Texas Real Estate Finance Solved Exam
Questions and Answers (Complete
Practice
secondary - CORRECT ANSWERS The _______ market refers to the selling and purchasing of
closed real estate mortgage loans.
bought and sold - CORRECT ANSWERS The secondary market is a national market in which
mortgages secured by real estate in all parts of the United States are ______ ____ _______.
buying loans, issuing mortgage backed securities - CORRECT ANSWERS Secondary market
agencies have two main activities: 1) ___ _____ and 2) ______ ________ ________ _______.
FNMA (Fannie Mae) Federal National Mortgage Association - CORRECT ANSWERS __________
exchanges mortgage back securities for a block or pool of mortgages.
FNMA - CORRECT ANSWERS _____ is the nation's largest investor in residential mortgages.
FNMA - CORRECT ANSWERS One of the primary responsibilities of _____ is to maintain an
active secondary money market for mortgages.
seasoned mortgage - CORRECT ANSWERS 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)
REIT - CORRECT ANSWERS To be a _____, a company must distribute at least 90 percent of its
taxable income to shareholders annually in the forms of dividends.
,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 -
CORRECT ANSWERS 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); _______ ______ ____ ___ _ _ _ __ _ _ _ ; ______ __ ____ ___ __ __ __ __ _ __ _ _ _;_____ _
_ _ _ __ _ _ _ __ _ _
Conforming loans - CORRECT ANSWERS ______ _____ are those loans that meet the loan
purchase requirements of both Fannie Mae and Freddie Mac.
supply reserve funds when needed and control bank and consumer credit. - CORRECT ANSWERS
The two major purposes of the Federal Reserve System, called the FED for short, are; ______ ____ ___
___ __ and ____ ___ __ ___ ____
Federal Reserve - CORRECT ANSWERS The _______ _______ drives the mortgage loan interest
rate.
Federal Reserve - CORRECT ANSWERS 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.
Discount rate - CORRECT ANSWERS ________ ____ is the rate the Federal Reserve charges its
member bank to borrow money
National banks - CORRECT ANSWERS _______ _____ must belong and any state banks that
wish may join the Federal Reserve System.
, Federal Deposit Insurance Corporation (FDIC) - CORRECT ANSWERS _______ _____ _____
_____(___) 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.
Loan Portfolio - CORRECT ANSWERS _____ _____ 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.
Short sale - CORRECT ANSWERS ____ ____ is the sale of a property where the lender agrees to
settle for less than the amount owed on the property
Homestead - CORRECT ANSWERS _______: 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...
Community property and joint tenancy - CORRECT ANSWERS ____ ____ and ______ _______
are not the same thing.
Usuary laws - CORRECT ANSWERS _____ ____ put a cap on interest rate.
Usury - CORRECT ANSWERS ______ is the state law that prohibits the charging of an interest
rate in excess of the legal limit.
Usuary laws - CORRECT ANSWERS _____ _____ are created to protect the borrower.
Deceptive Trade Practice Act (DTPA) - CORRECT ANSWERS 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.
Questions and Answers (Complete
Practice
secondary - CORRECT ANSWERS The _______ market refers to the selling and purchasing of
closed real estate mortgage loans.
bought and sold - CORRECT ANSWERS The secondary market is a national market in which
mortgages secured by real estate in all parts of the United States are ______ ____ _______.
buying loans, issuing mortgage backed securities - CORRECT ANSWERS Secondary market
agencies have two main activities: 1) ___ _____ and 2) ______ ________ ________ _______.
FNMA (Fannie Mae) Federal National Mortgage Association - CORRECT ANSWERS __________
exchanges mortgage back securities for a block or pool of mortgages.
FNMA - CORRECT ANSWERS _____ is the nation's largest investor in residential mortgages.
FNMA - CORRECT ANSWERS One of the primary responsibilities of _____ is to maintain an
active secondary money market for mortgages.
seasoned mortgage - CORRECT ANSWERS 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)
REIT - CORRECT ANSWERS To be a _____, a company must distribute at least 90 percent of its
taxable income to shareholders annually in the forms of dividends.
,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 -
CORRECT ANSWERS 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); _______ ______ ____ ___ _ _ _ __ _ _ _ ; ______ __ ____ ___ __ __ __ __ _ __ _ _ _;_____ _
_ _ _ __ _ _ _ __ _ _
Conforming loans - CORRECT ANSWERS ______ _____ are those loans that meet the loan
purchase requirements of both Fannie Mae and Freddie Mac.
supply reserve funds when needed and control bank and consumer credit. - CORRECT ANSWERS
The two major purposes of the Federal Reserve System, called the FED for short, are; ______ ____ ___
___ __ and ____ ___ __ ___ ____
Federal Reserve - CORRECT ANSWERS The _______ _______ drives the mortgage loan interest
rate.
Federal Reserve - CORRECT ANSWERS 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.
Discount rate - CORRECT ANSWERS ________ ____ is the rate the Federal Reserve charges its
member bank to borrow money
National banks - CORRECT ANSWERS _______ _____ must belong and any state banks that
wish may join the Federal Reserve System.
, Federal Deposit Insurance Corporation (FDIC) - CORRECT ANSWERS _______ _____ _____
_____(___) 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.
Loan Portfolio - CORRECT ANSWERS _____ _____ 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.
Short sale - CORRECT ANSWERS ____ ____ is the sale of a property where the lender agrees to
settle for less than the amount owed on the property
Homestead - CORRECT ANSWERS _______: 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...
Community property and joint tenancy - CORRECT ANSWERS ____ ____ and ______ _______
are not the same thing.
Usuary laws - CORRECT ANSWERS _____ ____ put a cap on interest rate.
Usury - CORRECT ANSWERS ______ is the state law that prohibits the charging of an interest
rate in excess of the legal limit.
Usuary laws - CORRECT ANSWERS _____ _____ are created to protect the borrower.
Deceptive Trade Practice Act (DTPA) - CORRECT ANSWERS 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.
