NYREI UPDATED FINAL EXAM QUESTIONS
AND ANSWERS SURE A+
✔✔What fiduciary duties does a property manager owe the property owner? - ✔✔The
same as a real estate agent(A property manager owes the property owner the same
fiduciary duties a real estate agent would owe his principal. Those fiduciary duties
include obedience, loyalty, disclosure, confidentiality, accountability, and reasonable
care.)
✔✔John is gathering up his paperwork to complete his income taxes. His home
expenses include: Mortgage interest / month = $520; Property taxes = $3,280; New
deck = $5,300. What is the total deduction John can take for the year? -
✔✔$9,520(John can deduct the entire interest paid on his mortgage. At $520 each
month, he paid $6,240 in interest for the year. Add to that the property taxes that he
paid, and John determines that he can deduct $9,520 on his income tax returns. The
new deck is not deductible.)
✔✔Which of the following is NOT a protected class under the 1968 federal Fair Housing
Act? - ✔✔Age(While race, religion, color, sex, national origin, handicap, and family
status are all protected classes under the Civil Rights Act Amendment of 1968; age is
not a protected class.)
✔✔Sarah Jones has two small children under the age of 18. Under federal law, she
may be denied rental or purchase in any building where occupancy is reserved
exclusively for those aged at least - ✔✔62 (Housing developments intended for older
persons my exclude children if such buildings are occupied solely by persons 62 and
older, or if 80 percent of the units are occupied by at least one person 55 or older and
there are published policies and procedures demonstrating intent to provide housing for
persons 55 or older)
✔✔Which list of items is tax deductible for a primary residence? - ✔✔mortgage interest,
property taxes, in-home office(Any maintenance expenses, such as a new roof, are not
deductible on a primary residence. Mortgage interest, property taxes, interest on a
,home equity loan, casualty losses, and in-home office are deductible on a first and
second home.)
✔✔Who does not own real property? - ✔✔Lori, who has a unit in a cooperative(A
cooperative sells shares in the co-op, which are personal property.)
✔✔According to the secondary market for FHA loans, how much of the borrower's
income can be housing expense? - ✔✔29%(Compared to conventional loan standards
of 28%, FHA loans allow more of the borrower's income to be housing expense (29%).
Housing expense is known as the principal, interest, taxes and insurance (PITI), which
is the mortgage payment.)
✔✔A buyer with badly damaged credit would be most likely to use - ✔✔nonconforming
mortgages.(FHA will consider some credit flaws, with acceptable explanations for the
credit problem. VA will also consider some credit flaws, with acceptable explanations for
the credit problem. Conventional loan guidelines require a good credit rating.
Nonconforming loans are usually reviewed on an individual basis and will adjust the
interest rate, according to creditworthiness.)
✔✔Which of the following is NOT part of the secondary market? - ✔✔Federal Universal
Mortgage Association
✔✔Fiscal policy refers to - ✔✔the way the government determines spending and
taxation levels in the US. The president and the US congress are both involved in
setting the fiscal policy because they are responsible for determining federal budget
federal budged figures and federal tax legislation.
✔✔Monetary policy refers to - ✔✔how the Federal Reserve (FED) manages the supply
of money. The policies determined by the Fed have direct impact of money and interest
rates. The federal reserve also oversees the Truth in lending act.
✔✔Which of the following government influences would tend to encourage lending? -
✔✔Lowering reserve requirements (By decreasing the reserve requirements and
making more money available, the federal reserve can encourage lending)
✔✔Primary Mortgage Market - ✔✔When a lender loans money to a borrower and the
borrower gives the lender a mortgage.
✔✔Secondary Mortgage Market - ✔✔When lenders sell the mortgage to an investor to
receive funds so that they make additional mortgage loans to others.
