TX 30 HOUR REAL ESTATE FINANCE PRACTICE EXAM |
198 QUESTIONS AND ANSWERS | 2025/2026 UPDATE
| WITH COMPLETE SOLUTION
Which of the following would the FDIC most likely not insure? Answer - Stock
certificates
In which type of partnership does each mortgagee receive a share of the
mortgage payment? 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? 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?
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? 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, _______. 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? 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. 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? 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? 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? 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. 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? 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? 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? Answer - Seller's market
(When there are more buyers than there are properties, the seller has the
advantage. This is a seller's market.)
What is the trustee's role when a deed of trust is used to secure property for a
loan? Answer - To hold legal title to the property on behalf of the beneficiary
until the loan is repaid
(When a deed of trust is used in a title theory state, the trustee holds legal title
to the property on behalf of the beneficiary.)
198 QUESTIONS AND ANSWERS | 2025/2026 UPDATE
| WITH COMPLETE SOLUTION
Which of the following would the FDIC most likely not insure? Answer - Stock
certificates
In which type of partnership does each mortgagee receive a share of the
mortgage payment? 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? 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?
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? 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, _______. 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? 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. 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? 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? 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? 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. 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? 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? 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? Answer - Seller's market
(When there are more buyers than there are properties, the seller has the
advantage. This is a seller's market.)
What is the trustee's role when a deed of trust is used to secure property for a
loan? Answer - To hold legal title to the property on behalf of the beneficiary
until the loan is repaid
(When a deed of trust is used in a title theory state, the trustee holds legal title
to the property on behalf of the beneficiary.)
