RECA Mortgage broker Study Guide
Exam Questions And Answers.
How are representation relationships typically established? - Answer Estoppel
Representation relationships can be established by:
agreement,
implication,
ratification,
estoppel, or
operation of law
What is the highest form of private land ownership in Alberta? - Answer Fee simple
Fee simple ownership is the highest form of private land ownership as it gives the owner the
most ownership rights, and the owner controls the land as long as property taxes and other
assessments are paid.
Which of the following is NOT part of the criteria to be considered when determining highest
and best use of the property? - Answer Physical impossibility
Explanation
The highest and best use of any property is the use at the time of the valuation, which will likely
produce the highest net return over a given period of time.The four key criteria to be considered
when determining highest and best use are as follows:
Legal permissibility
Physical possibility
Financial feasibility
Maximally productive
Two years ago Peter purchased a fourplex valued at $650,000. Last year the city announced that
it is building a large recreational centre 3 blocks from the fourplex. A real estate agent tell Peter
, The Principle of External Factors states that various external factors can impact the value of a
property, including economic, political, social, and physical issues. The value of Peter's property
has increased due to the convenient location to the new recreation centre.
What is a Power of Attorney? - Answer A written, signed, dated, and witnessed document that
enables an individual to appoint another person to act on his or her behalf with respect to
his/her financial and legal affairs
A Power of Attorney is a written, signed, dated, and witnessed document that enables an
individual to appoint another person to act on his or her behalf with respect to his/her financial
and legal affairs, including debts. It may also include the sale or purchase of real property.
According to the Dower Act, which of the following would be considered disposition of the
property?I. Selling the propertyII. Leasing the propertyIII. Placing a mortgage on the propertyIV.
Getting a line of credit against the property - Answer All of the above
Explanation
Disposition of the property includes:Selling the propertyLeasing the propertyPlacing a mortgage
on the propertyGetting a line of credit against the property
What is the licensee's role in reducing mortgage fraud? - Answer To identify and report any
questionable or suspicious transactions
Explanation
The licensee's role in reducing mortgage fraud is to be aware of how mortgage fraud is
perpetrated, as well as identifying and reporting any questionable or suspicious transactions
that industry professionals may encounter in their day-to-day business practice.
What type of obligations does a mortgage brokerage have when representing either the
borrower or the lender? - Answer General, regulatory, and fiduciary obligations
Explanation
When representing either the borrower or the lender, a mortgage brokerage has general,
regulatory, and fiduciary obligations to the represented party.
Which of the following influence a mortgage professional's decisions? I. Real Estate ActII.
Industry EthicsIII. Personal EthicsIV. Brokerage Ethics - Answer A mortgage professional's
decisions and conduct are influenced by the following:
Exam Questions And Answers.
How are representation relationships typically established? - Answer Estoppel
Representation relationships can be established by:
agreement,
implication,
ratification,
estoppel, or
operation of law
What is the highest form of private land ownership in Alberta? - Answer Fee simple
Fee simple ownership is the highest form of private land ownership as it gives the owner the
most ownership rights, and the owner controls the land as long as property taxes and other
assessments are paid.
Which of the following is NOT part of the criteria to be considered when determining highest
and best use of the property? - Answer Physical impossibility
Explanation
The highest and best use of any property is the use at the time of the valuation, which will likely
produce the highest net return over a given period of time.The four key criteria to be considered
when determining highest and best use are as follows:
Legal permissibility
Physical possibility
Financial feasibility
Maximally productive
Two years ago Peter purchased a fourplex valued at $650,000. Last year the city announced that
it is building a large recreational centre 3 blocks from the fourplex. A real estate agent tell Peter
, The Principle of External Factors states that various external factors can impact the value of a
property, including economic, political, social, and physical issues. The value of Peter's property
has increased due to the convenient location to the new recreation centre.
What is a Power of Attorney? - Answer A written, signed, dated, and witnessed document that
enables an individual to appoint another person to act on his or her behalf with respect to
his/her financial and legal affairs
A Power of Attorney is a written, signed, dated, and witnessed document that enables an
individual to appoint another person to act on his or her behalf with respect to his/her financial
and legal affairs, including debts. It may also include the sale or purchase of real property.
According to the Dower Act, which of the following would be considered disposition of the
property?I. Selling the propertyII. Leasing the propertyIII. Placing a mortgage on the propertyIV.
Getting a line of credit against the property - Answer All of the above
Explanation
Disposition of the property includes:Selling the propertyLeasing the propertyPlacing a mortgage
on the propertyGetting a line of credit against the property
What is the licensee's role in reducing mortgage fraud? - Answer To identify and report any
questionable or suspicious transactions
Explanation
The licensee's role in reducing mortgage fraud is to be aware of how mortgage fraud is
perpetrated, as well as identifying and reporting any questionable or suspicious transactions
that industry professionals may encounter in their day-to-day business practice.
What type of obligations does a mortgage brokerage have when representing either the
borrower or the lender? - Answer General, regulatory, and fiduciary obligations
Explanation
When representing either the borrower or the lender, a mortgage brokerage has general,
regulatory, and fiduciary obligations to the represented party.
Which of the following influence a mortgage professional's decisions? I. Real Estate ActII.
Industry EthicsIII. Personal EthicsIV. Brokerage Ethics - Answer A mortgage professional's
decisions and conduct are influenced by the following:
