Texas Real Estate Finance Exam Questions
With Correct Answers
The _______ market refers to the selling and purchasing of closed real estate
| | | | | | | | | | | | |
mortgage loans. - CORRECT ANSWER✔✔-secondary
| | | |
The secondary market is a national market in which mortgages secured by real
| | | | | | | | | | | | |
estate in all parts of the United States are ______ ____ _______. - CORRECT
| | | | | | | | | | | | | |
ANSWER✔✔-bought and sold | |
Secondary market agencies have two main activities: 1) ___ _____ and 2) ______
| | | | | | | | | | | | |
________ ________ _______. - CORRECT ANSWER✔✔-buying loans, issuing
| | | | | | | |
mortgage backed securities | |
__________ exchanges mortgage back securities for a block or pool of mortgages.
| | | | | | | | | | |
- CORRECT ANSWER✔✔-FNMA (Fannie Mae) Federal National Mortgage
| | | | | | | | |
Association
_____ is the nation's largest investor in residential mortgages. - CORRECT
| | | | | | | | | | |
ANSWER✔✔-FNMA
One of the primary responsibilities of _____ is to maintain an active secondary
| | | | | | | | | | | | |
money market for mortgages. - CORRECT ANSWER✔✔-FNMA
| | | | | |
One function of FNMA is selling seasoned mortgages and trust deeds to
| | | | | | | | | | | |
individual investors and financial institutions. A ______ ______ is one that has
| | | | | | | | | | | |
,been in existence for some time and that shows a good record of repayment by
| | | | | | | | | | | | | | |
the mortgagor (borrower) - CORRECT ANSWER✔✔-seasoned mortgage
| | | | | |
To be a _____, a company must distribute at least 90 percent of its taxable
| | | | | | | | | | | | | | |
income to shareholders annually in the forms of dividends. - CORRECT
| | | | | | | | | | |
ANSWER✔✔-REIT
A REIT must: be structured as a corporation, trust, or association; be managed by
| | | | | | | | | | | | | |
a board of directors or trustees; have transferable shares or transferable
| | | | | | | | | | |
certificates of interest; otherwise be taxable as a domestic corporation; not be a
| | | | | | | | | | | | |
financial institution or an insurance company; be jointly owned by 100 persons or
| | | | | | | | | | | |
|more; have 95 percent of its income derived from dividends, interest, and
| | | | | | | | | | | |
property income; pay dividends of at least 90% of the REIT's taxable income; have
| | | | | | | | | | | | |
|no more than 50% of the held by five or fewer individuals during the last half of
| | | | | | | | | | | | | | | | |
each taxable year (5/50 rule); _______ ______ ____ ___ _ _ _ __ _ _ _ ; ______
| | | | | | | | | | | | | | | | | |
__ ____ ___ __ __ __ __ _ __ _ _ _;_____ _ _ _ _ __ _ _ _ __ _ _ - CORRECT
| | | | | | | | | | | | | | | | | | | | | | | | |
ANSWER✔✔-have at least 75% or its total assets invested in real estate; derive at | | | | | | | | | | | | | |
least 75% of its gross income from rents or mortgage interest; have no more than
| | | | | | | | | | | | | |
|20% of it's assets invested in taxable RIETs subsidiaries
| | | | | | | |
______ _____ are those loans that meet the loan purchase requirements of both
| | | | | | | | | | | | |
Fannie Mae and Freddie Mac. - CORRECT ANSWER✔✔-Conforming loans
| | | | | | | |
The two major purposes of the Federal Reserve System, called the FED for short,
| | | | | | | | | | | | | |
are; ______ ____ ___ ___ __ and ____ ___ __ ___ ____ - CORRECT ANSWER✔✔-
| | | | | | | | | | | | | |
supply reserve funds when needed and control bank and consumer credit.
