TX 30 Hour Real Estate Finance Practice
Exam Questions With Correct Answers
Which of the following would the FDIC most likely not insure? - CORRECT
| | | | | | | | | | | | |
ANSWER✔✔-Stock certificates |
In which type of partnership does each mortgagee receive a share of the
| | | | | | | | | | | | |
mortgage payment? - CORRECT ANSWER✔✔-Partnership among mortgagees
| | | | | |
(In a partnership among mortgagees several mortgagees come together, usually
| | | | | | | | | |
to finance a large project. They contribute an equal share of funding in exchange
| | | | | | | | | | | | | |
for equal share of the mortgage payments.)
| | | | | |
What information does Schedule B-1 of a title commitment provide? - CORRECT
| | | | | | | | | | | |
ANSWER✔✔-Requirements that must met before a title policy will be issued | | | | | | | | | |
(Schedule B-1 lists items the title insurance company requires to be addressed
| | | | | | | | | | | |
before they'll issue the title insurance policy. This may include resolving liens or
| | | | | | | | | | | | |
paying taxes that are due, among other items.)
| | | | | | |
In which type of partnership is there is more than one mortgagor as owner? -
| | | | | | | | | | | | | | |
CORRECT ANSWER✔✔-Partnership among mortgagors
| | |
(A partnership among mortgagors involves several mortgagors sharing
| | | | | | | |
responsibility for a single mortgage. This is usually on a multi-family dwelling, and
| | | | | | | | | | | |
|may be called a cooperative.)
| | | |
,Mutual savings banks prefer to keep their lending activities in their immediate
| | | | | | | | | | | |
geographic area. Why? - CORRECT ANSWER✔✔-They prefer to personally
| | | | | | | | |
monitor the loans they issue. | | | |
(Mutual savings banks prefer to keep their mortgage lending in the immediate
| | | | | | | | | | | |
geographic area (think East Coast) so they can closely monitor the loans.)
| | | | | | | | | | |
From a lender's perspective, the lower the credit score, _______. - CORRECT
| | | | | | | | | | | |
ANSWER✔✔-The higher the risk | | |
(A credit score is a number ranging between 300 and 850. The lower the number,
| | | | | | | | | | | | | | |
the higher the risk.)
| | |
Maria is a borrower reviewing her Closing Disclosure. She notices a section under
| | | | | | | | | | | |
"Other Costs" with a number of fees that were not shown on her Loan Estimate,
| | | | | | | | | | | | | | | |
such as the commissions to the real estate brokers and the home inspection fee.
| | | | | | | | | | | | | |
Should Maria contact her lender about this issue? - CORRECT ANSWER✔✔-No,
| | | | | | | | | | |
these are costs that are part of the total cost to close but aren't part of obtaining
| | | | | | | | | | | | | | | | |
the loan, so they weren't required to be on the Loan Estimate.
| | | | | | | | | | |
(Maria can always contact her lender for an explanation, but the fees listed in this
| | | | | | | | | | | | | |
|section are not shown on the Loan Estimate because they aren't part of
| | | | | | | | | | | | |
obtaining the loan, and aren't required on that form.)
| | | | | | | |
The ______ was enacted in 1968 as part of the Consumer Credit Protection Act. -
| | | | | | | | | | | | | | |
CORRECT ANSWER✔✔-Truth in Lending Act | | | |
,(The Truth in Lending Act (TILA) was enacted in 1968 and requires lenders to
| | | | | | | | | | | | | |
disclose financing terms to consumers in a manner that's not misleading or
| | | | | | | | | | | |
deceitful.)
Mike's been friends with Tim since college. They often work together: Mike flips
| | | | | | | | | | | | |
houses and Tim's an appraiser that he uses frequently. It works out great for both
| | | | | | | | | | | | | |
|friends and Mike definitely gets a better appraised value on the flips Tim handles.
| | | | | | | | | | | | |
|For every appraisal Tim handles for him, Mike gives him a $100 gift card. In what
| | | | | | | | | | | | | | | |
illegal practice does it sound like they're engaging? - CORRECT ANSWER✔✔-
| | | | | | | | | |
Falsely inflating appraisals
| |
(An inflated appraisal occurs when an appraiser intentionally submits a
| | | | | | | | | |
misleading report to a lender that indicates an inflated property value. Inflated
| | | | | | | | | | | |
appraisals are illegal and can get both of these guys in trouble.)
