Real Estate Chapter 11 True/False
Freddie Mac and Fannie Mae standardize loan qualification and underwriting
standards in the primary market - CORRECT ANSWER-True - Freddie Mac and
Fannie Mae influence but do not participate directly in the primary market
Reverse mortgages provide financing for first-time home buyers with low down
payments but good future earning potential - CORRECT ANSWER-False -
Individuals age 62 and over may benefit from a reverse mortgage by receiving
monthly payments drawn from the equity in their homes
The seller maintains legal title under a purchase money mortgage - CORRECT
ANSWER-False - A buyer obtains legal title under a purchase money mortgage
Regulation Z does not apply to small business loans - CORRECT ANSWER-True
- Regulation Z regulates consumer credit that either involves a finance charge or
by written agreement be payable in more than four installments
FHA requires certain construction standards before insuring a loan - CORRECT
ANSWER-True - FHA appraisals require a basic survey of the physical aspects
of the home. Home defects must be disclosed by the appraiser to the borrower
and typically must be repaired prior to closing
The VA certificate of reasonable value sets the maximum guarantee to which a
veteran is entitled - CORRECT ANSWER-False - For a VA loan, the certificate of
eligibility sets the maximum guarantee to which the veteran is entitled
The federal government insures FHA loans - CORRECT ANSWER-True - If the
homeowner defaults on the mortgage, the lending institution does not incur any
significant loss since the FHA insured the lender against risk
A land contract is the same as an installment contract or a contract for deed -
CORRECT ANSWER-True - Under a land contract, the seller agrees to finance
the sale for a specified period
Freddie Mac and Fannie Mae standardize loan qualification and underwriting
standards in the primary market - CORRECT ANSWER-True - Freddie Mac and
Fannie Mae influence but do not participate directly in the primary market
Reverse mortgages provide financing for first-time home buyers with low down
payments but good future earning potential - CORRECT ANSWER-False -
Individuals age 62 and over may benefit from a reverse mortgage by receiving
monthly payments drawn from the equity in their homes
The seller maintains legal title under a purchase money mortgage - CORRECT
ANSWER-False - A buyer obtains legal title under a purchase money mortgage
Regulation Z does not apply to small business loans - CORRECT ANSWER-True
- Regulation Z regulates consumer credit that either involves a finance charge or
by written agreement be payable in more than four installments
FHA requires certain construction standards before insuring a loan - CORRECT
ANSWER-True - FHA appraisals require a basic survey of the physical aspects
of the home. Home defects must be disclosed by the appraiser to the borrower
and typically must be repaired prior to closing
The VA certificate of reasonable value sets the maximum guarantee to which a
veteran is entitled - CORRECT ANSWER-False - For a VA loan, the certificate of
eligibility sets the maximum guarantee to which the veteran is entitled
The federal government insures FHA loans - CORRECT ANSWER-True - If the
homeowner defaults on the mortgage, the lending institution does not incur any
significant loss since the FHA insured the lender against risk
A land contract is the same as an installment contract or a contract for deed -
CORRECT ANSWER-True - Under a land contract, the seller agrees to finance
the sale for a specified period