| | | | | | | | | |
The _______ _______ drives the mortgage loan interest rate. - CORRECT
| | | | | | | | | | |
ANSWER✔✔-Federal Reserve |
,The ______ ______has two primary methods of controlling the flow of money in
| | | | | | | | | | | | |
the United States. They control the flow of money by their availability to change
| | | | | | | | | | | | | |
the reserve requirements of the banks and/or changing the discount rate charged
| | | | | | | | | | |
to banks. - CORRECT ANSWER✔✔-Federal Reserve
| | | | | |
________ ____ is the rate the Federal Reserve charges its member bank to
| | | | | | | | | | | | |
borrow money - CORRECT ANSWER✔✔-Discount rate
| | | | |
_______ _____ must belong and any state banks that wish may join the Federal
| | | | | | | | | | | | | |
Reserve System. - CORRECT ANSWER✔✔-National banks
| | | | |
_______ _____ _____ _____(___) is a federal agency that insures deposits in
| | | | | | | | | | | |
commercial banks up to $250,000 and , along with the Federal Reserve System,
| | | | | | | | | | | | |
regulates banks and banking procedures. - CORRECT ANSWER✔✔-Federal
| | | | | | | |
Deposit Insurance Corporation (FDIC)
| | |
_____ _____ is the total of all the loans that a financial institution or other lender
| | | | | | | | | | | | | | |
holds at a given time. A list, distribution, or grouping of mortgage loans. -
| | | | | | | | | | | | | | |
CORRECT ANSWER✔✔-Loan Portfolio | |
____ ____ is the sale of a property where the lender agrees to settle for less than
| | | | | | | | | | | | | | | |
the amount owed on the property - CORRECT ANSWER✔✔-Short sale
| | | | | | | | | |
_______: In the Texas Constitution, a principle residence of a family or adult
| | | | | | | | | | | | |
single person is protected from forced sale for all debt except: property taxes;
| | | | | | | | | | | | |
, federal tax liens of both spouses; a home equity lien.....etc... - CORRECT
| | | | | | | | | | | |
ANSWER✔✔-Homestead
____ ____ and ______ _______ are not the same thing. - CORRECT ANSWER✔✔-
| | | | | | | | | | | |
Community property and joint tenancy | | | |
_____ ____ put a cap on interest rate. - CORRECT ANSWER✔✔-Usuary laws
| | | | | | | | | | |
______ is the state law that prohibits the charging of an interest rate in excess of
| | | | | | | | | | | | | | | |
the legal limit. - CORRECT ANSWER✔✔-Usury
| | | | |
_____ _____ are created to protect the borrower. - CORRECT ANSWER✔✔-
| | | | | | | | | |
Usuary laws |
Under the _____ _____ _____ ___(___) licensees can still be held liable if they
| | | | | | | | | | | | | |
committed an unconscionable act, misrepresented a material fact, or failed to
| | | | | | | | | | |
disclose information with the intention of inducing a consumer into a transaction.
| | | | | | | | | | |
- CORRECT ANSWER✔✔-Deceptive Trade Practice Act (DTPA)
| | | | | | |
The _______ _____ ____ ____(___) states it shall be unlawful for any creditor to
| | | | | | | | | | | | | |
discriminate against any applicant, with respect to any aspect of a credit
| | | | | | | | | | | |
transaction-- on the basis of race, color, religion, national origin, sex or marital
| | | | | | | | | | | | |
status, or age (provided the applicant has the capacity to contract); because all or
| | | | | | | | | | | | |
part of the applicant's income derives from any public assistance program;etc.. -
| | | | | | | | | | | | |
CORRECT ANSWER✔✔-Equal Credit Opportunity Act (ECOA)
| | | | |
With Correct Answers
The _______ market refers to the selling and purchasing of closed real estate
| | | | | | | | | | | | |
mortgage loans. - CORRECT ANSWER✔✔-secondary
| | | |
The secondary market is a national market in which mortgages secured by real
| | | | | | | | | | | | |
estate in all parts of the United States are ______ ____ _______. - CORRECT
| | | | | | | | | | | | | |
ANSWER✔✔-bought and sold | |
Secondary market agencies have two main activities: 1) ___ _____ and 2) ______
| | | | | | | | | | | | |
________ ________ _______. - CORRECT ANSWER✔✔-buying loans, issuing
| | | | | | | |
mortgage backed securities | |
__________ exchanges mortgage back securities for a block or pool of mortgages.
| | | | | | | | | | |
- CORRECT ANSWER✔✔-FNMA (Fannie Mae) Federal National Mortgage
| | | | | | | | |
Association
_____ is the nation's largest investor in residential mortgages. - CORRECT
| | | | | | | | | | |
ANSWER✔✔-FNMA
One of the primary responsibilities of _____ is to maintain an active secondary
| | | | | | | | | | | | |
money market for mortgages. - CORRECT ANSWER✔✔-FNMA
| | | | | |
One function of FNMA is selling seasoned mortgages and trust deeds to
| | | | | | | | | | | |
individual investors and financial institutions. A ______ ______ is one that has
| | | | | | | | | | | |
,been in existence for some time and that shows a good record of repayment by
| | | | | | | | | | | | | | |
the mortgagor (borrower) - CORRECT ANSWER✔✔-seasoned mortgage
| | | | | |
To be a _____, a company must distribute at least 90 percent of its taxable
| | | | | | | | | | | | | | |
income to shareholders annually in the forms of dividends. - CORRECT
| | | | | | | | | | |
ANSWER✔✔-REIT
A REIT must: be structured as a corporation, trust, or association; be managed by
| | | | | | | | | | | | | |
a board of directors or trustees; have transferable shares or transferable
| | | | | | | | | | |
certificates of interest; otherwise be taxable as a domestic corporation; not be a
| | | | | | | | | | | | |
financial institution or an insurance company; be jointly owned by 100 persons or
| | | | | | | | | | | |
|more; have 95 percent of its income derived from dividends, interest, and
| | | | | | | | | | | |
property income; pay dividends of at least 90% of the REIT's taxable income; have
| | | | | | | | | | | | |
|no more than 50% of the held by five or fewer individuals during the last half of
| | | | | | | | | | | | | | | | |
each taxable year (5/50 rule); _______ ______ ____ ___ _ _ _ __ _ _ _ ; ______
| | | | | | | | | | | | | | | | | |
__ ____ ___ __ __ __ __ _ __ _ _ _;_____ _ _ _ _ __ _ _ _ __ _ _ - CORRECT
| | | | | | | | | | | | | | | | | | | | | | | | |
ANSWER✔✔-have at least 75% or its total assets invested in real estate; derive at | | | | | | | | | | | | | |
least 75% of its gross income from rents or mortgage interest; have no more than
| | | | | | | | | | | | | |
|20% of it's assets invested in taxable RIETs subsidiaries
| | | | | | | |
______ _____ are those loans that meet the loan purchase requirements of both
| | | | | | | | | | | | |
Fannie Mae and Freddie Mac. - CORRECT ANSWER✔✔-Conforming loans
| | | | | | | |
The two major purposes of the Federal Reserve System, called the FED for short,
| | | | | | | | | | | | | |
are; ______ ____ ___ ___ __ and ____ ___ __ ___ ____ - CORRECT ANSWER✔✔-
| | | | | | | | | | | | | |
supply reserve funds when needed and control bank and consumer credit.