✔✔Which type of lender functions as the originator and the servicer of loans on behalf
of large investors such as insurance companies, pensions plans, or the Federal
National Mortgage Association? - ✔✔Mortgage Companies( Mortgage companies
,functions as the originator and servicer of loans on behalf of large investors such as
insurance companies, pension plans, and Federal National Mortgage Association
(Fannie Mae))
✔✔When lenders sell mortgages to investors in order to receive funds in order to make
additional mortgage loans to others, this is knows as - ✔✔Secondary Mortgage Market
(The secondary mortgage market refers to lenders selling off mortgages to investors to
receive funds in order to make additional mortgage loans to others. This is an example
of loan assignment or assignment of loans)
✔✔Secondary Mortgage Markets can make local real estate markets more stable by: -
✔✔Moderating the effect of local real estate cycles
✔✔Fannie Mae - ✔✔Was created in 1938. Is the nations largest investor in residential
mortgages. Fannie Mae is able to purchase conventional mortgages as well as FHA(
Federal Housing Administration) and VA (Veteran's Administration) mortgages.
✔✔Ginnie Mae - ✔✔Was created in 1968 and operates under department of housing
and urban development. A primary function of Ginnie Mae is to promote investment by
guaranteeing the payment of principal and interest on FHA and VA mortgages through
its mortgage backed securities system. Mortgage Backed securities fall in two general
types.
Bond type Securities- are long term, pay interest annually, and provide repayment at a
specific date
pass through securities-Which are more common, pay interest and principal payments
on a monthly basis. Some types pay even if payments aren't collected from the
mortgager.
✔✔Freddie mac - ✔✔was created in 1970 as a nonprofit, federally chartered institution
controlled by Federal Home Loan Bank System. Freddie Mac does not guarantee
payments of its mortgages. The primary function of Freddie Mac was to help savings
and loans acquire additional funds for lending in the mortgage market by purchasing
mortgages they already held.
✔✔An example of a servicing activity for which a servicing fee may be charged is -
✔✔Collecting monthly mortgage payments.
✔✔The main reason that loans are sold and bought on the secondary market is - ✔✔To
maximize the return on investment dollars
✔✔New York State law requires the cancellation of private mortgage insurance when
the borrowers equity in the property reaches - ✔✔25% (When a borrower has 25%
equity in his home, the lender must quit charging private mortgage insurance.
, ✔✔One main advantage of wraparound financing is - ✔✔The buyer pays a lower
interest rate
✔✔Land Contract - ✔✔A real estate installment agreement where the buyer (Vendee)
makes payments to the sellor (vendor) in exchange for the right to occupy, use, and
enjoy the land, but no deed or title transfers until all, or a specified portion of payments
have been made.
✔✔Loan Assignment - ✔✔When the lender sells a mortgage loan to the secondary
mortgage market
✔✔Loan Assumption - ✔✔The new buyer takes over the sellers existing mortgage loans
✔✔An option - ✔✔requires the optionor to complete the purchase, is the optionee elects
to act (A listing agreement will commit a seller to commission. Easement is the right to
use another property for a specific use. An offer is a proposal while an option is a
contract)
✔✔What is the basic purpose of points? - ✔✔To increase the lenders yield
✔✔The type of note or loan that requires payments of interests only during the term of
the note, with a balloon payment at the end of the loan term to pay off the principal
amount it - ✔✔Straight loan (A straight loan requires payments of interest only during
the term of the note, with a balloon payment at the end of the loan term to pay off the
principal amount.)
✔✔What type of mortgage has payments set up to include principal and interest on the
loan plus one-twelfths of the years property taxes and hazard insurance premiums? -
✔✔Budget Mortgage (A budget mortgage has a fully amortized monthly payments set
up to include principal, interest taxes, and insurance on the loan, which is referred to as
PITI.)
✔✔A lender will require a borrower deposit at the initial lender meeting to: - ✔✔Cover
the costs of credit report, property appraisal, and title report.
✔✔A bridge mortgage is described as - ✔✔A mortgage that occurs between the
termination of one mortgage and the beginning of the next
✔✔With what type of mortgage does the lender make regular monthly payments to the
borrower, based on the equity the homeowner has invested in the property? -
✔✔Reverse equity mortgage (With a reverse equity mortgagee, a qualified person, who
is 62 or older can mortgage his or her home to a lender in return, et a monthly check
form the lender.)
