RECA Fundamentals of Mortgage Brokerage 2023 Exam

Which of the following is part of RECA's commitment to consumer protection? - AnswerWhat are some benefits that mortgage brokerage trade associations offer their members? - Answer- Licensing Standards for mortgage industry members Which entity has the authority to amend the Act? - Answer- Provincial Legislators Which of the following represents an accountability mechanism that RECA must comply with under the Act? - Answer- Previous Fiscal year In addition to mortgage brokerage trade associations, other organizations are involved with the industry. Choose the answer below that includes these other organizations. - Answer- Provincial Government, Alberta Real Estate Foundation Law Society of Alberta Federal Government Which of the following is an advantage to the borrower when assuming an existing mortgage? - Answer- Advantages. If the assumable interest rate is lower than current market rates, the buyer saves money straight away Most mortgages provide for a penalty that the borrower pays to the lender for early payment of the debt. Which best describes the penalty that most mortgages have? - Answer- the greater of interest rate differential or three months interest Which statement is correct when calculating the Total Debt Service (TDS) Ratio? - Answer- While the guidelines state that your GDS should be no more than 32% and your TDS should be no more than 40%, Which of the following is included in the definition of 'amortization period'? - AnswerThe amortization period is the length of time it would take to pay off a mortgage in full, Which statement best describes the difference between the mortgage term and the amortization period of a mortgage? - Answer- The mortgage term is the length of time for which the lender loans the funds, while the amortization period is the time required to repay the loan. Rodney has applied for a mortgage through ABC Mortgage Brokers Ltd. The mortgage associate there explains that the term of the mortgage is for 3 years and Rodney is in agreement. While signing the mortgage document with the lawyer, Rodney sees thatthe term is for 5 years. A mistake has occurred. Based on an understanding of contracts, what type of mistake is this? - Answer- Common mistake Common mistake - Answer- Both parties to the agreement share the same fundamental mistake. Mutual Mistake - Answer- both parties have a common but erroneous belief forming the basis of the contract; renders the contract voidable by either party Unitateral - Answer- Occurs when one party holds an erroneous belief and the other party, knowing to be erroneous does