Principles of Real Estate II
Final Exam Questions &
Answers 100% Correct!!
A tenant's personal belongings in apartments may be insured by - ANSWER Obtaining renter's
insurance
Which of the following about a holographic will is FALSE? - ANSWER It can NOT be changed
Which of the following BEST describes why RESPA was passed? - ANSWER To ensure meaningful
disclosure of closing costs in a real estate transaction
Ricky, a borrower, has a mortgage loan that has just been bought by a new investor. Ricky panics, as
his loan conditions are bound to change with the new owner. Evaluate if Ricky's fear is accurate, and
why/why not. - ANSWER Ricky shouldn't worry; even though the loan is being sold by the lender,
Ricky will most likely not be affected at all
Rex purchased an investment property with the intention of renting it out. To finance it, he set up a
partially amortized loan with a balloon payment. What risk could this pose for him as the borrower? -
ANSWER If his property fails to gain anticipated value, Rex could be caught with insufficient funds to
pay for the larger, final balloon payment.
Who is the representative of the title insurance company who reviews the title insurance
commitment, prepares the Closing Disclosure, and conducts the closing? - ANSWER Closing agent
Alicia has two people interested in the lots she is selling. She gives them both a copy of the property
report. She is required to do so under what Act? - ANSWER The Interstate Land Sale Full Disclosure
Act
A tenant has recently signed a lease for a new commercial property. According to the lease terms,
the tenant pays a monthly rent, and the landlord covers maintenance and other property expenses.
This lease is a: - ANSWER Gross lease
, What legislation mandates a nationwide licensing and registration system for residential mortgage
loan originators (MLOs)? - ANSWER SAFE Act (The Secure and Fair Enforcement for Mortgage
Licensing Act)
What is a primary advantage of a REMIC? - ANSWER They offer stability with the variety of
mortgages they contain
Tumi needs to know what her loan principal will be. The property costs $400,000 and she is able to
make a $65,000 down payment. What is her loan principal? - ANSWER $335,000
Joselyn is buying a new condo in New York City. She will close on March 1. The condo has an annual
insurance premium of $8,640. How much of that premium will Joselyn be responsible for if it is
calculated on a 360-day year? - ANSWER $7200
What entity consists of 11 district banks that are regulated by the Federal Housing Finance Agency? -
ANSWER The Federal Home Loan Bank (FHLB) system
Property owner John illegally disposes of toxic waste by burying it underneath his property. The
chemicals leak into a nearby lake and contaminate the water. The EPA can order John to take
responsibility for the cleanup under what law? - ANSWER CERCLA
Which of the following has a long lease term and is often used in the development of commercial
property? - ANSWER Ground lease
What is a fee simple subject to a condition subsequent estate? - ANSWER An estate in which the
property MUST be used for a specific purpose and if it's not, the real estate reverts back to the
original owner
Landlords MUST allow tenants with disabilities to make reasonable modifications to a property so
they can enjoy it. But there are also unreasonable modifications a landlord does NOT have to allow.
All of the following are unreasonable modifications EXCEPT - ANSWER Modifications made at the
tenant's expense
Which of the following is an example of something that would be listed on a Closing Disclosure as a
credit to the buyer? - ANSWER The balance of the buyer's new loan
Final Exam Questions &
Answers 100% Correct!!
A tenant's personal belongings in apartments may be insured by - ANSWER Obtaining renter's
insurance
Which of the following about a holographic will is FALSE? - ANSWER It can NOT be changed
Which of the following BEST describes why RESPA was passed? - ANSWER To ensure meaningful
disclosure of closing costs in a real estate transaction
Ricky, a borrower, has a mortgage loan that has just been bought by a new investor. Ricky panics, as
his loan conditions are bound to change with the new owner. Evaluate if Ricky's fear is accurate, and
why/why not. - ANSWER Ricky shouldn't worry; even though the loan is being sold by the lender,
Ricky will most likely not be affected at all
Rex purchased an investment property with the intention of renting it out. To finance it, he set up a
partially amortized loan with a balloon payment. What risk could this pose for him as the borrower? -
ANSWER If his property fails to gain anticipated value, Rex could be caught with insufficient funds to
pay for the larger, final balloon payment.
Who is the representative of the title insurance company who reviews the title insurance
commitment, prepares the Closing Disclosure, and conducts the closing? - ANSWER Closing agent
Alicia has two people interested in the lots she is selling. She gives them both a copy of the property
report. She is required to do so under what Act? - ANSWER The Interstate Land Sale Full Disclosure
Act
A tenant has recently signed a lease for a new commercial property. According to the lease terms,
the tenant pays a monthly rent, and the landlord covers maintenance and other property expenses.
This lease is a: - ANSWER Gross lease
, What legislation mandates a nationwide licensing and registration system for residential mortgage
loan originators (MLOs)? - ANSWER SAFE Act (The Secure and Fair Enforcement for Mortgage
Licensing Act)
What is a primary advantage of a REMIC? - ANSWER They offer stability with the variety of
mortgages they contain
Tumi needs to know what her loan principal will be. The property costs $400,000 and she is able to
make a $65,000 down payment. What is her loan principal? - ANSWER $335,000
Joselyn is buying a new condo in New York City. She will close on March 1. The condo has an annual
insurance premium of $8,640. How much of that premium will Joselyn be responsible for if it is
calculated on a 360-day year? - ANSWER $7200
What entity consists of 11 district banks that are regulated by the Federal Housing Finance Agency? -
ANSWER The Federal Home Loan Bank (FHLB) system
Property owner John illegally disposes of toxic waste by burying it underneath his property. The
chemicals leak into a nearby lake and contaminate the water. The EPA can order John to take
responsibility for the cleanup under what law? - ANSWER CERCLA
Which of the following has a long lease term and is often used in the development of commercial
property? - ANSWER Ground lease
What is a fee simple subject to a condition subsequent estate? - ANSWER An estate in which the
property MUST be used for a specific purpose and if it's not, the real estate reverts back to the
original owner
Landlords MUST allow tenants with disabilities to make reasonable modifications to a property so
they can enjoy it. But there are also unreasonable modifications a landlord does NOT have to allow.
All of the following are unreasonable modifications EXCEPT - ANSWER Modifications made at the
tenant's expense
Which of the following is an example of something that would be listed on a Closing Disclosure as a
credit to the buyer? - ANSWER The balance of the buyer's new loan
