FHA Insured Loans

d)

All of the above

28.

Which of the following originates long-term mortgages for farmers and ranchers...?

a)

Raw Land Bank

b)

Unimproved Land Association

c)

Production Credit Association

d)

Federal Land Bank Association

29.

The USDA Rural Development Program combines the Farmers Home Administration, the Agricultural Cooperative Service Administration, and the...?

a)

FCS

b)

Farm Credit System

c)

Rural Development Administration

d)

Federal Agricultural Mortgage Corporation

30.

Which of the following programs is offered by HUD...?

a)

First-Time Homebuyer Loan Program

b)

Seller Exchange Program

c)

Good Neighbor Next Door Program

d)

All of the above

31.

This occurs when monthly installment payments are insufficient to pay the interest accruing on the principal balance, so that the unpaid interest must be added to the principal due...?

a)

Variable balance

b)

Amortization

c)

Negative Amortization

d)

Reverse amortization

32.

Which of the following provides liquidity for lenders in the primary mortgage market...?

a)

Freddie Mac

b)

Ginnie Mae

c)

Fannie Mae

d)

All of the Above

33.

A loan where the interest rate does not fluctuate during the term of the loan is known as a...?

a)

Dynamic Rate Loan

b)

Variable Rate Loan

c)

ARM

d)

Fixed Interest Rate Loan

34.

Private mortgage insurance is not needed if the borrower makes a down payment of at least...?

a)

3.5%

b)

5%

c)

10%

d)

20%

35.

Which of the following purchases agricultural loans...?

a)

Fannie Mae

b)

Farmer Mac

c)

Fannie Mae

d)

Ginnie Mae

36.

The criteria with which a lender determines the credit worthiness in order to qualify them for the loan is referred to as...?

a)

Underwriting

b)

Subsidizing

c)

Quantifying

d)

Appraising

37.

Ginnie Mae was created under the...?

a)

Federal Housing Finance Act of 1971

b)

Fair Housing Act of 1968

c)

Dodd-Frank Act of 2010

d)

Urban Development Act of 1968

38.

In this loan type, the principal balance of the loan increases over time...?

a)

Fixed interest rate loan

b)

Fully amortizing loans

c)

All of the above

d)

Negative Amortization Loans

39.

A mortgage made without governmental underwriting is referred to as a/an...?

a)

FHA insured loan

b)

Unconventional loan

c)

VA loan

d)

Conventional loan

40.

Which of the following is paid on FHA insured loans where the borrower puts down a minimum down payment...?

a)

ADA

b)

PMI

c)

ARM

d)

MIP

41.

In a deed of trust, the buyer serves as the...?

a)

Beneficiary

b)

Trustor

c)

Guardian

d)

Trustee

42.

A REIT must be owned by at least...?

a)

2 investors

b)

100 Investors

c)

500 investors

d)

1,000 investors

43.

A mortgage REIT primarily earns their income from which of the following...?

a)

Mortgage interest

b)

Selling mortgages

c)

Fees associated with originating mortgages

d)

All of the above

44.

This type of REIT purchases loans...?

a)

Private REIT

b)

Mortgage REIT

c)

Equity REIT

d)

Public REIT

45.

The lender on the security of a note and deed of trust is known as the...?

a)

Grantor

b)

Beneficiary

c)

Trustor

d)

Trustee

46.

The third party under a deed of trust is known as a...?

a)

Grantor

b)

Trustee

c)

Trustor

d)

Beneficiary

47.

Which of the following REITs directly invests in properties and earns income from rents and sales...?

a)

Public REIT

b)

Equity REIT

c)

Private REIT

d)

Mortgage REIT

48.

A loan provided by the seller of a property or business to the purchaser is known as...?

a)

Seller financing

b)

Commercial financing

c)

Reverse financing

d)

Conforming financing

49.

Pension funds typically purchase which of the following...?

a)

Mortgage backed securities

b)

Corporate stocks

c)

Government securities

d)

All of the Above

50.

A mortgage banker originates and ...........loans?

a)

Converts

b)

Records

c)

Services

d)

Implements

51.

A mortgage lien is an example of a...?

a)

Specific Lien

b)

Judgement lie

c)

General lien

d)

Involuntary lien

52.

A lien imposed against property without consent of an owner is known as a/an...?

a)

Voluntary lien

b)

Mortgage lien

c)

Involuntary Lien

d)

General lien

53.

