PRINCIPLES OF REAL ESTATE 2
PRACTICE TEST ACEABLE CORRECT
100%
REO - ANSWER What term describes a property that is owned by a lender because a
third-party buyer couldn't be found at a foreclosure auction?
Real Estate Mortgage Investment Conduit (REMIC) - ANSWER A type of SPV that
holds commercial and residential mortgages in trust, assembles said mortgages into
pools based on risk, and issues bonds (securities) on these pools to sell to investors in
the secondary mortgage market is a(n):
a concession - ANSWER Julio considers leasing an apartment unit from Bruno, the
landlord of an apartment complex. Bruno really wants Julio to sign so the complex
doesn't have vacancies. To convince Julio, Bruno offers to lower Julio's rent $75 per
month for the first six months of Julio's lease. Bruno is offering Julio:
($12,000 x 10%) / 12 X 13 = interest - ANSWER How would you find the interest for a
$12,000 loan with an interest rate of 10% over thirteen months?
affidavit as to debts and lients - ANSWER What is the name for the sworn statement in
which the seller assures the title company (and the buyer) that there are no liens,
unpaid bills for repairs or improvements, or undisclosed defects in the title?
Interstate Land Sales Full Disclosure Act - ANSWER What act requires that applicable
contracts have a 7 day "cooling-off" period for buyers during which buyers can cancel
their contract for any reason and get their money back?
Principle of Conformity - ANSWER Which appraisal principle states that maximum value
is realized when land use is in harmony with surrounding standards?
anticipation - ANSWER Which is NOT one of the three approaches to value?
Actual notice is direct or first-hand knowledge; constructive notice is the assumption of
knowledge because that knowledge is in the public record. - ANSWER What is the
difference between actual and constructive notice?
5,280 - ANSWER How many feet are in a mile?
A partnership where all members equally share responsibilities, profits, and losses. -
ANSWER In terms of syndicates, what is a general partnership?
, FDIC - ANSWER After the bank failures in the 1920s and 1930s, Congress created
what institution to insure customer deposits, supervise financial institutions for safety
and soundness, make large financial institutions resolvable, and manage receiverships?
Real Estate Owned - ANSWER What does "REO" stand for?
Because the buyer has accepted the deed, the only recourse is to sue the seller under
any covenants contained in the deed. - ANSWER A buyer purchased property from a
seller. Shortly after closing, the buyer discovered that there were serious flaws in the
title that made it unlikely that the property could be resold in the future. What is the
buyer's best course of action?
a codicil - ANSWER Which of the following would be used to modify a will?
credit to the buyer and debit to the seller - ANSWER On the Closing Disclosure,
prorated interest paid before closing on an existing assumed mortgage is a:
Which of the following regarding owner's title insurance policies and lender's title
insurance policies is TRUE: - ANSWER owner's policies are usually issued for the sales
price of the property; lender's policies are usually issued on the dollar amount of the
loan
Jake takes out a mortgage loan on a furnished condominium. This mortgage cost
covers the real property, but it also covers personal property like the kitchen appliances,
the velvet purple paisley curtains, and the leather couches in the condominium. What
kind of mortgage does Jake have? - ANSWER package mortgage
What is a gross lease? - ANSWER Lease in which the tenant pays a simple, flat rent
every month
Which of the following is TRUE regarding a fixed-rate mortgage that is fully amortized? -
ANSWER The amount of interest to be paid is predetermined
What methods can be used when determining value through the cost approach? -
ANSWER the square-foot method, the unit-in-place method, and the quantity-survey
method
Property managers will need to provide reports for their property owner, such as a
maintenance report, a rent roll, and an operating statement. The frequency with which
the property manager will need to file these reports should be outlined in the: -
ANSWER management agreement
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
PRACTICE TEST ACEABLE CORRECT
100%
REO - ANSWER What term describes a property that is owned by a lender because a
third-party buyer couldn't be found at a foreclosure auction?
Real Estate Mortgage Investment Conduit (REMIC) - ANSWER A type of SPV that
holds commercial and residential mortgages in trust, assembles said mortgages into
pools based on risk, and issues bonds (securities) on these pools to sell to investors in
the secondary mortgage market is a(n):
a concession - ANSWER Julio considers leasing an apartment unit from Bruno, the
landlord of an apartment complex. Bruno really wants Julio to sign so the complex
doesn't have vacancies. To convince Julio, Bruno offers to lower Julio's rent $75 per
month for the first six months of Julio's lease. Bruno is offering Julio:
($12,000 x 10%) / 12 X 13 = interest - ANSWER How would you find the interest for a
$12,000 loan with an interest rate of 10% over thirteen months?
affidavit as to debts and lients - ANSWER What is the name for the sworn statement in
which the seller assures the title company (and the buyer) that there are no liens,
unpaid bills for repairs or improvements, or undisclosed defects in the title?
Interstate Land Sales Full Disclosure Act - ANSWER What act requires that applicable
contracts have a 7 day "cooling-off" period for buyers during which buyers can cancel
their contract for any reason and get their money back?
Principle of Conformity - ANSWER Which appraisal principle states that maximum value
is realized when land use is in harmony with surrounding standards?
anticipation - ANSWER Which is NOT one of the three approaches to value?
Actual notice is direct or first-hand knowledge; constructive notice is the assumption of
knowledge because that knowledge is in the public record. - ANSWER What is the
difference between actual and constructive notice?
5,280 - ANSWER How many feet are in a mile?
A partnership where all members equally share responsibilities, profits, and losses. -
ANSWER In terms of syndicates, what is a general partnership?
, FDIC - ANSWER After the bank failures in the 1920s and 1930s, Congress created
what institution to insure customer deposits, supervise financial institutions for safety
and soundness, make large financial institutions resolvable, and manage receiverships?
Real Estate Owned - ANSWER What does "REO" stand for?
Because the buyer has accepted the deed, the only recourse is to sue the seller under
any covenants contained in the deed. - ANSWER A buyer purchased property from a
seller. Shortly after closing, the buyer discovered that there were serious flaws in the
title that made it unlikely that the property could be resold in the future. What is the
buyer's best course of action?
a codicil - ANSWER Which of the following would be used to modify a will?
credit to the buyer and debit to the seller - ANSWER On the Closing Disclosure,
prorated interest paid before closing on an existing assumed mortgage is a:
Which of the following regarding owner's title insurance policies and lender's title
insurance policies is TRUE: - ANSWER owner's policies are usually issued for the sales
price of the property; lender's policies are usually issued on the dollar amount of the
loan
Jake takes out a mortgage loan on a furnished condominium. This mortgage cost
covers the real property, but it also covers personal property like the kitchen appliances,
the velvet purple paisley curtains, and the leather couches in the condominium. What
kind of mortgage does Jake have? - ANSWER package mortgage
What is a gross lease? - ANSWER Lease in which the tenant pays a simple, flat rent
every month
Which of the following is TRUE regarding a fixed-rate mortgage that is fully amortized? -
ANSWER The amount of interest to be paid is predetermined
What methods can be used when determining value through the cost approach? -
ANSWER the square-foot method, the unit-in-place method, and the quantity-survey
method
Property managers will need to provide reports for their property owner, such as a
maintenance report, a rent roll, and an operating statement. The frequency with which
the property manager will need to file these reports should be outlined in the: -
ANSWER management agreement
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
