REE 3043 EXAM 3 QUESTIONS AND
ANSWERS 100% PASS 2026 EDITION
Chapter 10:
The most compelling alternative home mortgage that lenders use to combat the maturity
imbalance problem associated with long-term LPMs is by making _____________ loans.
A) ARM
B) RAM
C) PMI
D) PMM - ANS A) ARM Loans
FHA loans require that MIP payments be made
A) until the loan-to-original value reaches 78 percent.
B) for at least 5 years.
C) either a or b
D) both a and b - ANS D) both a and b
Gina is purchasing her first home and would like to include the cost of furnishing her home in
the mortgage loan. The type of mortgage that would accommodate this is
A) an option mortgage.
B) a wrap-around mortgage.
C) a package mortgage.
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@2026 EDITION ALLRIGHTS RESERVED
, D) a jumbo loan. - ANS C) a package mortgage.
A potential drawback to a reverse mortgage is the homeowner outliving the payout period of
the mortgage. This type of uncertainty associated with RAMs is known as
A) payback risk.
B) mortality risk.
C) longevity risk.
D) holding cost risk. - ANS B) mortality risk.
Which is NOT a characteristic of an interest-only balloon mortgage?
A) open-end credit line
B) lower monthly payments
C) they are useful for short-term financing
D) they are non-amortizing - ANS A) open-end credit line
The FHA does NOT engage in which activity?
A) provide insurance for reverse mortgages
B) provide an opportunity for qualified first-time home buyers to obtain an affordable home
loan
C) provide affordable small business loans to qualified borrowers
D) a and c only - ANS C) provide affordable small business loans to qualified borrowers
All are characteristics of VA loans except
A) the VA guarantees loans made by private lenders to qualified veteran borrowers.
B) the VA can make direct home loans to veteran borrowers.
C) the VA protects the lender against default by providing an assurance of up to 75% of the loan
amount.
D) eligible veterans are not required to make a down payment on VA loans. - ANS C) the VA
protects the lender against default by providing an assurance of up to 75% of the loan amount.
2
@2026 EDITION ALLRIGHTS RESERVED
ANSWERS 100% PASS 2026 EDITION
Chapter 10:
The most compelling alternative home mortgage that lenders use to combat the maturity
imbalance problem associated with long-term LPMs is by making _____________ loans.
A) ARM
B) RAM
C) PMI
D) PMM - ANS A) ARM Loans
FHA loans require that MIP payments be made
A) until the loan-to-original value reaches 78 percent.
B) for at least 5 years.
C) either a or b
D) both a and b - ANS D) both a and b
Gina is purchasing her first home and would like to include the cost of furnishing her home in
the mortgage loan. The type of mortgage that would accommodate this is
A) an option mortgage.
B) a wrap-around mortgage.
C) a package mortgage.
1
@2026 EDITION ALLRIGHTS RESERVED
, D) a jumbo loan. - ANS C) a package mortgage.
A potential drawback to a reverse mortgage is the homeowner outliving the payout period of
the mortgage. This type of uncertainty associated with RAMs is known as
A) payback risk.
B) mortality risk.
C) longevity risk.
D) holding cost risk. - ANS B) mortality risk.
Which is NOT a characteristic of an interest-only balloon mortgage?
A) open-end credit line
B) lower monthly payments
C) they are useful for short-term financing
D) they are non-amortizing - ANS A) open-end credit line
The FHA does NOT engage in which activity?
A) provide insurance for reverse mortgages
B) provide an opportunity for qualified first-time home buyers to obtain an affordable home
loan
C) provide affordable small business loans to qualified borrowers
D) a and c only - ANS C) provide affordable small business loans to qualified borrowers
All are characteristics of VA loans except
A) the VA guarantees loans made by private lenders to qualified veteran borrowers.
B) the VA can make direct home loans to veteran borrowers.
C) the VA protects the lender against default by providing an assurance of up to 75% of the loan
amount.
D) eligible veterans are not required to make a down payment on VA loans. - ANS C) the VA
protects the lender against default by providing an assurance of up to 75% of the loan amount.
2
@2026 EDITION ALLRIGHTS RESERVED