AND ANSWERS SURE A+
✔✔What fiduciary duties does a property manager owe the property owner? - ✔✔The
same as a real estate agent(A property manager owes the property owner the same
fiduciary duties a real estate agent would owe his principal. Those fiduciary duties
include obedience, loyalty, disclosure, confidentiality, accountability, and reasonable
care.)
✔✔John is gathering up his paperwork to complete his income taxes. His home
expenses include: Mortgage interest / month = $520; Property taxes = $3,280; New
deck = $5,300. What is the total deduction John can take for the year? -
✔✔$9,520(John can deduct the entire interest paid on his mortgage. At $520 each
month, he paid $6,240 in interest for the year. Add to that the property taxes that he
paid, and John determines that he can deduct $9,520 on his income tax returns. The
new deck is not deductible.)
✔✔Which of the following is NOT a protected class under the 1968 federal Fair Housing
Act? - ✔✔Age(While race, religion, color, sex, national origin, handicap, and family
status are all protected classes under the Civil Rights Act Amendment of 1968; age is
not a protected class.)
✔✔Sarah Jones has two small children under the age of 18. Under federal law, she
may be denied rental or purchase in any building where occupancy is reserved
exclusively for those aged at least - ✔✔62 (Housing developments intended for older
persons my exclude children if such buildings are occupied solely by persons 62 and
older, or if 80 percent of the units are occupied by at least one person 55 or older and
there are published policies and procedures demonstrating intent to provide housing for
persons 55 or older)
✔✔Which list of items is tax deductible for a primary residence? - ✔✔mortgage interest,
property taxes, in-home office(Any maintenance expenses, such as a new roof, are not
deductible on a primary residence. Mortgage interest, property taxes, interest on a
,home equity loan, casualty losses, and in-home office are deductible on a first and
second home.)
✔✔Who does not own real property? - ✔✔Lori, who has a unit in a cooperative(A
cooperative sells shares in the co-op, which are personal property.)
✔✔According to the secondary market for FHA loans, how much of the borrower's
income can be housing expense? - ✔✔29%(Compared to conventional loan standards
of 28%, FHA loans allow more of the borrower's income to be housing expense (29%).
Housing expense is known as the principal, interest, taxes and insurance (PITI), which
is the mortgage payment.)
✔✔A buyer with badly damaged credit would be most likely to use - ✔✔nonconforming
mortgages.(FHA will consider some credit flaws, with acceptable explanations for the
credit problem. VA will also consider some credit flaws, with acceptable explanations for
the credit problem. Conventional loan guidelines require a good credit rating.
Nonconforming loans are usually reviewed on an individual basis and will adjust the
interest rate, according to creditworthiness.)
✔✔Which of the following is NOT part of the secondary market? - ✔✔Federal Universal
Mortgage Association
✔✔Fiscal policy refers to - ✔✔the way the government determines spending and
taxation levels in the US. The president and the US congress are both involved in
setting the fiscal policy because they are responsible for determining federal budget
federal budged figures and federal tax legislation.
✔✔Monetary policy refers to - ✔✔how the Federal Reserve (FED) manages the supply
of money. The policies determined by the Fed have direct impact of money and interest
rates. The federal reserve also oversees the Truth in lending act.
✔✔Which of the following government influences would tend to encourage lending? -
✔✔Lowering reserve requirements (By decreasing the reserve requirements and
making more money available, the federal reserve can encourage lending)
✔✔Primary Mortgage Market - ✔✔When a lender loans money to a borrower and the
borrower gives the lender a mortgage.
✔✔Secondary Mortgage Market - ✔✔When lenders sell the mortgage to an investor to
receive funds so that they make additional mortgage loans to others.
