CHAMPIONS REAL ESTATE FINANCE EXAM REAL EXAM 2024 | ALL QUESTIONS AND CORRECT ANSWERS, Exams of Real Estate Management

Download CHAMPIONS REAL ESTATE FINANCE EXAM REAL EXAM 2024 | ALL QUESTIONS AND CORRECT ANSWERS and more Exams Real Estate Management in PDF only on Docsity! CHAMPIONS REAL ESTATE FINANCE EXAM REAL EXAM 2024 | ALL QUESTIONS AND CORRECT ANSWERS | ALREADY GRADED A+ | LATEST UPDATE (JUST RELEASED) The two major purchasers of mortgages in the secondary market are: (a) Freddie Mac and Ginnie Mae (b) Fannie Mae and Freddie Mac (c) Ginne Mae and Fannie Mae (d) FHFA and HECM ------CORRECT ANSWER---------------B If a borrower is in default, the mortgage servicer may start the _________ process. (a) Forestalling (b) Closing (c) Casting (d) Foreclosure ------CORRECT ANSWER---------------D A collateral-dependent loan is also known as a __________. (a) Title loan (b) Cash advance (c) Hard money loan (d) Payment option loan ------CORRECT ANSWER---------------C Lenders bear less risk in making an FHA loan because the FHA: (a) Borrowers generally have higher than average income and credit (b) Requires a substantial down payment that minimizes risk (c) Is default insurance that will pay a claim to a lender in the event of default (d) Requires that the borrower have a higher credit score than other programs ------CORRECT ANSWER---------------C While some expenses may be paid in the form of a seller contribution or other means, the borrower actually must have the funds on hand for the: (a) Downpayment (b) Appraisal fee (c) Points (d) Brokerage fee ------CORRECT ANSWER---------------A FHA loans are available for: (a) Single family homes (b) Multifamily properties (d) Is not used until the borrower has committed to a particular lender ------ CORRECT ANSWER---------------B Ownership of real estate in Texas is established by certificates of title recorded in the Torrens System. (a) True (b) False ------CORRECT ANSWER---------------B The money that mortgage companies use to make loans comes from _________. (a) The sale of bonds (b) The Federal Reserve (c) Tax dollars (d) Real estate ------CORRECT ANSWER---------------A A lender is qualifying borrowers on a 36% ratio which includes house payment and regular monthly obligations. The borrower has a gross monthly income of $8,200 per month, and regular debt obligations totaling $1,375 per month. What is the maximum monthly payment for which this buyer will qualify? (a) $1,523 (b) $1,789 (c) $1,577 (d) $1,543 ------CORRECT ANSWER---------------C In a _________ foreclosure, the lender files suit with the judicial system. (a) Judicial (b) Power of sale (c) Deficiency judgment (d) Strict ------CORRECT ANSWER---------------A The Upfront Mortgage Insurance Premium (UFMIP) on an FHA loan is paid: (a) At closing (b) By the seller (c) In monthly installments added to the monthly payment (d) Only upon default ------CORRECT ANSWER---------------A The most probable sale price of a property is known as: (a) Net Price (b) Market Value (c) Contract Price (d) Assessed Value ------CORRECT ANSWER---------------B The minimum downpayment on a VA loan is: (a) 2% of the sales price (b) 0% of the sales price (c) 3.75% of the sales price (d) 1% of the sales price ------CORRECT ANSWER---------------B _________ is the process of creating a new mortgage loan. (a) Origination (b) Funding (c) Underwriting (d) Servicing ------CORRECT ANSWER---------------A A veteran can have more than one VA loan: (a) If the prior VA loan was paid in full and the property disposed of (b) The prior VA loan was assumed by an eligible veteran who substituted their entitlement (c) A or B (d) Under no circumstances - a VA loan is a "once in a lifetime" benefit ------ CORRECT ANSWER---------------C _________ are not-for-profit organizations that exist to serve their members. (a) An FHA loan requires a CRV (b) Ratios may be exceeded with compensating factors (c) FHA loans require a minimum 5% down payment (d) FHA loans are for low income borrowers only ------CORRECT ANSWER---------------B The age of a property based upon the appraiser's assessment of the property's maintenance and upgrades is its __________. (a) Useful life (b) Market age (c) Chronological age (d) Effective age ------CORRECT ANSWER---------------D In an ARM, the index: (a) Is controlled by the lender (b) Is controlled by the borrower (c) Varies with fluctuations in financial markets (d) Is chosen by the lender on the adjustment date ------CORRECT ANSWER---------------C The loan to value ratio is: (a) The minimum down payment (b) The percentage of value that a lender is willing to finance (c) Set by HUD on all loans (d) Based upon the assessed value of the property ------CORRECT ANSWER---------------B An amortizing loan is: (a) A loan whose payment includes both principal