A lien on all the property of a debtor is known as a...?

a)

Specific lien

b)

General Lien

c)

Mortgage lien

d)

Judgment lien

54.

According to lien theory, the lender retains equitable rights to the property, while the borrower retains...?

a)

Legal rights

b)

Foreclosure rights

c)

Encumbrance rights

d)

Land rights

55.

Which of the following estate offers the right of possession and control, but not title...?

a)

Fee Simple Estate

b)

Life Estate

c)

Leasehold Estate

d)

All of the above

56.

In order for a buyer to take over a seller's existing loan on the property, the loan must contain a/an...?

a)

Release clause

b)

Subordination clause

c)

Due on sale clause

d)

Assumption clause

57.

If a buyer assumes a seller's existing mortgage, who is responsible for the payments on the mortgage...?

a)

The seller

b)

Both the buyer and seller

c)

The buyer

d)

Neither the buyer or seller

58.

A lien that attaches to one specific property only is known as a...?

a)

Involuntary lien

b)

Voluntary lien

c)

General lien

d)

Specific lien

59.

Which of the following liens takes top priority over other liens...?

a)

Mechanic's liens

b)

Tax lien

c)

Judgment liens

d)

Mortgage lien

60.

A promissory note includes which of the following...?

a)

Amount of debt

b)

Effective date of contrac

c)

List of collateral

d)

All of the Above

61.

A 1031 exchange allows capital gains taxes to be deferred on...?

a)

Less expensive properties only

b)

Like-Kind Properties

c)

Dissimilar properties

d)

Any property

62.

A Lease with Option to Purchase is also known as a...?

a)

Leasehold option

b)

Fee option

c)

Package mortgage

d)

Lease-Purchase Agreement

63.

1 point is equal to...?

a)

0.1%

b)

1%

c)

2%

d)

10%

64.

A term loan is an example of a/an...?

a)

Interest only loan

b)

Gross amortization loan

c)

Gross amortization loan

d)

Adjustable rate loan

65.

This type of loan may be offered to individuals who do not qualify for prime rate loans...?

a)

Sub-Prime Loan

b)

FHA insured loan

c)

Conforming loan

d)

VA loan

66.

In a typical fixed interest rate loan, the longer the term, the lower the...?

a)

Interest rate

b)

Monthly Payments

c)

Total interest paid

d)

All of the above

67.

Which of the following loan terms will yield the lowest monthly payment, assuming a fixed interest rate loan at a 4% interest rate...?

a)

10 years

b)

15 years

c)

20 years

d)

30 years

68.

Which of the following loans are typically utilized by senior homeowners...?

a)

Adjustable rate mortgage

b)

Graduated payment mortgage

c)

Reverse Annuity Mortgage

d)

Term loan

69.

If a lender charges an origination fee of 2 points on a $100,000 loan, how much is paid in origination fees...?

a)

$200

b)

$1,000

c)

$2,000

d)

$20,000

70.

The most common type of loan in a residential transaction is a...?

a)

Term loan

b)

Negative amortization loan

c)

Fixed interest rate loan

d)

Adjustable rate loan

71.

When applying for a VA loan, the Certificate of Reasonable Value essentially serves as the...?

a)

VA Entitlement Certificate

b)

Certificate of Eligibility

c)

Down payment

d)

Appraisal

72.

What is the minimum down payment required on an FHA insured loan for a residential investment property...?

a)

3.5%

b)

5%

c)

10%

d)

20%

73.

VA loans allow up to 4% in ................towards the buyer?

a)

Seller Concessions

b)

Allowances

c)

Closing costs

d)

Origination fees

74.

According to FHA guidelines, the seller can contribute up to ...........of the sales price towards the buyer's closing costs?

a)

1%

b)

1.75%

c)

3%

d)

6%

75.

What is the maximum interest rate change in any one year of a VA adjustable rate mortgage...?

a)

1 Percentage Point

b)

2 percentage points

c)

5 percentage points

d)

7 percentage points

76.

The down payment for an FHA insured loan may be paid using which of the following...?

a)

Cash from the borrower

b)

A gift received by the borrower from a family member

c)

A grant received by the borrower

d)

All of the Above

77.

What is the maximum interest rate change over the life of a VA adjustable rate mortgage...?

a)

2 percentage points

b)

5 percentage points

c)

7 percentage points

d)

10 percentage points

78.

A Uniform Residential Loan Application gets filled out by which of the following...?

a)

The borrower

b)

The broker

c)

The seller

d)

All of the above

79.

