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WorksheetsAceable Real Estate Finance 1-13 Final Exam
Total questions: 50
Worksheet time: 25mins
Seller Sandra is responsible for 20 days of prorated items in her closing month of September. We can infer that Sandra's sale closed on:
September 20
September 19
September 21
Which of these shows the true cost of a loan and helps consumers compare loans "apples to apples" when they comparison shop?
APR and financing charge
credit score and closing costs
broker commission and commission split
All of these might result in a foreclosure, EXCEPT:
transferring the note to another party
being delinquent in payments
failure to pay property taxes
What are the two primary categories of foreclosure?
judicial and nonjudicial
judicial and administrative
nonjudicial and legal
Which of the following would decrease the amount the seller receives at closing?
a debit to the seller
a credit to the seller
an accrued item
What is one downside of having debt forgiven as part of a foreclosure proceeding?
The forgiven debt will be taxed as income.
The borrower will face a mandatory 15-year ban on financing a home.
The borrower could still be sued for the forgiven debt later.
The right of recovery is waived.
What does the power of sale clause do?
allows a lender to take possession of a property without court approval if a buyer defaults on their loan
requires a borrower to pay back their loan in full if they sell the property
gives a borrower the right to judicial review before foreclosure proceedings commence
Which of these statements is TRUE about Fannie Mae's Desktop Underwriter (DU)?
It doesn't consider FICO scores (credit scores).
Costs more to get approved
Rejects a borrower if they don't qualify
What is one reason a borrower in distress might choose to do a deed in lieu of foreclosure?
It avoids deficiency judgments against the borrower.
It avoids the need to pay off any other, junior loans.
Which of these buildings would be MOST likely to be appraised using the cost approach?
a contemporary art museum in Dallas
a single-family home in Austin
an outlet mall in San Marcos
Which of these buildings would be MOST likely to be appraised using the sales-comparison approach?
a contemporary art museum in Dallas
a single-family home in Austin
an outlet mall in San Marcos
Which of these buildings would be MOST likely to be appraised using the income approach?
a contemporary art museum in Dallas
a single-family home in Austin
an outlet mall in San Marcos
Which of these actions would a mortgage's due-on-sale clause prevent?
Jeremy transfers his existing mortgage to the buyer of his home.
Jessica pays off her remaining mortgage balance in one lump sum.
What clause pre-authorizes the lender to foreclose and sell the property without court oversight or having to file a lawsuit in a nonjudicial foreclosure?
power of sale clause
acceleration clause
Which of the following is not available on lender foreclosures in Texas?
a statutory redemption period
an equitable redemption period
Which loan clause states that whenever there is a breach of contract on the part of the borrower, the lender may make the entire amount of the loan due immediately?
acceleration clause
power of sale clause
When the supply of real estate exceeds the demand for real estate, prices:
Decrease
Increase
Stagnate
Are Not Affected
Tax exemptions are offered for all of the following EXCEPT:
Vacation Homes
Homestead Property
Seniors
Disabled
How does the Federal Deposit Insurance Corporation (FDIC) preserve public confidence in the banking system?
by insuring bank deposits
by forgiving debts
by improving consumer credit scores
What program supports the purchase of land by veterans in Texas?
Texas Veterans Land Board Program
Texas Agricultural Money Program
What is the Truth in Lending Act intended to ensure?
that consumers are able to compare credit terms
that a lawyer is required to explain credit terms
that creditors use a different expression of rates for each loan
The type of mortgage originator that brings borrowers and lenders together, but who has NO money to lend is the:
mortgage broker
mortgage banker
Jack owns ABC Mortgage Company. Jack's primary job is to originate loans for his company and earn fees associated with the origination. ABC Mortgage Company's loans are sold shortly after closing and they re-invest the money into another loan origination. Jack is a(n) ______.
mortgage banker
mortgage broker
What is a registered company that owns and operates commercial real estate on behalf of investors called?
REIT
REMT
In a title theory state, which document is used as the security instrument for the note?
deed of trust
mortgage
promissory note
The contract that spells out the agreement of the loan terms between the borrower and the lender is the:
promissory note
deed of trust
Texas is a
Lien Theory State
Title Theory State
Which one of the following definitions best describes a tax deduction?
a reduction in the taxable amount of a taxpayer’s income
a dollar-for-dollar reduction in a taxpayer’s tax liabilities
Melissa, a sales agent, has noticed an increase in buyer phone calls and an increase in house prices. She also read in the paper that new construction was up 10%. What can this increase in housing be attributed to?
Increase Demand
Increase Supply
Which of these types of loans can always be sold on the secondary mortgage market?
conforming loans
non-conforming loans
What is a mortgage broker?
an individual who brings together borrowers and lenders to create mortgages
an individual who helps consumers get mortgage loans
Which statement best describes the relationship between the primary and secondary mortgage markets?
The secondary market stabilizes the primary market by replenishing funds.
The primary market props up the secondary market by purchasing notes.
Which government agency has the following three tools for influencing monetary policy: setting the discount rate, setting reserve requirements, and open-market operations?
Federal Reserve
Treasury Department
When a loan is amortized, the monthly payments:
Can change each month
Remain the same
The purpose of disclosing the annual percentage rate (APR) is to assist consumers in:
comparing mortgage loans AND seeing one rate that includes both interest and fees
understanding all the risks of the loan terms
The guidelines that determine if a conventional loan is conforming or non-conforming are set by:
Fannie Mae AND Freddie Mac
Fannie Mae AND Farmer Mac
Mitch's ARM has an initial rate of 4.3%. The margin is 2%, and the initial index rate is 2.3%. The initial rate will adjust only once every three years. The lifetime cap is 4%. What is the maximum interest rate that Mitch could pay?
8.3%
6.3%
4.3%
If Emmy has a property worth $320,000 with a $300,000 loan, how much equity does she have in that property?
$20,000
$320,000
$65,000
$285,000
Private mortgage insurance protects:
the lender
the borrower
If the buyer with a low credit score is willing to pay a higher rate of interest, what type of mortgages are they able to get?
prime mortgages
reverse mortgages
subprime mortgages
The FHA ____________ loans for qualified U.S citizens and naturalized residents.
insures
funds
sells
The FHA program is funded solely by:
mortgage insurance premiums
funding fee
If a buyer purchased a property for $350,000 with a loan for 100% of the purchase price, which type of loan did they most likely use?
VA
FHA
What is a funding fee charged on VA loans used for?
to cover the cost of administering the VA home loan program
to pay for the mortgage premium at close
to pay the escrow or title company to reimburse for any closing costs
Which government agency has the following three tools for influencing monetary policy: setting the discount rate, setting reserve requirements, and open-market operations?
Federal Reserve
Treasury Department
What is the difference between the interest rate of an ARM loan and the index value called?
a discount point
the margin
the cap
Some FHA lenders have the authority to approve FHA loans in-house. This is called:
direct endorsement
the secondary mortgage market
What happens to a borrower's PMI when the equity in their property reaches 22%?
It is automatically canceled.
It could be canceled if the borrower requests it.
Debra and Dave are first-time homebuyers. They have okay credit, but don't have a ton of cash for a down payment. Neither has served in the armed services. What kind of loan would they be most likely to utilize?
VA
FHA 203(b)
FHA 203(k)
How does the FHA pay for its loan guarantee program?
Borrowers pay Mortgage Insurance Premium (MIP)
Borrowers pay Private Mortgage Insurance (PMI)
Borrowers pay a funding fee at closing.