and interest (b) A straight loan requiring interest only payments (c) A wraparound loan (d) A loan that includes both real and personal property ------CORRECT ANSWER---------------A Escrow of taxes and insurance is required for FHA loans: (a) With a LTV of 90% or greater (b) Made to borrowers with a credit score under 600 (c) Always - all FHA loans require escrow of taxes and insurance (d) Unless the borrower agrees to pay an escrow waiver fee ------ CORRECT ANSWER---------------C A claim, lien, charge, or liability attached to and binding real property is a(n) __________. (a) Clause (b) Easement (c) Encumbrance (d) Conveyance ------CORRECT ANSWER---------------C FHA requires a down payment of: (a) 0% (b) 3.50% (c) 5% (d) 5.50% ------CORRECT ANSWER---------------B The _________ is the central banking system of the United States. (a) Federal Deposit Insurance Company (b) The U.S. Treasury (c) The U.S. Mint (d) The Federal Reserve ------CORRECT ANSWER---------------D The three major national credit reporting agencies are, Experian, Equifax and _________. (a) TransAtlantic (b) Union Pacific An appraiser finds that, on average, rental homes in the area are selling for $166,900. Average rents are $1575 per month. The appraiser is appraising a home with a projected gross rent of $1,520 per month. What is the value of the home using the gross rent multiplier? (a) $166,500 (b) $145,044 (c) $161,071 (d) $133,266 ------CORRECT ANSWER---------------C The maximum loan to value ratio on an FHA loan is 90%. (a) True (b) False ------CORRECT ANSWER---------------B A return that represents the money earned on an investment is called _________. (a) A Yield (b) A Stop (c) A Buffer (d) Liquidity ------CORRECT ANSWER---------------A The State of Texas plays a role in affordable housing through: (a) TALCB (b) TREC (c) TDHCA (d) TDEC ------CORRECT ANSWER---------------C If the marketing time in an appraisal is over six months, (a) It is not an issue because time is not a factor in valuation (b) It indicates a healthy market that is boosting property values (c) It suggests that the area is fully developed (d) It suggests that the market is slow enough to be a drag on property values ------CORRECT ANSWER---------------D If a home was built 30 years ago, thirty years is the home's ___________. (a) Useful life (b) Effective age (c) Chronological age (d) Depreciated age ------CORRECT ANSWER---------------C An appropriate loan for a property in need of significant rehabilitation would be a(n): (a) Construction loan (b) Construction to permanent loan (c) Cash back to buyer loan (d) Permanent loan ------CORRECT ANSWER---------------B Each consumer has three different credit scores from the three major credit reporting agencies because: (a) Some consumers use only one or two of the reporting agencies (b) Some consumers have locked their credit file (c) Not all creditors report to all of the agencies (d) Some of the credit reporting agencies are slow to update their records -- ----CORRECT ANSWER---------------C At closing, none of the charges listed on the Loan Estimate can change. (a) True (b) False ------CORRECT ANSWER---------------B Periodic payment amounts such as principal & interest, estimated escrow, estimated monthly payment, and ___________ must be disclosed in the Projected Payments section of the Loan Estimate form. (a) Mortgage insurance (b) Homeowner's insurance (c) Property value (d) Estimate inspection cost ------CORRECT ANSWER---------------A The lender may also be referred to as the ___________ in some deed of trust forms. (a) Mortgagor (b) Grantor (c) Mortgagee (d) Trustee ------CORRECT ANSWER---------------C _____ 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. ------CORRECT ANSWER---------------Closing The primary determinants of real estate values are supply and _____. ------ CORRECT ANSWER---------------Demand _____ is something of value that can be pledged as security for repayment of a loan. ------CORRECT ANSWER---------------Collateral Servicing includes which of the following activities? ------CORRECT ANSWER---------------Maintaining records of payment The monetary policies of the _____affects interest rates and the availability of funds. ------CORRECT ANSWER---------------Federal Reserve An excess supply of money in the market results in monetary _____. ------ CORRECT ANSWER---------------Inflation Which agency insures deposits in banks and thrift institutions for up to $250,000? ------CORRECT ANSWER---------------The Federal Deposit Insurance Corporation The _____ is the interest rate a reserve bank charges eligible financial institutions to borrow funds on a short-term basis. ------CORRECT ANSWER---------------Discount rate Raising taxes and increasing borrowing are two ways at the treasury level to: ------CORRECT