The CE Shop MLO Final Exam 1

©THEBRIGHT EXAM STUDY SOLUTIONS 8/26/2024 11:32 AM The CE Shop MLO Final Exam 1 Severance - answerWhich term describes the process of real property becoming personal property by detaching it from the land? FNMA, GNMA, FHLMC, and lending institutions that buy loans from other lenders - answerThe secondary mortgage market is comprised of _________________________. Discrimination through blockbusting, steering, and redlining The Fair Housing Act in 1968 was the first step in reversing the process of blockbusting, steering and redlining—all of which are banned as part of the act. - answerWhat practice did the Fair Housing Act of 1968 attempt to eliminate? Option agreements usually don't include a termination date. Because option agreements leave a seller hanging without the opportunity to sell the property to anyone else, they usually have a defined ending date. - answerA lease with option to buy is a good home buying solution for some buyers. Which of these statements about a lease with option to buy is FALSE? 2,000 - answerA contract shows that a fee is "$200" in one location and "two thousand" in another. What should one presume the correct fee to be? Suing for specific performance - answerArchie signed a contract to buy Pam's home. The deal eventually closed, but Pam failed to hand over the home's keys to Archie. A week passed, and Archie filed a lawsuit in an attempt to force Pam to give him the keys. This is an example of ______. Independent contractor - answerPam is a new real estate licensee who must receive a high level of supervision. Even with the supervisory requirement, the Internal Revenue Service allows Pam to be classified as an ______. The formula to calculate the annual gross income is as follows: AGI = Property Value × Annual Cap Rate = $400,000 × 8% = $32,000 net operating income - answerYou have a client who ©THEBRIGHT EXAM STUDY SOLUTIONS 8/26/2024 11:32 AM has an investment property valued at $400,000. Annual cap rates are 8%. What can your client expect in net operating income? He must remind the sellers to disclose the possible presence of lead-based paint to a buyer if the home was built prior to 1978. - answerJamal is a real estate licensee. What's his responsibility regarding household lead hazards? Implied agency - answerWhat type of agency exists because of the actions and behavior of the parties? Avulsion - answerA late spring snow melt caused a river to swell past its bank. The flooding led to many landowners losing portions of their properties. What is the process called that caused this land loss? Federal Trade Commission Act (1914) - answerWhich act encourages fair, truthful, non- deceptive, and evidence-supported claims in advertising? Sadie - answerEllen and Sadie signed an agreement to list Sadie's condo for sale. After the contract was signed, Sadie's father, Grant, offered to pay Ellen's commission as a housewarming present. Sadie's Mom and stepdad, Linda and Rick also chipped in. Who is Ellen's client? Assessed value - answerWhich of the following is a percentage of market value, and is also the amount of property value to which the tax rate is applied? Investment Value - answerInvestors are generally interested in a property's _________________. To paint a true picture of a property's condition - answerWhat's the purpose of a home inspection? Survey Surveys determine property boundaries and determine whether there are encroachments on the property. - answerWhat is typically used to prove there are no encroachments on the property? FHEO (Fair Housing and Equal Opportunity) - answerWhich agency enforces federal fair housing laws? No commission is earned if the seller locates the buyer with exclusive agency. - answerWhat's the difference between an exclusive right-to-sell and an exclusive agency agreement? "You might consider a 1031 tax-deferred exchange." ©THEBRIGHT EXAM STUDY SOLUTIONS 8/26/2024 11:32 AM IRC Section 1031 provides an exception and allows you to postpone paying tax on the gain if you reinvest the proceeds in similar property as part of a qualifying like-kind exchange. - answerYour client, Bruno, is an investor. He is in the process of selling a fourplex and mentions to you that he hates the idea of the capital gains tax he'll be subject to. What should you tell him? The Michigan Department of Environmental Quality - answerIn Michigan, which entity makes the final determination of whether or not an area is a wetland? Built-In - answerWhich of the following terms best describes an item that is both a fixture and real property? Fee Simple - answerThe Emery family, along with 20 other families, purchased a timeshare estate that will enable them to share a condominium in a resort community. A timeshare estate involves a ______ type of ownership. Define the results he wants Bart to achieve, but not direct how Bart does his work - answerBart is an independent contractor. Which of these does his managing broker have the right to do? the information is known from other sources. - answerThe duty of confidentiality survives agency unless the former client is found guilty of fraud or ______. Her loan is 90% of the value of the real estate used as collateral and she is putting 10% down. - answerJillian has a loan-to-value ratio of 90/100. This means __________. Crystal, because she recorded first - answerJames purchased a property from Kip on October 1. He had his deed recorded on April 15 of the following year. Crystal purchased the same property from Kip on April 1, and had her deed recorded on April 10. Who can most easily prove legal ownership of the property? An opinion regarding the listing price - answerWhich of the following opinions can a real estate licensee provide? They send two different applicants whose only difference is status within a protected class, and test whether the applicants are treated differently. - answerHow do discrimination testers work? Junk Fax Prevention Act of 2005 - answerThe ______ makes it illegal to send unsolicited commercial solicitations via fax without the recipient's permission or an established relationship. ©THEBRIGHT EXAM STUDY SOLUTIONS 8/26/2024 11:32 AM Three of the most common systems for providing legal descriptions are metes and bounds, lot and block, and rectangular government survey. - answerWhat are the three most common forms of legal descriptions? An agreement or promise made between the partie