HUD Housing Counselor Module 4.1 & 4.2 Questions and Answers

A potential homebuyer with a minimal savings for a down payment and a low credit score is most likely to qualify for which mortgage? - United States Department of Agriculture (USDA) - Federal Housing Administration (FHA) - Fannie Mae - Freddie Mac - Answer- Federal Housing Administration (FHA) Which is the most significant benefit of using a real estate agent? - Marketing the home online - Obtaining a home inspection - Paying the sales commission - Negotiating the sale - Answer- Negotiating the sale Which statement most accurately describes a member of the home buying team? - A real estate agent or broker is typically an attorney or works for an escrow company. S/he oversees the final transaction in property purchase, at which time the title is transferred from the seller to the buyer - The lender requires an assessment of the home by a home inspector before loan approval - An insurance agent is also known as a settlement agent - A home inspector is generally paid by the buyer - Answer- A home inspector is generally paid by the buyer Which piece of advice would you give to clients as they begin the process of obtaining financing? - Never speak with lenders before setting on a home - Have all potential lenders pull credit within a 30-day window - Mortgages with adjustable rates are always best - Choose whichever lender is most prompt in returning your phone calls - Answer- Have all potential lenders pull credit within a 30-day window All of the following is information necessary for your client to gather in preparation for filing out the URLA, except: - Figures related to income from child support - Figures related to student loans - The year the home was built - Referrals of past landlords - Answer- Referrals of past landlords All of the following statements describe working with an appraiser during the "obtaining financing" step of purchasing a home, except: - It is improper for an appraiser to consider the racial or religious background of a neighborhood's residents to determine the value of a home - Lenders hire appraisers - Home buyers can cancel the offer contract if the contract includes a contingency clause - Home buyers rarely are allowed to see the appraisal information and for that reason are encouraged to get a home inspection - Answer- Home buyers rarely are allowed to see the appraisal information and for that reason are encouraged to get a home inspection A client is shopping for a loan and submits a loan application to a lender with an accepted contract at 123 Maple St. The client asks for information about possible settlement costs, but the lenders says that he needs to see the purchase contract in order to move forward with the process. The lender should have provided which item? - Uniform Residential Loan Application (URLA) - Ability to Pay & Qualified Mortgage Rule (ATR/QM) - Loan Estimate - Closing Disclosure - Answer- Loan Estimate A client spoke with five lenders. Four of the five lenders quoted interest rates between 4.1% and 4.6%. One lender mentioned a 3.1% interest rate if she signed for it within the next 36 hours. She was very interested in this loan, so she asked for more information (conditions and fees). The lender provided some information about the loan, but nothing included the APR. Which regulation deems this practice unlawful? - Equal Credit Opportunity Act (ECOA) - Real Estate Settlement Procedures Act (RESPA) - Truth in Lending Act (TILA) - Home Ownership and Equity Protection Act (HOEPA) - Answer- Truth in Lending Act (TILA) A certain mortgage company encourages all its clients to use a specific appraiser. The appraisers give the mortgage company $100 for every one of its clients who comes to them. if the mortgage company does not tell clients about the payment it receives for referrals, this is a breach of which regulation? - Equal Credit Opportunity Act (ECOA) - Real Estate Settlement Procedures Act (RESPA) - Truth in Lending Act (TILA) - Home Ownership and Equity Protection Act (HOEPA) - Answer- Real Estate Settlement Procedures Act (RESPA) A twenty-eight year old single women was denied a loan. When she asked for the reason, she was told that the lender had given loans to women her age in the past and no longer would. he found that within a few years ,they were not able to make their monthly payments because they had children and stopped working or cut back to part-time work. Which regulation deems this practice unlawful? - Equal Credit Opportunity Act (ECOA) - Real Estate Settlement Procedures Act (RESPA) - Truth in Lending Act (TILA) - Home Ownership and Equity Protection Act (HOEPA) - Answer- Equal Credit Opportunity Act (ECOA) Which type of coverage would a consumer file a claim with when...a family must rent an apartment for one month while their home is being repaired after a windstorm - Personal Liability Coverage - Structural Coverage - Medical Payment Coverage - Loss of Use Coverage - Answer- Loss of Use Coverage Which type of coverage would a consumer file a claim when...A gutter system is destroyed in a hailstorm and must b e repaired. - Personal Liability Coverage - Structural Coverage - Medical Payment Coverage - Loss of Use Coverage - Answer- Structural Coverage Which type of coverage would a consumer file a claim when...A guest gets carbon monoxide poisoning from a home that has a gas leak an no carbon monoxide detector and sues the homeowner - Personal Liability Coverage - Structural Coverage - Medical Payment Coverage - Loss of Use Coverage - Answe