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Real Estate Finance

Total questions: 91

Worksheet time: 46mins

Name
Class
Date
1.

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

a)

All of the Above

b)

Inheriting a property from a family member

c)

Obtaining financing to purchase a property

d)

Purchasing a property using all cash

2.

A long term real estate cycle is typically…?

a)

3-5 years

b)

10-15 years

c)

1-2 years

d)

5-7 years

3.

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

a)

Cash down payment

b)

Seller Financing

c)

Credit Cards

d)

Options Money

4.

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

a)

Family and Friends

b)

All of the Above

c)

Insurance Company

d)

Commercial Bank

5.

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

a)

20%

b)

3.5%

c)

50%

d)

10%

6.

The actual ownership of property is known as…?

a)

Secured title

b)

Record Title

c)

Equitable Title

d)

Legal Title

7.

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

a)

Legal Title

b)

Interim Title

c)

Secure title

d)

Equitable title

8.

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

a)

Mortgage

b)

Deed

c)

Promissory Note

d)

Purchase Contract

9.

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

a)

Fannie Mae

b)

All of the Above

c)

Ginnie Mae

d)

Freddie Mac

10.

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

a)

Buyers

b)

Supply

c)

Liquidity

d)

Support

11.

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

a)

Flat Fee

b)

Interest Rate

c)

commission

d)

Variable fee

12.

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

a)

President

b)

Board of Associates

c)

Attorney General

d)

Board of Directors

13.

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

a)

Maintain Reserves

b)

Clear Checks

c)

All of the Above

d)

Comply with rules and reglations of federal reserve

14.

The amount borrowed is known as…?

a)

Interest

b)

Deposit

c)

Principal

d)

Reserves

15.

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

a)

FDIC

b)

FHLB

c)

TILA

d)

RESPA

16.

Instruments of credit can do which of the following…?

a)

Be regulated by member banks of the Federal Reserve

b)

All of the Above

c)

Collect and clear checks

d)

Administer credit controls

17.

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

a)

Attorney general

b)

U.S. Treasury

c)

The Federal Deposit Insurance Corporation

d)

The U.S. Central bank

18.

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)

Office of the Comptroller of the Currency

b)

Troubled Asset Relief Program

c)

The Federal Deposit Insurance Corporation

d)

Truth in Lending Act

19.

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

a)

Manufacturing U.S. coins

b)

Producing U,S, Passports

c)

Producing the Federal Reserve notes

d)

Producing Immigration Certificates

20.

HUD is responsible for which of the following activities…?

a)

All of the Above

b)

Supervise the FHA

c)

Direct Ginnie Mae activities

d)

Enforce the Fair Housing Act

21.

HUD oversees which of the following…?

a)

FHA

b)

All of the Above

c)

GNMA

d)

Housing Choice Vouchers

22.

The Housing Choice Voucher Program is an example of…?

a)

Incentive Housing

b)

Subsidized Housing

c)

Renewal Housing

d)

Standard housing

23.

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

a)

Conventional Loans

b)

VA Loans

c)

FHA Insured Loans

d)

All of the Above

24.

PMI only applies to what types of loans…?

a)

FHA Insured Loans

b)

Conventional Loans

c)

VA Loans

d)

All of the Above

25.

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

a)

Federal Land Bank Association

b)

Production Credit Association

c)

Unimproved Land Association

d)

Raw Land Bank

26.

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

a)

FCS

b)

Farm Credit System

c)

Federal Agricultural Mortgage Corporation

d)

Rural Development Administration

27.

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

a)

Home Mortgage Disclosure Act

b)

Community Reinvestment Act

c)

FNMA

d)

FHLB

28.

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

a)

Community Reinvestment Act

b)

Equal Credit Opportunity Act

c)

Fair Housing Act

d)

Home Mortgage Disclosure Act

29.

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

a)

ARM

b)

Variable Rate Loan

c)

Dynamic Rate Loan

d)

Fixed Interest Rate Loan

30.

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)

Amortization

b)

Negative Amortization

c)

Variable Balance

d)

Reverse Ammortization

31.

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

a)

10 Percent

b)

5 Percent

c)

20 Percent

d)

3.5 Percent

32.

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

a)

MIP

b)

PMI

c)

ADA

d)

ARM

33.

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

a)

Fixed interest rate loan

b)

Fully amortizing loans

c)

Negative Amortization Loans

d)

All of the Above

34.

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

a)

FHA Insured Loan

b)

Unconventional Loan

c)

Conventional Loan

d)

VA Loan

35.

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

a)

Freddie Mac

b)

All of the Above

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)

Appraising

c)

Quantifying

d)

Subsidizing

37.

Which of the following purchases agricultural loans…?

a)

Farmer Mac

b)

Freddie Mac

c)

Ginnie Mae

d)

Fannie Mae

38.

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

a)

Trustee

b)

Trustor

c)

Grantor

d)

Benificiary

39.

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

a)

Records

b)

Implements

c)

Services

d)

Converts

40.

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

a)

Private REIT

b)

Equity REIT

c)

Mortgage REIT

d)

Public REIT

41.

This type of REIT purchases loans…?

a)

Private REIT

b)

Mortgage REIT

c)

Public REIT

d)

Equity REIT

42.

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

a)

Seller Financing

b)

Commercial Financing

c)

Conforming Financing

d)

Reverse Financing

43.

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

a)

Beneficiary

b)

Grantor

c)

Trustor

d)

Trustee

44.

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

a)

Trustee

b)

Trustor

c)

Beneficiary

d)

Guardian

45.

Pension funds typically purchase which of the following…?

a)

Government Securities

b)

Corporate Stocks

c)

Mortgage backed Securities

d)

All of the Above

46.