| | | | | | | | | |
The _______ _______ drives the mortgage loan interest rate. - CORRECT
| | | | | | | | | | |
ANSWER✔✔-Federal Reserve |
,The ______ ______has two primary methods of controlling the flow of money in
| | | | | | | | | | | | |
the United States. They control the flow of money by their availability to change
| | | | | | | | | | | | | |
the reserve requirements of the banks and/or changing the discount rate charged
| | | | | | | | | | |
to banks. - CORRECT ANSWER✔✔-Federal Reserve
| | | | | |
________ ____ is the rate the Federal Reserve charges its member bank to
| | | | | | | | | | | | |
borrow money - CORRECT ANSWER✔✔-Discount rate
| | | | |
_______ _____ must belong and any state banks that wish may join the Federal
| | | | | | | | | | | | | |
Reserve System. - CORRECT ANSWER✔✔-National banks
| | | | |
_______ _____ _____ _____(___) is a federal agency that insures deposits in
| | | | | | | | | | | |
commercial banks up to $250,000 and , along with the Federal Reserve System,
| | | | | | | | | | | | |
regulates banks and banking procedures. - CORRECT ANSWER✔✔-Federal
| | | | | | | |
Deposit Insurance Corporation (FDIC)
| | |
_____ _____ is the total of all the loans that a financial institution or other lender
| | | | | | | | | | | | | | |
holds at a given time. A list, distribution, or grouping of mortgage loans. -
| | | | | | | | | | | | | | |
CORRECT ANSWER✔✔-Loan Portfolio | |
____ ____ is the sale of a property where the lender agrees to settle for less than
| | | | | | | | | | | | | | | |
the amount owed on the property - CORRECT ANSWER✔✔-Short sale
| | | | | | | | | |
_______: In the Texas Constitution, a principle residence of a family or adult
| | | | | | | | | | | | |
single person is protected from forced sale for all debt except: property taxes;
| | | | | | | | | | | | |
, federal tax liens of both spouses; a home equity lien.....etc... - CORRECT
| | | | | | | | | | | |
ANSWER✔✔-Homestead
____ ____ and ______ _______ are not the same thing. - CORRECT ANSWER✔✔-
| | | | | | | | | | | |
Community property and joint tenancy | | | |
_____ ____ put a cap on interest rate. - CORRECT ANSWER✔✔-Usuary laws
| | | | | | | | | | |
______ is the state law that prohibits the charging of an interest rate in excess of
| | | | | | | | | | | | | | | |
the legal limit. - CORRECT ANSWER✔✔-Usury
| | | | |
_____ _____ are created to protect the borrower. - CORRECT ANSWER✔✔-
| | | | | | | | | |
Usuary laws |
Under the _____ _____ _____ ___(___) licensees can still be held liable if they
| | | | | | | | | | | | | |
committed an unconscionable act, misrepresented a material fact, or failed to
| | | | | | | | | | |
disclose information with the intention of inducing a consumer into a transaction.
| | | | | | | | | | |
- CORRECT ANSWER✔✔-Deceptive Trade Practice Act (DTPA)
| | | | | | |
The _______ _____ ____ ____(___) states it shall be unlawful for any creditor to
| | | | | | | | | | | | | |
discriminate against any applicant, with respect to any aspect of a credit
| | | | | | | | | | | |
transaction-- on the basis of race, color, religion, national origin, sex or marital
| | | | | | | | | | | | |
status, or age (provided the applicant has the capacity to contract); because all or
| | | | | | | | | | | | |
part of the applicant's income derives from any public assistance program;etc.. -
| | | | | | | | | | | | |
CORRECT ANSWER✔✔-Equal Credit Opportunity Act (ECOA)
| | | | |
