CALIFORNIA REAL ESTATE FINANCE FINAL EXAM ACTUAL
QUESTIONS AND ANSWERS
The sequence of the five-step financing process is generally
Funding/Closing, Servicing - CORRECT ANSWER✅✅Application, Analysis/Processing,
Qualifying/Underwriting, Funding/Closing, Servicing
The Federal Reserve System consists of __ reserve districts, and __ board members. - CORRECT
ANSWER✅✅12/7
interest-bearing savings accounts represent - CORRECT ANSWER✅✅time deposits
another name for a "take-out" loan is; - CORRECT ANSWER✅✅permanent financing or long-term
the financial turmoil in the mid 2000's was NOT fueled by
a. years of greed throughout the finance system
b. relaxation of loan qualifying requirements
c. a reliance on ever-increasing home values
d. the creation of more stringent loan qualifying requirements - CORRECT ANSWER✅✅D
which of the following characterizes lending policies of life insurance companies;
a. preference for very large projects
b. short payback terms
c. high discount points and fee structure
d. construction loans preferred over take-out loans - CORRECT ANSWER✅✅A - Preference for very large
projects
Disintermediation is best described as - CORRECT ANSWER✅✅a sudden flow of funds from thrift
institutions into the general money
,the principal purpse of the Depository Institutions and Monetary Control Act was to; - CORRECT
ANSWER✅✅phase out restrictions on interest rates that lenders may pay depositors
The agency responsible for chartering and overseeing the operations of national banks and bank holding
companies is the; - CORRECT ANSWER✅✅OCC- office of the comptroller
The trade association that consists of the major investors and lenders in the mortgage banking fields is
the; - CORRECT ANSWER✅✅Mortgage Bankers Association
Unlike institutional lenders, private lenders;
a. are highly regulated
b. are subject to California's usury statutes
c. apply uniform lending policies and practices
d. make only second trust deed loans - CORRECT ANSWER✅✅B
a purchase money loan is best illustrated by; - CORRECT ANSWER✅✅seller carrying back a first trust
deed.
Lending characteristics of private lenders include;
a. high degree of sophistication in loan decisions b. making primarily first trust deed loans c. charging
relatively low interest rates
d. short-term repayment schedules - CORRECT ANSWER✅✅D
an association of two or more parties who combine their financial resources for achieving specific
investment objectives is best illustrated by a ;
a. real estate investment trust
b. syndication
c. general partnership
d. limited partnership - CORRECT ANSWER✅✅B
, All of the following statements regarding the discount rate are true except;
a. the higher the discount rate charged the higher the interest rate charged to the borrower
b. the discount rate is the charge for overnight borrowing from the Fed.
c. any change in the discount rate immediately affects long term mortgage rated
d. the lower the discount rate the greater likehood is of lower borrowing rated by consumers - CORRECT
ANSWER✅✅C
which of the following receive their capital primarily from gifts, and are a good source for sale-leaseback
financing
a. state-chartered credit unions
b.labor unions
c. endowment funds
d. estate funds - CORRECT ANSWER✅✅C
alternative mortgage instruments (AIMs) are financing vehicles that
a. are universally standardized
b. offer an alternative to fixed-rate instruments
c. call for level payments throughout the life of the loan
d. call for 30-year repayment schedules - CORRECT ANSWER✅✅B
The principal objective of AMIs is to;
a. transfer the risk of rising interest rates from borrower to lender
b. transfer the risk of rising interest rates from lender to borrower
c. overcome loss of purchasing power through inflation
d. assure a steady flow of funds in gyrating capital markets - CORRECT ANSWER✅✅B?
Regarding a negative amortization loan, which statement is untrue;
a. initial payments are not sufficient to satisfy interest payment requirements
b. initial payments are adequate to satisfy principal and interest payment requirements
QUESTIONS AND ANSWERS
The sequence of the five-step financing process is generally
Funding/Closing, Servicing - CORRECT ANSWER✅✅Application, Analysis/Processing,
Qualifying/Underwriting, Funding/Closing, Servicing
The Federal Reserve System consists of __ reserve districts, and __ board members. - CORRECT
ANSWER✅✅12/7
interest-bearing savings accounts represent - CORRECT ANSWER✅✅time deposits
another name for a "take-out" loan is; - CORRECT ANSWER✅✅permanent financing or long-term
the financial turmoil in the mid 2000's was NOT fueled by
a. years of greed throughout the finance system
b. relaxation of loan qualifying requirements
c. a reliance on ever-increasing home values
d. the creation of more stringent loan qualifying requirements - CORRECT ANSWER✅✅D
which of the following characterizes lending policies of life insurance companies;
a. preference for very large projects
b. short payback terms
c. high discount points and fee structure
d. construction loans preferred over take-out loans - CORRECT ANSWER✅✅A - Preference for very large
projects
Disintermediation is best described as - CORRECT ANSWER✅✅a sudden flow of funds from thrift
institutions into the general money
,the principal purpse of the Depository Institutions and Monetary Control Act was to; - CORRECT
ANSWER✅✅phase out restrictions on interest rates that lenders may pay depositors
The agency responsible for chartering and overseeing the operations of national banks and bank holding
companies is the; - CORRECT ANSWER✅✅OCC- office of the comptroller
The trade association that consists of the major investors and lenders in the mortgage banking fields is
the; - CORRECT ANSWER✅✅Mortgage Bankers Association
Unlike institutional lenders, private lenders;
a. are highly regulated
b. are subject to California's usury statutes
c. apply uniform lending policies and practices
d. make only second trust deed loans - CORRECT ANSWER✅✅B
a purchase money loan is best illustrated by; - CORRECT ANSWER✅✅seller carrying back a first trust
deed.
Lending characteristics of private lenders include;
a. high degree of sophistication in loan decisions b. making primarily first trust deed loans c. charging
relatively low interest rates
d. short-term repayment schedules - CORRECT ANSWER✅✅D
an association of two or more parties who combine their financial resources for achieving specific
investment objectives is best illustrated by a ;
a. real estate investment trust
b. syndication
c. general partnership
d. limited partnership - CORRECT ANSWER✅✅B
, All of the following statements regarding the discount rate are true except;
a. the higher the discount rate charged the higher the interest rate charged to the borrower
b. the discount rate is the charge for overnight borrowing from the Fed.
c. any change in the discount rate immediately affects long term mortgage rated
d. the lower the discount rate the greater likehood is of lower borrowing rated by consumers - CORRECT
ANSWER✅✅C
which of the following receive their capital primarily from gifts, and are a good source for sale-leaseback
financing
a. state-chartered credit unions
b.labor unions
c. endowment funds
d. estate funds - CORRECT ANSWER✅✅C
alternative mortgage instruments (AIMs) are financing vehicles that
a. are universally standardized
b. offer an alternative to fixed-rate instruments
c. call for level payments throughout the life of the loan
d. call for 30-year repayment schedules - CORRECT ANSWER✅✅B
The principal objective of AMIs is to;
a. transfer the risk of rising interest rates from borrower to lender
b. transfer the risk of rising interest rates from lender to borrower
c. overcome loss of purchasing power through inflation
d. assure a steady flow of funds in gyrating capital markets - CORRECT ANSWER✅✅B?
Regarding a negative amortization loan, which statement is untrue;
a. initial payments are not sufficient to satisfy interest payment requirements
b. initial payments are adequate to satisfy principal and interest payment requirements
