Idaho Real Estate Test Questions & Answers Correct 100%

addendum - Answer an addendum is a document attached to and made part of the original contract it is important to do what when adding an addendum? - Answer always be accurate and specific about what is being added or modified, including which contract will be affected. licensed real estate agents should? - Answer be able to identify when they are able to provide assistance to their clients as well as when they should recommend the use of a professional every loan for real estate is made up of two elements. they are: - Answer a promissory note & a security instrument a promissory note - Answer A borrower's personal promise to repay a debt according to the agreed terms. a security instrument - Answer attaches the real estate to the promissory note & gives lenders (bank) the authority to seize defaulted property usury - Answer the illegal action or practice of lending money at unreasonably high rates of interest. discount points - Answer A fee charged by the lender at settlement that results in increasing the lender's effective yield on the money borrowed. One discount point equals one percent of the loan amount. hypothecation - Answer To pledge property as collateral (security) for an obligation or loan without giving up possession of it. title theory - Answer The mortgagor gives the mortgage legal title and retains equitable title, upon full payment legal title is returned lien theory - Answer The mortgagor retains both legal and equitable title, while the mortgagee has a lien to the property as security for a debt. deed of trust - Answer similar, but not identical to, a mortgage; the main differences appear when a foreclosure action starts contracts for deed (land sale contracts) - Answer a buyer and seller execute a payment plan and the buyer gets to move onto the property and treat it as their own. When the last payment has been made, the seller deeds the property to the buyer. If the buyer misses a payment, the seller can reenter the property and Immediately seize because the are rightful owners. vendor - Answer (n.) a person who sells something vendee - Answer buyer Deed of Reconveyance - Answer a recorded document that gives notice that the loan has been paid in full - a trustee uses deed to transfer the title back to the trustor (borrower) acceleration clause - Answer a statement in a credit contract that requires you to repay the entire loan immediately if you miss a payment Foreclosure - Answer A legal procedure whereby property pledged as collateral is sold to satisfy the debt in the event of default in payment of the mortgage note or default of other terms in the note. judicial foreclosure - Answer allows the property to be sold by court order after the mortgagee has given sufficient public notice redemption period - Answer The right of a mortgagor to make good (repurchase) on the default within a specified time and receive the property back. redemption period timeframe - Answer properties 20 acres: 6 months properties 20 acres: 12 months short sale - Answer sale of property that produces less money than what is owed to the lender (remaining indebtedness) amortized loan - Answer A loan in which the principal as well as the interest is payable in monthly or other periodic installments over the term of the loan. fannie mae - Answer The government-sponsored enterprise responsible for guaranteeing and funding home mortgages (fha, va, conventional) freddie mac - Answer A government supervised enterprise established to purchase primarily conventional mortgage loans in the secondary mortgage market. ginnie mae - Answer A government agency that is a division of HUD - plays an important role in the secondary mortgage market it guarantees mortgage backed securities using FHA insured and VA guaranteed loans as collateral. loans are classified by: - Answer loan-to-value ratio loan-to-ratio value - Answer - Ratio of the amount of a mortgage loan to the value of the secured real property. E.g. loan is $80k, and market value is $100k, loan-to-value ratio is 80%. loan programs - Answer the lower the ratio of debt to value, the higher the down payment; a more secure loan minimizes the lender's risk TILA - Answer truth-in-lending act CFPB - Answer consumer financial protection bureau truth-in-lending act (TILA) and regulation Z: - Answer enforced by the consumer financial protection bureau (CFPB) TILA & CFPB - Answer always applies when a residence collaterizes the loan - does not apply to agricultural, business, or commercial loans equal credit opportunity act (ECOA) - Answer A federal act, which prohibits lenders and those who grant or arrange credit to consumers from discriminating ECOA prevents discrimination based on: - Answer race color religion national origin sex marital status age receipt of public assistance advertising requirements must contain: - Answer the brokers licensed business name sellers of residential real property MUST complete a property condition disclosure form to the best of their knowledge _____ days from acceptance of offer - Answer 10 calender days the buyer has _____ days following delivery of the disclosure form to rescind their offer - Answer 3 business days title - Answer the right to and evidence of ownership of land deed - Answer the instrument that conveys property from grantor to grantee grantor - Answer the party giving/selling the property