Real Estate Finance Essentials Exam Study Guide Rated A+

Real Estate Finance Essentials Exam Study Guide Rated A+ Financial leverage is described as using other people's money to acquire something of value. A couple would be able to make a wedding gift to their daughter and her new husband of up to $56,000. Special provisions for agricultural loans may include any of the following EXCEPT follow a rigid payment program. One of the primary duties of the Federal Housing Finance Agency is to regulate Fannie Mae and Freddie Mac. The primary activity that distinguishes a mortgage broker from a mortgage banker is that a mortgage banker will service the loan after settlement. A specific lien differs from a general lien in that it attaches to a single property only. Predatory lending practices include all of the following EXCEPT providing an interest-only loan with final balloon payment. The original maker of a VA loan remains liable when the loan is assumed unless the veteran receives Release of Liability The underwriter may decline an applicant for all of the following reasons EXCEPT the borrower is over 80 years old and unlikely to pay the loan off in the term requested. The impact of a foreclosure on a borrower does NOT include a default judgment. Under the Veterans Home Improvement Program (VHIP), the VLB will lend eligible Texas veterans up to $10,000 on a fixed-rate note to make substantial repairs to an existing primary residence. What is the term of this type of loan? 10 years A borrower obtains a $76,000 mortgage loan at 11½% interest. If the monthly payments of $785 are credited first on interest and then on principal, what will the balance of the principal be after the borrower makes the first payment? $75,943.33 A buyer is purchasing a property with a loan from a mortgage broker, who is charging an origination fee of 1%. If the loan requires a 90% LTV and the purchase price is $200,000, how much is the origination fee? $1,800 Which of these is a basic concept of community property in Texas? All of these. When demand goes up, supply goes down. Open market operations buy and sell Treasuries. Loans created using the underwriting guidelines for Fannie Mae and Freddie Mac are known as conforming loans. Lenders would be required to fund a loan for all of the following EXCEPT a married couple with poor credit using public assistance to qualify. A veteran may regain eligibility at the maximum entitlement if the purchaser is able to provide a Substitution of Entitlement. The secondary market for agricultural loans is Farmer Mac. The main difference in qualifying standards for Freddie Mac from Fannie Mae is that Freddie Mac uses only the total debt-to-income ratio. ECOA includes protection for all of the following protected classes EXCEPT sexual orientation. One of the primary indicators that the real estate market is rebounding is an increase in new home construction starts. Fed open market operations include all of the following EXCEPT buying and selling loans in the open market. A man is purchasing a house using a contract for deed. His contract will include all the following provisions EXCEPT conveyance of title to the purchaser. A carpenter owns a vacant lot and plans to build a home on it to sell. When the carpenter finds a buyer, he will seek a loan from a local bank for the construction costs. This type of loan is called interim financing. All of the following would be associated with corporate bonds EXCEPT zero coupon. A release clause is found in a deed of trust. A married couple has a combined income of $50,000. Using standard Fannie Mae/Freddie Mac guidelines, how much will be allowed for their total debt obligations each month? $1,500 A person's homestead would be subject to a forced sale for all of the following reasons EXCEPT judgment liens. Homebuyers can avoid paying PMI by putting 20% down on a Freddie Mac loan. Financial leverage is when borrowed funds are used to acquire property. The Truth in Lending Act (TILA) requires lenders to disclose payment terms. The difference between mortgage brokers and mortgage bankers is that mortgage brokers bring borrowers and lenders together but do not fund the loan. The newest demographic age group to influence the real estate market is millennials (echo boomers). The FICO credit score range is 300-850. A requirement for the borrower to be approved for a prime loan is for the borrower to have high credit scores and low debt. All of these factors influence an applicant's credit score EXCEPT age and maturity. The MOST commonly used loan for residential home purchases is a 30-year fixed rate. A right or interest in a property held by one who is not the legal owner of the property is known as an encumbrance. The BEST way to describe a real estate mortgage investment conduit (REMIC) is an organized pool of real estate loans that are securitized and sold as mortgage-backed securities (MBSs). All of the following are considered separate property EXCEPT the income earned during marriage from a separate property. FDIC stands for Federal Deposit Insurance Corporation. A teaser rate is typically associated with which type of loan? ARM What type of trust would be used by an investor to earn money from apartments, houses, offices, and shopping centers? REIT Fannie Mae was created for the sole purpose of providing a secondary market for qualified loans. An individual has invested in a real estate trust that will derive income using the net profits from the rental and sale of rental properties. She has invested in a REIT. The Equal Credit Opportunity Act (ECOA) is a consumer protection law that prohibits lenders from discriminating against qualified applicants based on all of the following factors EXCEPT handicap. Short-term Treasury securities are called Treasury bills. A veteran wants to buy a new home using a VA loan. The veteran used her VA guarantee of $46,000 in 1989 on a property she has leased to a family friend. Based on a guarantee of $104,250, she will be able to use her partial eligibility to obtain a VA loan with no money down in the amount of $233,000. Allowing one lien to take or have priority over other liens or debt is known as subordination. A real estate developer is seeking financing. The lender suggests they form a partnership, which will provide better terms for the developer and give the lender an equity position in the development. This type of financing is called participation financing. London Interbank Offered Rate (LIBOR) interest rates are often used on adjustable-rate mortgages to establish an index. For a self-employed borrower, the underwriter must analyze the borrower's tax returns for the past Two years, including a current P&L statement completed by an accountant. The Community Development Block Grant (CDBG) program does all of the following EXCEPT generate additional funds through local bond initiatives. Which of the following circumstances would create a voluntary lien? Mortgage on the property To qualify for an FHA reverse mortgage, one of the homeowners must be at LEAST how old? 62 Which of the following information is on a credit report? Status of the borrower's current credit accounts An equitable redemption period gives the borrower the opportunity to make up the outstanding balance before a foreclosure sale A buyer is putting $30,000 down on the purchase of a $100,000 property. The loan-to-value ratio (LTV) is 70%.