CHAMPIONS SCHOOL OF REAL ESTATE – REAL ESTATE FINANCE 1 EXAM 60 QUESTIONS WITH COMPLETE SOLUTIONS 2025 (VERIFIED ANSWERS) A+ RATED.

CHAMPIONS SCHOOL OF REAL ESTATE – REAL ESTATE FINANCE 1 EXAM 60 QUESTIONS WITH COMPLETE SOLUTIONS 2025 (VERIFIED ANSWERS) A+ RATED. The monetary policies of the _____affects interest rates and the availability of funds. - ANSWER -Federal Reserve An excess supply of money in the market results in monetary _____. - ANSWER - Inflation Which agency insures deposits in banks and thrift institutions for up to $250,000? - ANSWER -The Federal Deposit Insurance Corporation The _____ is the interest rate a reserve bank charges eligible financial institutions to borrow funds on a short-term basis. - ANSWER -Discount rate Raising taxes and increasing borrowing are two ways at the treasury level to: - ANSWER -Raise funds to pay for government spending The Fed uses three primary monetary policy tools to influence the cost and availability of credit: open market operations, the discount rate, and _____. - ANSWER -Reserve requirements When the costs of production and services increase, causing manufacturing prices to rise, it is called _____. - ANSWER -Cost-push inflation Which of the following transactions is exempt from RESPA? - ANSWER -Temporary loans Under the _____, the use of certain terms in an advertisement triggers the need for full disclosure of lending terms. - ANSWER -Truth in Lending Act The Dodd-Frank Wall Street Reform and Consumer Protection Act established the _____. - ANSWER -Consumer Financial Protection Bureau How can Sylvia ensure that Victor is properly licensed as an RMLO? - ANSWER -She can look him up in the NMLSR The secondary mortgage market was designed to provide greater liquidity to the residential real estate market, primarily by _____. - ANSWER -The sale of mortgage loans as investments Loans originated to adhere to Fannie Mae, Freddie Mac, and Ginnie Mae requirements for purchase are called _____. - ANSWER -Conforming loans Which of the following housing objectives does Fannie Mae address? - ANSWER - Regional imbalances of available mortgage credit, The origination of mortgages for sale, The standardization of mortgage loans A _____ lender is one who funds mortgage loans from deposits on hand, retaining the loans long term. - ANSWER -Portfolio is a government-sponsored enterprise with the mission of providing a secondary market for agricultural real estate mortgage loans, rural housing mortgage loans, and rural utility cooperative loans. - ANSWER -Farmer Mac The secondary market provides greater _____ to the residential real estate market by providing a steady supply of funds from investors. - ANSWER -Liquidity Fannie Mae operates with _____ to enhance the flow of funds through the secondary market to home buyers. - ANSWER -Private capital The two largest issuers of Real Estate Mortgage Investment Conduits are _____ and _____. - ANSWER -Fannie Mae and Freddie Mac Which of the following statements is INCORRECT? - ANSWER -Ginnie Mae sells mortgage-backed securities and purchases mortgage loans. - ANSWER - A(n) _____ is a person, corporation, or firm not otherwise in banking that provides its own funds for mortgage financing purposes. - ANSWER -Mortgage banker Which act increased the insurance coverage on all federally insured credit union accounts up to $250,000? - ANSWER -Dodd-Frank Wall Street Reform Act What type of property might an Equity Estate REIT purchase - ANSWER -Office buildings, apartments, self storage A _____ is a debt instrument. - ANSWER -Corporate bond The primary market is where _____ go to borrow money. - ANSWER -Consumers Which of the following lends money in the primary market? - ANSWER -Mortgage companies, commercial banks, credit unions ____ is the least common form of mortgage financing. - ANSWER -seller financing ____ were created in the early 1800s because banks did not lend money for residential mortgages. - ANSWER -savings and loans An easement for ingress and egress is known as a(n) _____. - ANSWER - Encumbrance Which of the following types of liens is one that is freely given, usually as collateral for a loan? - ANSWER -Involuntary lien Under a(n) _____, when the final payment is made to the seller, title transfers to the buyer. - ANSWER -Special warranty deed A deed of trust is a(n) _____ instrument. - ANSWER -Three-party The lender may also be referred to as the _____ in some deed of trust forms. - ANSWER -Mortgagee The type of clause that allows a new borrower to take over payments on an existing loan is a(n) _____ clause. - ANSWER -Assumption A(n) _____ clause states that the lien is defeated when the debt is repaid. - ANSWER - Defeasance Prepayment penalties can be found in more than two-thirds of _____. - ANSWER -Subprime mortgages A condition of a mortgage loan which prohibits prepayment of the loan prior to a certain date is known as a(n) _____ clause. - ANSWER -Lock-in The basic formula for interim interest is _____. - ANSWER -Interest x Payment Rate / 365 x # of days until the end of the month Semi-annual interest is calculated _____. - ANSWER -Twice per year Ailene and Arnold are on a fixed income. They want to buy a home and are researching different loan options. Which type of loan would be a poor choice for the - ANSWER -An adjustable-rate mortgage What would the interest rate be on a $155,000 loan if the annual interest owed is $5,425? (Use a 365-day year.) - ANSWER -3.50% An FHA borrower can use gift funds from a(n) _____ as funds for a downpayment. - ANSWER -a parent Which loan program would allow Edmund to purchase a home with a downpayment of $0? - ANSWER -A VA loan