Champions Real Estate Finance PRACTICE EXAM QUESTIONS WITH CORRECT DETAILED ANSWERS | ALREADY GRADED A+recent version

Champions Real Estate Finance PRACTICE EXAM QUESTIONS WITH CORRECT DETAILED ANSWERS | ALREADY GRADED A+recent version 1. _____ is the consummation of a contractual real estate transaction in which all appropriate documents are signed, and the mortgage loan proceeds are disbursed by the lender. - ANSWER Closing 2. The primary determinants of real estate values are supply and _____. - ANSWER Demand 3. _____ is something of value that can be pledged as security for repayment of a loan. - ANSWER Collateral 4. Servicing includes which of the following activities? - ANSWER Maintaining records of payment 5. The monetary policies of the _____affects interest rates and the availability of funds. - ANSWER Federal Reserve 6. An excess supply of money in the market results in monetary _____. - ANSWER Federal Reserve 7. Which agency insures deposits in banks and thrift institutions for up to $250,000? - ANSWER The Federal Deposit Insurance Corporation 8. The _____ is the interest rate a reserve bank charges eligible financial institutions to borrow funds on a short-term basis. - ANSWER Discount rate 9. Raising taxes and increasing borrowing are two ways at the treasury level to: - ANSWER Raise funds to pay for government spending 10. 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 11. When the costs of production and services increase, causing manufacturing prices to rise, it is called _____. - ANSWER Cost-push inflation 12. Which of the following transactions is exempt from RESPA? - ANSWER Temporary loans 13. Under the _____, the use of certain terms in an advertisement triggers the need for full disclosure of lending terms. - ANSWER Truth in Lending Act 14. The Dodd-Frank Wall Street Reform and Consumer Protection Act established the _____. - ANSWER Consumer Financial Protection Bureau 15. How can Sylvia ensure that Victor is properly licensed as an RMLO? - ANSWER She can look him up in the NMLSR 16. 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 17. Loans originated to adhere to Fannie Mae, Freddie Mac, and Ginnie Mae requirements for purchase are called _____. - ANSWER Conforming loans 18. 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 19. A _____ lender is one who funds mortgage loans from deposits on hand, retaining the loans long term. - ANSWER Portfolio 20. 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 21. The secondary market provides greater _____ to the residential real estate market by providing a steady supply of funds from investors. - ANSWER Liquidity 22. Fannie Mae operates with _____ to enhance the flow of funds through the secondary market to home buyers. - ANSWER Private capital 23. The two largest issuers of Real Estate Mortgage Investment Conduits are _____ and _____. - ANSWER Fannie Mae and Freddie Mac 24. Which of the following statements is INCORRECT? - ANSWER Ginnie Mae sells mortgage-backed securities and purchases mortgage loans. 25. A(n) _____ is a person, corporation, or firm not otherwise in banking that provides its own funds for mortgage financing purposes. - ANSWER Mortgage banker 26. Which act increased the insurance coverage on all federally insured credit union accounts up to $250,000? - ANSWER Dodd-Frank Wall Street Reform Act 27. What type of property might an Equity Estate REIT purchase - ANSWER Office buildings, apartments, self storage 28. A _____ is a debt instrument. - ANSWER Corporate bond 29. The primary market is where _____ go to borrow money. - ANSWER Consumers 30. Which of the following lends money in the primary market? - ANSWER Mortgage companies, commercial banks, credit unions 31. ____ is the least common form of mortgage financing. - ANSWER seller financing 32. ____ were created in the early 1800s because banks did not lend money for residential mortgages. - ANSWER savings and loans 33. An easement for ingress and egress is known as a(n) _____. - ANSWER Encumbrance 34. Which of the following types of liens is one that is freely given, usually as collateral for a loan? - ANSWER Involuntary lien 35. Under a(n) _____, when the final payment is made to the seller, title transfers to the buyer. - ANSWER Special warranty deed 36. Loan Processing - ANSWER The process of collecting information about a borrower in order to build a loan file that will be used to make an underwriting decision 37. Underwriting - ANSWER The process of evaluating a borrower's loan application to determine the risk involved for the lender 38. Funding - ANSWER The process of transferring funds to a title or escrow company for disbursement 39. Servicing - ANSWER Sending monthly payment statements and collecting monthly payments, maintaining payment records and following up on delinquencies 40. Benefits of home ownership: - ANSWER Occupancy, Tax Benefits, Pride of Ownership, Security, Investment 41. Character - ANSWER the willingness of a borrower to make on-time payments 42. Capacity - ANSWER the measure of the borrowers ability to repay the debt 43. Capital - ANSWER the sum of all assets that the borrower has accumulated 44. Collateral - ANSWER something of value that can be pledged as security for repayment of the loan 45. Mortgage Banker - ANSWER entities which provide their own funds for the purpose of providing mortgage financing, as opposed to commercial banks 46. Correspondent Lender - ANSWER Usually smaller in scale than mortgage bankers or brokers, these lenders typically extend loans with their own funds 47. Capital Gains Tax for Married Couple & Filing Jointly - ANSWER 500k & 250k 48. to qualify the property must have been the individuals primary residence for 2 of the previous 5 years 49. Housing and Economic Recovery Act of 2008 - ANSWER Signed by President George Bush to help with the recovery of America's residential housing market 50. When was the Federal Housing Association (FHA) created? - ANSWER 1929 1934 X 1912 2008