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

a)

Equity REIT

b)

Mortgage REIT

c)

Private REIT

d)

Public REIT

47.

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

a)

Mortgage Interest

b)

Fees Associated with Originating Fees

c)

All of the Above

d)

Selling Mortgages

48.

A REIT must be owned by at least…?

a)

100 Investors

b)

2 Investors

c)

500 investors

d)

1,000 Investors

49.

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

a)

Specific Lien

b)

Mortgage Lien

c)

General Lien

d)

Judgement Lien

50.

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

a)

Voluntary Lien

b)

Involuntary Lien

c)

Specific Lien

d)

General Lien

51.

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

a)

Leasehold Estate

b)

Fee Simple Estate

c)

Life Estate

d)

All of the Above

52.

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)

Assumption Clause

c)

Due On Sale Clause

d)

Subordination Clause

53.

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

a)

The Seller

b)

Both buyer and Seller

c)

Neither Buyer or Seller

d)

The Buyer

54.

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

a)

Tax Lien

b)

Mortgage Lien

c)

Mechanics Lien

d)

Judgement Liens

55.

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

a)

Encumbrance Rights

b)

Land Rights

c)

Legal Rights

d)

Foreclosure Rights

56.

A promissory note includes which of the following…?

a)

Effective Date of the Contract

b)

List of Collateral

c)

All of the Above

d)

Amount of Debt

57.

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

a)

Judgement Liens

b)

Mechanics Liens

c)

Mortgage Lien

d)

Tax Lien

58.

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

a)

1,000 Dollars

b)

2,000 Dollars

c)

20,000 Dollars

d)

200 Dollars

59.

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

a)

Term Loan

b)

Fixed interest rate loan

c)

Negative amortization loan

d)

Adjustable rate loan

60.

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

a)

Term Loan

b)

Adjustable rate Mortgage

c)

Graduated Payment Mortgage

d)

Reverse annuity mortgage

61.

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

a)

Leasehold Option

b)

Lease-Purchase Agreement

c)

Fee Option

d)

Package Mortgage

62.

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

a)

Total Interest Paid

b)

Interest Rate

c)

Monthly Payments

d)

All of the Above

63.

A term loan is an example of a/an…?

a)

Interest Only Loan

b)

Amortized Loan

c)

Adjustable Rate Loan

d)

Gross Amortization Loan

64.

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

65.

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

a)

Conforming Loan

b)

FHA Insured Loan

c)

Sub-Prime Loan

d)

VA Loan

66.

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

a)

Cash from the borrower

b)

All of the Above

c)

A gift received by the borrower from a family member

d)

A grant received by the borrower

67.

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

a)

10 percent (%)

b)

3.5 percent (%)

c)

20 percent (%)

d)

5 percent (%)

68.

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

a)

6 percent (%)

b)

1.75 percent (%)

c)

3 percent (%)

d)

1 percent (%)

69.

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

a)

2009

b)

2001

c)

1989

d)

1991

70.

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

a)

Sellers Concessions

b)

Origination Fees

c)

Closing Costs

d)

Allowances

71.

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

a)

30 percent (%)

b)

50 percent (%)

c)

41 percent (%)

d)

25 percent (%)

72.

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

a)

VA Entitlement Certificate

b)

Down payment

c)

Certificate of Eligibility

d)

Appraisal

73.

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

a)

2 percentage points

b)

7 percentage points

c)

5 percentage points

d)

10 percentage points

74.

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

a)

16 percent (%)

b)

52 percent (%)

c)

23 percent (%)

d)

31 percent (%)

75.

What is the maximum back-end debt-to-income ratio on an FHA loan…?

a)

43 percent (%)

b)

23 percent (%)

c)

52 percent (%)

d)

16 percent (%)

76.

Residential properties are typically valued using which appraisal method…?

a)

CMA

b)

Income capitalization approach

c)

Cost approach

d)

Sales comparison approach

77.

Unique properties are typically valued using which appraisal method…?

a)

Sales comparison approach

b)

Income capitalization approach

c)

Cost approach

d)

CMA

78.

An attorney may issue which of the following…?

a)

All of the above

b)

Survey

c)

Opinion of title

d)

Chain of title

79.

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

a)

Market analysis

b)

Statement of value

c)

P&L Statement

d)

Appraisal

80.

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

a)

Transferred

b)

Prorated

c)

Eliminated

d)

Appraised

81.

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

a)

Recorded title

b)

Clouded Title

c)

Marketable Title

d)

Unmarketable title

82.

An appraisal determines an estimate of…?

a)

Fair Market Value

b)

Value in use

c)

Asessed Value

d)

Tax Value

83.

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

a)

Mechanics Lien

b)

Judgement Lien

c)

Mortgage Lien

d)

Tax Lien

84.

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

a)

HAMP

b)

RESPA

c)

TILA

d)

CFPB

85.

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

a)

Discharge

b)

Short Sale

c)

Voluntary Conveyeance of Deed

d)

Foreclosure Auction

86.

The mortgagor is the…?

a)

Lender

b)

Borrower

c)

Grantor

d)

Broker

87.

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)

Recorded Judgment

b)

Implied Judgment

c)

Deficiency Judgment

d)

Express Judgement

88.

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

a)

12 Months

b)

6 Months

c)

8 Months

d)

2 Months

89.

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

a)

Strict foreclosure

b)

Judicial foreclosure

c)

Non-judicial foreclosure

d)

Express foreclosure

90.

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)

Tax Lien

b)

Mechanics Lien

c)

Mortgage Lien

d)

Judgement Lien

91.

A forbearance on a note is known as a…?

a)

Permanent Prohibition

b)

Lis Pendens

c)

Foreclosure

d)

Moratorium

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