ANSWER---------------Raise funds to pay for government spending The Fed uses three primary monetary policy tools to influence the cost and availability of credit: open market operations, the discount rate, and _____. ------CORRECT ANSWER---------------Reserve requirements When the costs of production and services increase, causing manufacturing prices to rise, it is called _____. ------CORRECT ANSWER-- -------------Cost-push inflation Which of the following transactions is exempt from RESPA? ------ CORRECT ANSWER---------------Temporary loans Under the _____, the use of certain terms in an advertisement triggers the need for full disclosure of lending terms. ------CORRECT ANSWER----------- ----Truth in Lending Act The Dodd-Frank Wall Street Reform and Consumer Protection Act established the _____. ------CORRECT ANSWER---------------Consumer Financial Protection Bureau How can Sylvia ensure that Victor is properly licensed as an RMLO? ------ CORRECT ANSWER---------------She can look him up in the NMLSR The secondary mortgage market was designed to provide greater liquidity to the residential real estate market, primarily by _____. ------CORRECT ANSWER---------------The sale of mortgage loans as investments Loans originated to adhere to Fannie Mae, Freddie Mac, and Ginnie Mae requirements for purchase are called _____. ------CORRECT ANSWER----- ----------Conforming loans Which of the following housing objectives does Fannie Mae address? ------ CORRECT ANSWER---------------Regional imbalances of available mortgage credit, The origination of mortgages for sale, The standardization of mortgage loans A _____ lender is one who funds mortgage loans from deposits on hand, retaining the loans long term. ------CORRECT ANSWER--------------- Portfolio An easement for ingress and egress is known as a(n) _____. ------ CORRECT ANSWER---------------Encumbrance Which of the following types of liens is one that is freely given, usually as collateral for a loan? ------CORRECT ANSWER---------------Involuntary lien Under a(n) _____, when the final payment is made to the seller, title transfers to the buyer. ------CORRECT ANSWER---------------Special warranty deed A deed of trust is a(n) _____ instrument. ------CORRECT ANSWER----------- ----Three-party The lender may also be referred to as the _____ in some deed of trust forms. ------CORRECT ANSWER---------------Mortgagee The type of clause that allows a new borrower to take over payments on an existing loan is a(n) _____ clause. ------CORRECT ANSWER--------------- Assumption A(n) _____ clause states that the lien is defeated when the debt is repaid. - -----CORRECT ANSWER---------------Defeasance Prepayment penalties can be found in more than two-thirds of _____. ------ CORRECT ANSWER---------------Sub-prime mortgages A condition of a mortgage loan which prohibits prepayment of the loan prior to a certain date is known as a(n) _____ clause. ------CORRECT ANSWER---------------Lock-in The basic formula for interim interest is _____. ------CORRECT ANSWER-- -------------Interest x Payment Rate / 365 x # of days until the end of the month Semi-annual interest is calculated _____. ------CORRECT ANSWER--------- ------Twice per year Ailene and Arnold are on a fixed income. They want to buy a home and are researching different loan options. Which type of loan would be a poor choice for the ------CORRECT ANSWER---------------An adjustable-rate mortgage What would the interest rate be on a $155,000 loan if the annual interest owed is $5,425? (Use a 365-day year.) ------CORRECT ANSWER------------ ---3.50% An FHA borrower can use gift funds from a(n) _____ as funds for a downpayment. ------CORRECT ANSWER---------------a parent Which loan program would allow Edmund to purchase a home with a downpayment of $0? ------CORRECT ANSWER---------------A VA loan A cash-out refinancing loan is a loan guaranteed by the _________ which refinances any type of lien against a secured property. ------CORRECT ANSWER---------------VA The VA partial _____ on a real estate loan reduces lenders' risk. ------ CORRECT ANSWER---------------Guarantee The sales comparison approach focuses on _____ or recent sales of similar properties, to determine value. ------CORRECT ANSWER-------------- -Comparables Appraisers commonly refer to the property being appraised as the _____. -- ----CORRECT ANSWER---------------Subject property Sales Price divided Monthly Rent calculates the _____. ------CORRECT ANSWER---------------Gross Rent Multiplier For a property to have value, it must have four characteristics, including demand, scarcity, _____, and transferability. ------CORRECT ANSWER----- ----------Utility If Mr. and Mrs. Wu are pre-approved for a mortgage, what form will they receive? ------CORRECT ANSWER---------------Form B Conditional approval letter