The maximum debt-to-income ratio for a VA loan is...?

a)

25%

b)

30%

c)

41%

d)

50%

80.

Loans that were originated prior to ........are generally assumable?

a)

1989

b)

1991

c)

2001

d)

2009

81.

Unique properties are typically valued using which appraisal method...?

a)

Cost approach

b)

CMA

c)

Sales comparison approach

d)

Income capitalization approach

82.

Which of the following is a possible red flag from a seller...?

a)

The seller refuses to disclose certain information on the Sellers Disclosure form

b)

The seller refuses to let buyers know their reason for selling

c)

The seller refuses to reveal the lowest offer they are willing to accept

d)

All of the above

83.

An agent who represents a client owes ..........to that client?

a)

Common duties

b)

Fiduciary duties

c)

Accounting duties

d)

Legal duties

84.

Who is responsible for completing the Seller's Disclosure of Property Condition form...?

a)

The seller's attorney

b)

The buyer

c)

The seller

d)

The seller's broker

85.

Title insurance consists of a contract between an insurance company and a/an...?

a)

Agent

b)

Seller

c)

Broker

d)

Policy holder

86.

Which of the following is considered a physical stigma for a property...?

a)

Lead-based paint

b)

Asbestos

c)

Ground water contamination

d)

All of the above

87.

At closing, property taxes are ............between the buyer and seller?

a)

Appraised

b)

Transferred

c)

Eliminated

d)

Prorated

88.

A buyer should receive a/an .............prior to closing on a property?

a)

Clouded title

b)

Marketable Title

c)

Unmarketable title

d)

Recorded title

89.

An attorney may issue which of the following...?

a)

Chain of title

b)

Survey

c)

Opinion of Title

d)

All of the above

90.

An opinion of value is known as a/an...?

a)

Appraisal

b)

Market analysis

c)

P&L Statement

d)

Statement of value

91.

Residential properties are typically valued using which appraisal method...?

a)

CMA

b)

Income capitalization approach

c)

Cost approach

d)

Sales comparison approach

92.

Which of the following is a major valuation method used by appraisers...?

a)

Income capitalization approach

b)

Sales comparison approach

c)

Cost approach

d)

All of the above

93.

What is the maximum front-end debt-to-income ratio on an FHA loan...?

a)

16%

b)

23%

c)

31%

d)

52%

94.

Unique properties are typically valued using which appraisal method...?

a)

Cost approach

b)

Sales comparison approach

c)

Income capitalization approach

d)

CMA

95.

An appraisal determines an estimate of...?

a)

Assessed value

b)

Fair Market Value

c)

Tax value

d)

Value-in-use

96.

The mortgagor is the...?

a)

Borrower

b)

Lender

c)

Grantor

d)

Broker

97.

A lien created by statute which exists against real property in favor of persons who have performed work or furnished materials for the improvement of the real property is known as a...?

a)

Mechanic's lien

b)

Judgment lien

c)

Tax lien

d)

Mortgage lien

98.

Which of the following is a governmental loan modification program...?

a)

HAMP

b)

CFPB

c)

TILA

d)

RESPA

99.

A deed in lieu of foreclosure is an example of a...?

a)

Voluntary conveyance of deed

b)

Foreclosure auction

c)

Short sale

d)

Discharge

100.

Under an FHA loan, default occurs after ...........of non-payment by the borrower?

a)

2 months

b)

6 months

c)

8 months

d)

12 months

101.

A forbearance on a note is known as a...?

a)

Permanent prohibition

b)

Foreclosure

c)

Lis pendens

d)

Moratorium

102.

A non-judicial foreclosure may be used on a...?

a)

Deed of Trust

b)

Quitclaim Deed

c)

Mortgage

d)

Grant Deed

103.

In a ..............., the court establishes a specific date for the defaulted amount to be paid?

a)

Strict foreclosure

b)

Non-judicial foreclosure

c)

Judicial foreclosure

d)

Express foreclosure

104.

Which of the following liens takes the highest priority over other liens...?

a)

Mortgage lien

b)

Judgment lien

c)

Tax Lien

d)

Mechanic's lien

105.

If a property is sold at a foreclosure auction for an amount less than the amount of outstanding debt on the property, the lender may file for a...?

a)

Express Judgment

b)

Implied Judgment

c)

Recorded Judgment

d)

Deficiency Judgment

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