| | | | | | | | | | |
Vantagestar Ltd. would like to construct a high-end condominium complex.
| | | | | | | | | |
Where will they likely go for financing this project? - CORRECT ANSWER✔✔-A life
| | | | | | | | | | | | |
insurance company |
(This is a project for a life insurance company because they prefer to be involved
| | | | | | | | | | | | | | |
with large commercial projects.)
| | |
Which of the following types of residential dwellings do life insurance companies
| | | | | | | | | | | |
purchase from the secondary mortgage market? - CORRECT ANSWER✔✔-Single-
| | | | | | | |
family on one lot
| | |
, (Life insurance companies purchase single-family homes from the secondary
| | | | | | | | |
market.)
The Federal Housing Administration's qualifying standards for a mortgage loan
| | | | | | | | | |
______, but the mortgage insurance the FHA provides balances the risk for the
| | | | | | | | | | | | |
lender. - CORRECT ANSWER✔✔-Are somewhat less stringent than standards for
| | | | | | | | | |
conventional loans |
(FHA qualification standards are less stringent than standards for conventional
| | | | | | | | | |
loans, but a down payment is required.)
| | | | | |
How is a loan assumption documented? - CORRECT ANSWER✔✔-The buyer and
| | | | | | | | | | |
seller both sign an assumption agreement.
| | | | |
(If the lender agrees to let the buyer assume the loan, an assumption agreement
| | | | | | | | | | | | | |
between buyer and seller documents the change.)
| | | | | |
Which generation financed their homes due to also having other debt
| | | | | | | | | | |
obligations? - CORRECT ANSWER✔✔-Echo Boomers | | | |
(Financing is how Echo Boomers were able to purchase homes since they were
| | | | | | | | | | | | |
also paying off school loans.)
| | | |
There are fewer properties available in the market than there are interested
| | | | | | | | | | | |
buyers. What type of market does this describe? - CORRECT ANSWER✔✔-Seller's
| | | | | | | | | | |
market
Exam Questions With Correct Answers
Which of the following would the FDIC most likely not insure? - CORRECT
| | | | | | | | | | | | |
ANSWER✔✔-Stock certificates |
In which type of partnership does each mortgagee receive a share of the
| | | | | | | | | | | | |
mortgage payment? - CORRECT ANSWER✔✔-Partnership among mortgagees
| | | | | |
(In a partnership among mortgagees several mortgagees come together, usually
| | | | | | | | | |
to finance a large project. They contribute an equal share of funding in exchange
| | | | | | | | | | | | | |
for equal share of the mortgage payments.)
| | | | | |
What information does Schedule B-1 of a title commitment provide? - CORRECT
| | | | | | | | | | | |
ANSWER✔✔-Requirements that must met before a title policy will be issued | | | | | | | | | |
(Schedule B-1 lists items the title insurance company requires to be addressed
| | | | | | | | | | | |
before they'll issue the title insurance policy. This may include resolving liens or
| | | | | | | | | | | | |
paying taxes that are due, among other items.)
| | | | | | |
In which type of partnership is there is more than one mortgagor as owner? -
| | | | | | | | | | | | | | |
CORRECT ANSWER✔✔-Partnership among mortgagors
| | |
(A partnership among mortgagors involves several mortgagors sharing
| | | | | | | |
responsibility for a single mortgage. This is usually on a multi-family dwelling, and
| | | | | | | | | | | |
|may be called a cooperative.)
| | | |
,Mutual savings banks prefer to keep their lending activities in their immediate
| | | | | | | | | | | |
geographic area. Why? - CORRECT ANSWER✔✔-They prefer to personally
| | | | | | | | |
monitor the loans they issue. | | | |
(Mutual savings banks prefer to keep their mortgage lending in the immediate
| | | | | | | | | | | |
geographic area (think East Coast) so they can closely monitor the loans.)
| | | | | | | | | | |
From a lender's perspective, the lower the credit score, _______. - CORRECT
| | | | | | | | | | | |
ANSWER✔✔-The higher the risk | | |
(A credit score is a number ranging between 300 and 850. The lower the number,
| | | | | | | | | | | | | | |
the higher the risk.)