✔✔Which type of lender functions as the originator and the servicer of loans on behalf
of large investors such as insurance companies, pensions plans, or the Federal
National Mortgage Association? - ✔✔Mortgage Companies( Mortgage companies
,functions as the originator and servicer of loans on behalf of large investors such as
insurance companies, pension plans, and Federal National Mortgage Association
(Fannie Mae))
✔✔When lenders sell mortgages to investors in order to receive funds in order to make
additional mortgage loans to others, this is knows as - ✔✔Secondary Mortgage Market
(The secondary mortgage market refers to lenders selling off mortgages to investors to
receive funds in order to make additional mortgage loans to others. This is an example
of loan assignment or assignment of loans)
✔✔Secondary Mortgage Markets can make local real estate markets more stable by: -
✔✔Moderating the effect of local real estate cycles
✔✔Fannie Mae - ✔✔Was created in 1938. Is the nations largest investor in residential
mortgages. Fannie Mae is able to purchase conventional mortgages as well as FHA(
Federal Housing Administration) and VA (Veteran's Administration) mortgages.
✔✔Ginnie Mae - ✔✔Was created in 1968 and operates under department of housing
and urban development. A primary function of Ginnie Mae is to promote investment by
guaranteeing the payment of principal and interest on FHA and VA mortgages through
its mortgage backed securities system. Mortgage Backed securities fall in two general
types.
Bond type Securities- are long term, pay interest annually, and provide repayment at a
specific date
pass through securities-Which are more common, pay interest and principal payments
on a monthly basis. Some types pay even if payments aren't collected from the
mortgager.
✔✔Freddie mac - ✔✔was created in 1970 as a nonprofit, federally chartered institution
controlled by Federal Home Loan Bank System. Freddie Mac does not guarantee
payments of its mortgages. The primary function of Freddie Mac was to help savings
and loans acquire additional funds for lending in the mortgage market by purchasing
mortgages they already held.
✔✔An example of a servicing activity for which a servicing fee may be charged is -
✔✔Collecting monthly mortgage payments.
✔✔The main reason that loans are sold and bought on the secondary market is - ✔✔To
maximize the return on investment dollars
✔✔New York State law requires the cancellation of private mortgage insurance when
the borrowers equity in the property reaches - ✔✔25% (When a borrower has 25%
equity in his home, the lender must quit charging private mortgage insurance.
, ✔✔One main advantage of wraparound financing is - ✔✔The buyer pays a lower
interest rate
✔✔Land Contract - ✔✔A real estate installment agreement where the buyer (Vendee)
makes payments to the sellor (vendor) in exchange for the right to occupy, use, and
enjoy the land, but no deed or title transfers until all, or a specified portion of payments
have been made.
✔✔Loan Assignment - ✔✔When the lender sells a mortgage loan to the secondary
mortgage market
✔✔Loan Assumption - ✔✔The new buyer takes over the sellers existing mortgage loans
✔✔An option - ✔✔requires the optionor to complete the purchase, is the optionee elects
to act (A listing agreement will commit a seller to commission. Easement is the right to
use another property for a specific use. An offer is a proposal while an option is a
contract)
✔✔What is the basic purpose of points? - ✔✔To increase the lenders yield
✔✔The type of note or loan that requires payments of interests only during the term of
the note, with a balloon payment at the end of the loan term to pay off the principal
amount it - ✔✔Straight loan (A straight loan requires payments of interest only during
the term of the note, with a balloon payment at the end of the loan term to pay off the
principal amount.)
✔✔What type of mortgage has payments set up to include principal and interest on the
loan plus one-twelfths of the years property taxes and hazard insurance premiums? -
✔✔Budget Mortgage (A budget mortgage has a fully amortized monthly payments set
up to include principal, interest taxes, and insurance on the loan, which is referred to as
PITI.)
✔✔A lender will require a borrower deposit at the initial lender meeting to: - ✔✔Cover
the costs of credit report, property appraisal, and title report.
✔✔A bridge mortgage is described as - ✔✔A mortgage that occurs between the
termination of one mortgage and the beginning of the next
✔✔With what type of mortgage does the lender make regular monthly payments to the
borrower, based on the equity the homeowner has invested in the property? -
✔✔Reverse equity mortgage (With a reverse equity mortgagee, a qualified person, who
is 62 or older can mortgage his or her home to a lender in return, et a monthly check
form the lender.)
