MD REAL ESTATE PSI NATIONAL
EXAM 1 QUESTIONS AND ANSWERS
Usury MOST nearly means - CORRECT ANSWERS ✅✅ -A: illegal interest.
Each state sets its own ceiling for the maximum interest rate lenders may charge. Rates
above that ceiling are considered ________ and ______. No reputable lender exceeds
those rates and those that make a practice of it are commonly known as loan sharks. -
CORRECT ANSWERS ✅✅ -usurious and illegal.
Which of the following describes a mortgage that requires principal and interest
payments at regular intervals and is called the liquidation of debt by periodic installment
until the debt is satisfied?
Amortized loan
Annuity loan
Acceleration loan
Assemblage loan - CORRECT ANSWERS ✅✅ -Amortized loan
the most common form of mortgage where monthly payments include both principal and
interest (as opposed to balloon or interest-only seconds). Typically, monthly payment
amounts remain constant, while the interest portion is higher in the earlier years, giving
homeowners a larger tax deduction with higher percentages of principal paid in the later
years. - CORRECT ANSWERS ✅✅ -amortized loans
An impound or reserve account MOST benefits whom?
The borrower
The lender
The trustee
The trustor - CORRECT ANSWERS ✅✅ -The lender
The transfer of real property ownership from seller to buyer, according to terms and
conditions in a sales contract or escrow agreement; the final stage in a real estate
transaction. - CORRECT ANSWERS ✅✅ -Settlement (also known as Closing or
Loan Consummation)
1. A separate account maintained by a broker for the deposit of clients' money (i.e.,
good faith deposits). Also called Trust Account. 2. The account a lender maintains to
hold a borrower's monthly payments for property insurance and property tax until those
, bills are due. Also called Reserve Account or Impound Account. - CORRECT
ANSWERS ✅✅ -Escrow Account
Also known as escrow accounts, _____________ accounts accumulate funds from
closing costs and monthly payments to ensure that property taxes and homeowner's
insurance are kept current. - CORRECT ANSWERS ✅✅ -impound
The Closing Disclosure (CD) form is:
the document used to make Fair Housing complaints.
provided after signing a listing agreement.
a statement of actual charges and adjustments.
the document that must be displayed in brokerages. - CORRECT ANSWERS ✅✅ -a
statement of actual charges and adjustments.
_________is a standard form in use which is used to itemize services and fees charged
to the borrower by the lender. The form is called for in the TILA RESPA Integrated
Disclosure (TRID). - CORRECT ANSWERS ✅✅ -The Closing Disclosure (CD)
A VA loan may be granted for the purchase of a one-family to four-family property if
the veteran certifies the rent collected will equal the mortgage payments.
the loan will be amortized for not more than 20 years.
the down payment will be at least 10%.
the veteran agrees to live there. - CORRECT ANSWERS ✅✅ -the veteran agrees to
live there.
A standardized measurement expressing the true annual cost of borrowing is expressed
as the what?
ECOA
AGI
APR
RESPA - CORRECT ANSWERS ✅✅ -APR annual percentage rate
A financing instrument that evidences a promise to pay a specific amount of money to a
specific person within a specific time frame. A written, legally binding promise to repay a
debt. - CORRECT ANSWERS ✅✅ -Promissory Note
RESPA would prohibit which of the following acts?
Steering
Paying of kickbacks
Blockbusting
Redlining - CORRECT ANSWERS ✅✅ -Paying of kickbacks
Federal law dealing with real estate closings that provides specific procedures and
guidelines for the disclosure of settlement costs. Implemented by Regulation X, which is
under the oversight of the Consumer Financial Protection Bureau. - CORRECT
ANSWERS ✅✅ -Real Estate Settlement Procedures Act (RESPA)
EXAM 1 QUESTIONS AND ANSWERS
Usury MOST nearly means - CORRECT ANSWERS ✅✅ -A: illegal interest.
Each state sets its own ceiling for the maximum interest rate lenders may charge. Rates
above that ceiling are considered ________ and ______. No reputable lender exceeds
those rates and those that make a practice of it are commonly known as loan sharks. -
CORRECT ANSWERS ✅✅ -usurious and illegal.
Which of the following describes a mortgage that requires principal and interest
payments at regular intervals and is called the liquidation of debt by periodic installment
until the debt is satisfied?
Amortized loan
Annuity loan
Acceleration loan
Assemblage loan - CORRECT ANSWERS ✅✅ -Amortized loan
the most common form of mortgage where monthly payments include both principal and
interest (as opposed to balloon or interest-only seconds). Typically, monthly payment
amounts remain constant, while the interest portion is higher in the earlier years, giving
homeowners a larger tax deduction with higher percentages of principal paid in the later
years. - CORRECT ANSWERS ✅✅ -amortized loans
An impound or reserve account MOST benefits whom?
The borrower
The lender
The trustee
The trustor - CORRECT ANSWERS ✅✅ -The lender
The transfer of real property ownership from seller to buyer, according to terms and
conditions in a sales contract or escrow agreement; the final stage in a real estate
transaction. - CORRECT ANSWERS ✅✅ -Settlement (also known as Closing or
Loan Consummation)
1. A separate account maintained by a broker for the deposit of clients' money (i.e.,
good faith deposits). Also called Trust Account. 2. The account a lender maintains to
hold a borrower's monthly payments for property insurance and property tax until those
, bills are due. Also called Reserve Account or Impound Account. - CORRECT
ANSWERS ✅✅ -Escrow Account
Also known as escrow accounts, _____________ accounts accumulate funds from
closing costs and monthly payments to ensure that property taxes and homeowner's
insurance are kept current. - CORRECT ANSWERS ✅✅ -impound
The Closing Disclosure (CD) form is:
the document used to make Fair Housing complaints.
provided after signing a listing agreement.
a statement of actual charges and adjustments.
the document that must be displayed in brokerages. - CORRECT ANSWERS ✅✅ -a
statement of actual charges and adjustments.
_________is a standard form in use which is used to itemize services and fees charged
to the borrower by the lender. The form is called for in the TILA RESPA Integrated
Disclosure (TRID). - CORRECT ANSWERS ✅✅ -The Closing Disclosure (CD)
A VA loan may be granted for the purchase of a one-family to four-family property if
the veteran certifies the rent collected will equal the mortgage payments.
the loan will be amortized for not more than 20 years.
the down payment will be at least 10%.
the veteran agrees to live there. - CORRECT ANSWERS ✅✅ -the veteran agrees to
live there.
A standardized measurement expressing the true annual cost of borrowing is expressed
as the what?
ECOA
AGI
APR
RESPA - CORRECT ANSWERS ✅✅ -APR annual percentage rate
A financing instrument that evidences a promise to pay a specific amount of money to a
specific person within a specific time frame. A written, legally binding promise to repay a
debt. - CORRECT ANSWERS ✅✅ -Promissory Note
RESPA would prohibit which of the following acts?
Steering
Paying of kickbacks
Blockbusting
Redlining - CORRECT ANSWERS ✅✅ -Paying of kickbacks
Federal law dealing with real estate closings that provides specific procedures and
guidelines for the disclosure of settlement costs. Implemented by Regulation X, which is
under the oversight of the Consumer Financial Protection Bureau. - CORRECT
ANSWERS ✅✅ -Real Estate Settlement Procedures Act (RESPA)