| | |
Maria is a borrower reviewing her Closing Disclosure. She notices a section under
| | | | | | | | | | | |
"Other Costs" with a number of fees that were not shown on her Loan Estimate,
| | | | | | | | | | | | | | | |
such as the commissions to the real estate brokers and the home inspection fee.
| | | | | | | | | | | | | |
Should Maria contact her lender about this issue? - CORRECT ANSWER✔✔-No,
| | | | | | | | | | |
these are costs that are part of the total cost to close but aren't part of obtaining
| | | | | | | | | | | | | | | | |
the loan, so they weren't required to be on the Loan Estimate.
| | | | | | | | | | |
(Maria can always contact her lender for an explanation, but the fees listed in this
| | | | | | | | | | | | | |
|section are not shown on the Loan Estimate because they aren't part of
| | | | | | | | | | | | |
obtaining the loan, and aren't required on that form.)
| | | | | | | |
The ______ was enacted in 1968 as part of the Consumer Credit Protection Act. -
| | | | | | | | | | | | | | |
CORRECT ANSWER✔✔-Truth in Lending Act | | | |
,(The Truth in Lending Act (TILA) was enacted in 1968 and requires lenders to
| | | | | | | | | | | | | |
disclose financing terms to consumers in a manner that's not misleading or
| | | | | | | | | | | |
deceitful.)
Mike's been friends with Tim since college. They often work together: Mike flips
| | | | | | | | | | | | |
houses and Tim's an appraiser that he uses frequently. It works out great for both
| | | | | | | | | | | | | |
|friends and Mike definitely gets a better appraised value on the flips Tim handles.
| | | | | | | | | | | | |
|For every appraisal Tim handles for him, Mike gives him a $100 gift card. In what
| | | | | | | | | | | | | | | |
illegal practice does it sound like they're engaging? - CORRECT ANSWER✔✔-
| | | | | | | | | |
Falsely inflating appraisals
| |
(An inflated appraisal occurs when an appraiser intentionally submits a
| | | | | | | | | |
misleading report to a lender that indicates an inflated property value. Inflated
| | | | | | | | | | | |
appraisals are illegal and can get both of these guys in trouble.)
| | | | | | | | | | |
Vantagestar Ltd. would like to construct a high-end condominium complex.
| | | | | | | | | |
Where will they likely go for financing this project? - CORRECT ANSWER✔✔-A life
| | | | | | | | | | | | |
insurance company |
(This is a project for a life insurance company because they prefer to be involved
| | | | | | | | | | | | | | |
with large commercial projects.)
| | |
Which of the following types of residential dwellings do life insurance companies
| | | | | | | | | | | |
purchase from the secondary mortgage market? - CORRECT ANSWER✔✔-Single-
| | | | | | | |
family on one lot
| | |
, (Life insurance companies purchase single-family homes from the secondary
| | | | | | | | |
market.)
The Federal Housing Administration's qualifying standards for a mortgage loan
| | | | | | | | | |
______, but the mortgage insurance the FHA provides balances the risk for the
| | | | | | | | | | | | |
lender. - CORRECT ANSWER✔✔-Are somewhat less stringent than standards for
| | | | | | | | | |
conventional loans |
(FHA qualification standards are less stringent than standards for conventional
| | | | | | | | | |
loans, but a down payment is required.)
| | | | | |
How is a loan assumption documented? - CORRECT ANSWER✔✔-The buyer and
| | | | | | | | | | |
seller both sign an assumption agreement.
| | | | |
(If the lender agrees to let the buyer assume the loan, an assumption agreement
| | | | | | | | | | | | | |
between buyer and seller documents the change.)
| | | | | |
Which generation financed their homes due to also having other debt
| | | | | | | | | | |
obligations? - CORRECT ANSWER✔✔-Echo Boomers | | | |
(Financing is how Echo Boomers were able to purchase homes since they were
| | | | | | | | | | | | |
also paying off school loans.)
| | | |
There are fewer properties available in the market than there are interested
| | | | | | | | | | | |
buyers. What type of market does this describe? - CORRECT ANSWER✔✔-Seller's
| | | | | | | | | | |
market
