1
CALIFORNIA REAL ESTATE FINANCE FINAL
EXAM LATEST QUESTIONS WITH ANSWERS (100%
CORRECT ANSWERS)
The sequence of the five-step financing process is generally
Funding/Closing, Servicing Answer: Application, Analysis/Processing,
Qualifying/Underwriting, Funding/Closing, Servicing
The Federal Reserve System consists of __ reserve districts, and __ board members. Answer:
12/7
interest-bearing savings accounts represent Answer: time deposits
another name for a "take-out" loan is; Answer: permanent financing or long-term
the financial turmoil in the mid 2000's was NOT fueled by
a. years of greed throughout the finance system
b. relaxation of loan qualifying requirements
c. a reliance on ever-increasing home values
d. the creation of more stringent loan qualifying requirements Answer: D
which of the following characterizes lending policies of life insurance companies;
a. preference for very large projects
b. short payback terms
c. high discount points and fee structure
d. construction loans preferred over take-out loans Answer: A - Preference for very large
projects
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,2
Disintermediation is best described as Answer: a sudden flow of funds from thrift institutions
into the general money
the principal purpse of the Depository Institutions and Monetary Control Act was to; Answer:
phase out restrictions on interest rates that lenders may pay depositors
The agency responsible for chartering and overseeing the operations of national banks and
bank holding companies is the; Answer: OCC- office of the comptroller
The trade association that consists of the major investors and lenders in the mortgage
banking fields is the; Answer: Mortgage Bankers Association
Unlike institutional lenders, private lenders;
a. are highly regulated
b. are subject to California's usury statutes
c. apply uniform lending policies and practices
d. make only second trust deed loans Answer: B
a purchase money loan is best illustrated by; Answer: seller carrying back a first trust deed.
Lending characteristics of private lenders include;
a. high degree of sophistication in loan decisions b. making primarily first trust deed loans c.
charging relatively low interest rates
d. short-term repayment schedules Answer: D
an association of two or more parties who combine their financial resources for achieving
specific investment objectives is best illustrated by a ;
a. real estate investment trust
b. syndication
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, 3
c. general partnership
d. limited partnership Answer: B
All of the following statements regarding the discount rate are true except;
a. the higher the discount rate charged the higher the interest rate charged to the borrower
b. the discount rate is the charge for overnight borrowing from the Fed.
c. any change in the discount rate immediately affects long term mortgage rated
d. the lower the discount rate the greater likehood is of lower borrowing rated by consumers
Answer: C
which of the following receive their capital primarily from gifts, and are a good source for sale-
leaseback financing
a. state-chartered credit unions
b.labor unions
c. endowment funds
d. estate funds Answer: C
alternative mortgage instruments (AIMs) are financing vehicles that
a. are universally standardized
b. offer an alternative to fixed-rate instruments
c. call for level payments throughout the life of the loan
d. call for 30-year repayment schedules Answer: B
The principal objective of AMIs is to;
© 2025 All rights reserved
CALIFORNIA REAL ESTATE FINANCE FINAL
EXAM LATEST QUESTIONS WITH ANSWERS (100%
CORRECT ANSWERS)
The sequence of the five-step financing process is generally
Funding/Closing, Servicing Answer: Application, Analysis/Processing,
Qualifying/Underwriting, Funding/Closing, Servicing
The Federal Reserve System consists of __ reserve districts, and __ board members. Answer:
12/7
interest-bearing savings accounts represent Answer: time deposits
another name for a "take-out" loan is; Answer: permanent financing or long-term
the financial turmoil in the mid 2000's was NOT fueled by
a. years of greed throughout the finance system
b. relaxation of loan qualifying requirements
c. a reliance on ever-increasing home values
d. the creation of more stringent loan qualifying requirements Answer: D
which of the following characterizes lending policies of life insurance companies;
a. preference for very large projects
b. short payback terms
c. high discount points and fee structure
d. construction loans preferred over take-out loans Answer: A - Preference for very large
projects
© 2025 All rights reserved
,2
Disintermediation is best described as Answer: a sudden flow of funds from thrift institutions
into the general money
the principal purpse of the Depository Institutions and Monetary Control Act was to; Answer:
phase out restrictions on interest rates that lenders may pay depositors
The agency responsible for chartering and overseeing the operations of national banks and
bank holding companies is the; Answer: OCC- office of the comptroller
The trade association that consists of the major investors and lenders in the mortgage
banking fields is the; Answer: Mortgage Bankers Association
Unlike institutional lenders, private lenders;
a. are highly regulated
b. are subject to California's usury statutes
c. apply uniform lending policies and practices
d. make only second trust deed loans Answer: B
a purchase money loan is best illustrated by; Answer: seller carrying back a first trust deed.
Lending characteristics of private lenders include;
a. high degree of sophistication in loan decisions b. making primarily first trust deed loans c.
charging relatively low interest rates
d. short-term repayment schedules Answer: D
an association of two or more parties who combine their financial resources for achieving
specific investment objectives is best illustrated by a ;
a. real estate investment trust
b. syndication
© 2025 All rights reserved
, 3
c. general partnership
d. limited partnership Answer: B
All of the following statements regarding the discount rate are true except;
a. the higher the discount rate charged the higher the interest rate charged to the borrower
b. the discount rate is the charge for overnight borrowing from the Fed.
c. any change in the discount rate immediately affects long term mortgage rated
d. the lower the discount rate the greater likehood is of lower borrowing rated by consumers
Answer: C
which of the following receive their capital primarily from gifts, and are a good source for sale-
leaseback financing
a. state-chartered credit unions
b.labor unions
c. endowment funds
d. estate funds Answer: C
alternative mortgage instruments (AIMs) are financing vehicles that
a. are universally standardized
b. offer an alternative to fixed-rate instruments
c. call for level payments throughout the life of the loan
d. call for 30-year repayment schedules Answer: B
The principal objective of AMIs is to;
© 2025 All rights reserved
