CRES Chapter 6 Exam with Complete
Solutions
The type of mortgage loan that uses both real and personal property as security is a:
A. Blanket mortgage
B. Package mortgage
C. Purchase money mortgage
D. Wraparound mortgage - ANS-B. Package mortgage
Under an installment contract, the title to the property is held by the:
A. Vendor
B. Vendee
C. Trustor
D. Trustee - ANS-A. Vendor
Under an installment contract, the title to the property is held by the:
A. Vendor = buyer
B. Vendee = bank
C. Trustor
D. Trustee - ANS-A. Vendor
Under an installment contract, the title to the property is held by the:
A. Vendor = buyer
B. Vendee = bank
C. Trustor
D. Trustee - ANS-A. Vendor
The FHA:
A. Insures loans
B. Makes loans
C. Buy and sells loans
D. All of the above - ANS-A. insures loans
If the amount realized at a sheriff's sale as part of a mortgage foreclosure is more than
the amount of the indebtedness and expenses, then the excess belongs to:
A. The mortgagor
B. The mortgagee
C. The sheriff's office
D. The county - ANS-A. the mortgagor
The purpose of the Real Estate Settlement Procedures Act (RESPA) is to:
, A. See that the buyers do not borrow more money that they can repay
B. Make real estate brokers more responsive to the needs of buyers
C. Help sellers know how much money is required to purchase the property
D. See that the buyers and sellers know all of their settlement costs - ANS-D. See that
the buyers and sellers know all of their settlements costs
A person who assumes an existing mortgage loan is:
A. Not personally liable for the repayment of the debt
B. Not in danger of losing the property by default
C. Personally responsible for paying the principal balance
D. Generally released from liability, but not always - ANS-C. Personally responsible for
paying the principal balance
The interest in a property held by the owner in excess of any liens against it is called:
A. Hypothecation
B. Subordination
C. Leverage
D. Equity - ANS-D. Equity
Fannie Mae, Ginnie Mae, and Freddie Mac have in common the purpose of:
A. Originating residential mortgage loans
B. Purchasing existing mortgage loans
C. Insuring residential mortgage loans
D. Guaranteeing existing mortgage loans - ANS-B. Purchasing existing mortgage loans
A borrower obtained a $7,000 second mortgage loan for five years at 6 percent interest
per annul. Monthly payments were $50. The final payment included the remaining
outstanding principal balance. What type of loan is this?
A. A fully amortized loan
B. A straight loan
C. A partially amortized loan
D. An accelerated loan - ANS-C. A partially amortized loans
The principal distinction between the primary mortgage market and the secondary
mortgage market is in the:
A. Insuring versus the guaranteeing of mortgage loans
B. Origination versus the purchase of mortgage loans
C. Use of mortgages versus the use of deeds of trust
D. Use of discount points versus the use of origination fees - ANS-B. Origination versus
the purchase of mortgage loans
When compared with a 30-year payment period, taking out a loan with a 20-year
payment period would result in all of the following EXCEPT:
A. Faster amortization
B. Higher monthly payments
C. Quicker equity buildup
Solutions
The type of mortgage loan that uses both real and personal property as security is a:
A. Blanket mortgage
B. Package mortgage
C. Purchase money mortgage
D. Wraparound mortgage - ANS-B. Package mortgage
Under an installment contract, the title to the property is held by the:
A. Vendor
B. Vendee
C. Trustor
D. Trustee - ANS-A. Vendor
Under an installment contract, the title to the property is held by the:
A. Vendor = buyer
B. Vendee = bank
C. Trustor
D. Trustee - ANS-A. Vendor
Under an installment contract, the title to the property is held by the:
A. Vendor = buyer
B. Vendee = bank
C. Trustor
D. Trustee - ANS-A. Vendor
The FHA:
A. Insures loans
B. Makes loans
C. Buy and sells loans
D. All of the above - ANS-A. insures loans
If the amount realized at a sheriff's sale as part of a mortgage foreclosure is more than
the amount of the indebtedness and expenses, then the excess belongs to:
A. The mortgagor
B. The mortgagee
C. The sheriff's office
D. The county - ANS-A. the mortgagor
The purpose of the Real Estate Settlement Procedures Act (RESPA) is to:
, A. See that the buyers do not borrow more money that they can repay
B. Make real estate brokers more responsive to the needs of buyers
C. Help sellers know how much money is required to purchase the property
D. See that the buyers and sellers know all of their settlement costs - ANS-D. See that
the buyers and sellers know all of their settlements costs
A person who assumes an existing mortgage loan is:
A. Not personally liable for the repayment of the debt
B. Not in danger of losing the property by default
C. Personally responsible for paying the principal balance
D. Generally released from liability, but not always - ANS-C. Personally responsible for
paying the principal balance
The interest in a property held by the owner in excess of any liens against it is called:
A. Hypothecation
B. Subordination
C. Leverage
D. Equity - ANS-D. Equity
Fannie Mae, Ginnie Mae, and Freddie Mac have in common the purpose of:
A. Originating residential mortgage loans
B. Purchasing existing mortgage loans
C. Insuring residential mortgage loans
D. Guaranteeing existing mortgage loans - ANS-B. Purchasing existing mortgage loans
A borrower obtained a $7,000 second mortgage loan for five years at 6 percent interest
per annul. Monthly payments were $50. The final payment included the remaining
outstanding principal balance. What type of loan is this?
A. A fully amortized loan
B. A straight loan
C. A partially amortized loan
D. An accelerated loan - ANS-C. A partially amortized loans
The principal distinction between the primary mortgage market and the secondary
mortgage market is in the:
A. Insuring versus the guaranteeing of mortgage loans
B. Origination versus the purchase of mortgage loans
C. Use of mortgages versus the use of deeds of trust
D. Use of discount points versus the use of origination fees - ANS-B. Origination versus
the purchase of mortgage loans
When compared with a 30-year payment period, taking out a loan with a 20-year
payment period would result in all of the following EXCEPT:
A. Faster amortization
B. Higher monthly payments
C. Quicker equity buildup
