Champions Real Estate Finance Exam Questions with Verified
Answers |2026/2027 Update | A+ Graded
Sub-Prime Loans - Answer -Have risk-based pricing. The rates are not published on these loans.
Borrowers are rated A-F with a prime borrower having an A rating. A minus to F-rated borrowers will pay
1 to 5 % higher than those with good credit. These are non-conforming loans.
prepayment penalties - Answer -More than two-thirds of sub-prime loans have this.
Corporate Bond - Answer -debt instrument issued by a corporation to raise long-term funds
Predatory Lending - Answer -when an unscrupulous lender takes advantage of a consumer's lack of
knowledge regarding lending practices
Property Flipping - Answer -Is an elaborate scam in which unsuspecting first-time homebuyers are sold
houses in serious states of disrepair for prices far above what the houses are actually worth.
Straw Buyer - Answer -Is a person who is used to buy property in order to conceal the actual owner.
1|Page
,Equity Theft - Answer -Occurs when fraudsters forge a deed transfer or a satisfaction lien, and then
obtain new liens on the property.
Churning - Answer -Is excessive selling/lending activity for the purpose of generating fees and
commissions.
Chunking - Answer -occurs when a fraudster promises to show investors how to get rich by buying
investment properties.
Capital gains tax - Answer -The sale of capital asset results in either a gain or a loss.
chronological Age - Answer -The actual age of the property in years.
Effective Age - Answer -An appraiser's estimate of the age of the house based upon its ongoing
maintenance and upgrades.
Income Approach - Answer -Will not be used in a typical residential transaction because it applies only to
income-generating rental property.
2|Page
,Physical Deterioration - Answer -Is the loss in a property's value due to daily wear and tear
Functional Obsolescence - Answer -Is the loss in desirability of the style, layout, or function of an element
of a property over time.
External Obsolescence - Answer -The loss in value of a property caused by factors outside the property
itself.
Depreciation - Answer -Is the reduction of value of property from causes of deterioration or
obsolescence.
Market Value - Answer -Is the most probable price a property should bring in a competitive and open
market under all conditions requisite to fair sale, under guidelines published by federal institutions Fannie
Mae and Freddie Mac.
Ad Valorem - Answer -according to value
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, Chain of Title - Answer -A history or list of all recorded owners all the way back to the sovereignty of the
soil.
Abstract of Title - Answer -A complete history of the title of a piece of property that includes deeds,
easements, liens, foreclosure, wills, marriages, deaths, life, estates, fee simple estates, and anything else
that had been recorded about a property.
Recasting - Answer -Or re amortizing, a mortgage. This can reduce the borrower's monthly payment, thus
making resolving a default situation more manageable. (Extending and reducing payments)
Deed in Lieu (DIL) - Answer -Of foreclosure (blank) is a mortgage modification option in which a borrower
voluntarily feeds their collateral property in exchange for a release from all obligations under the
mortgage.
Judicial Foreclosure - Answer -The lender files suit with the (blank) system, and the borrower will receive
a note in the mail demanding payment. If payment is not made after a certain time period, the mortgage
property is then sold through an auction.
Power of Sale - Answer -Also known as a statutory foreclosure. Foreclosure without going to court. (Have
no choice)
4|Page
Answers |2026/2027 Update | A+ Graded
Sub-Prime Loans - Answer -Have risk-based pricing. The rates are not published on these loans.
Borrowers are rated A-F with a prime borrower having an A rating. A minus to F-rated borrowers will pay
1 to 5 % higher than those with good credit. These are non-conforming loans.
prepayment penalties - Answer -More than two-thirds of sub-prime loans have this.
Corporate Bond - Answer -debt instrument issued by a corporation to raise long-term funds
Predatory Lending - Answer -when an unscrupulous lender takes advantage of a consumer's lack of
knowledge regarding lending practices
Property Flipping - Answer -Is an elaborate scam in which unsuspecting first-time homebuyers are sold
houses in serious states of disrepair for prices far above what the houses are actually worth.
Straw Buyer - Answer -Is a person who is used to buy property in order to conceal the actual owner.
1|Page
,Equity Theft - Answer -Occurs when fraudsters forge a deed transfer or a satisfaction lien, and then
obtain new liens on the property.
Churning - Answer -Is excessive selling/lending activity for the purpose of generating fees and
commissions.
Chunking - Answer -occurs when a fraudster promises to show investors how to get rich by buying
investment properties.
Capital gains tax - Answer -The sale of capital asset results in either a gain or a loss.
chronological Age - Answer -The actual age of the property in years.
Effective Age - Answer -An appraiser's estimate of the age of the house based upon its ongoing
maintenance and upgrades.
Income Approach - Answer -Will not be used in a typical residential transaction because it applies only to
income-generating rental property.
2|Page
,Physical Deterioration - Answer -Is the loss in a property's value due to daily wear and tear
Functional Obsolescence - Answer -Is the loss in desirability of the style, layout, or function of an element
of a property over time.
External Obsolescence - Answer -The loss in value of a property caused by factors outside the property
itself.
Depreciation - Answer -Is the reduction of value of property from causes of deterioration or
obsolescence.
Market Value - Answer -Is the most probable price a property should bring in a competitive and open
market under all conditions requisite to fair sale, under guidelines published by federal institutions Fannie
Mae and Freddie Mac.
Ad Valorem - Answer -according to value
3|Page
, Chain of Title - Answer -A history or list of all recorded owners all the way back to the sovereignty of the
soil.
Abstract of Title - Answer -A complete history of the title of a piece of property that includes deeds,
easements, liens, foreclosure, wills, marriages, deaths, life, estates, fee simple estates, and anything else
that had been recorded about a property.
Recasting - Answer -Or re amortizing, a mortgage. This can reduce the borrower's monthly payment, thus
making resolving a default situation more manageable. (Extending and reducing payments)
Deed in Lieu (DIL) - Answer -Of foreclosure (blank) is a mortgage modification option in which a borrower
voluntarily feeds their collateral property in exchange for a release from all obligations under the
mortgage.
Judicial Foreclosure - Answer -The lender files suit with the (blank) system, and the borrower will receive
a note in the mail demanding payment. If payment is not made after a certain time period, the mortgage
property is then sold through an auction.
Power of Sale - Answer -Also known as a statutory foreclosure. Foreclosure without going to court. (Have
no choice)
4|Page
