Understanding Credit, Loans, and Housing Programs: A Comprehensive Guide, Exams of Humanities

Download Understanding Credit, Loans, and Housing Programs: A Comprehensive Guide and more Exams Humanities in PDF only on Docsity! HUD Certification Exam 115 Questions with 100% Correct Answers 1. Deed Restrictions - Correct answer Legally enforceable terms that govern the use of real estate 2. Redlining - Correct answer The practice of refusing to make residential loans or imposing more onerous terms on any loans made because of the predominant race, color, national origin, religion, sex, disability, or familial status of the area's residents. 3. Civil Rights Act of 1968 - Correct answer Following the assassination of Dr. Martin Luther King Jr., Congress passed what monumental piece of legislation, which prohibits discrimination in housing sales, rentals, and financing based on race, color, national origin, religion, sex, disability and familial status? 4. 7 - Correct answer The Fair Housing Act, as amended, protects how many characteristics? 5. Reasonable Modification - Correct answer A property manager of an apartment complex that receives federal financial assistance installs a ramp so that a tenant in a wheelchair can easily access her first-floor apartment. 6. Reasonable Accommodation - Correct answer Housing provider has a policy of requiring tenants to come to the rental office to pay their rent. A tenant with a mental disability, who is afraid to leave her unit, is allowed to mail her rent payment. CHARLIE WINDLER 1 7. True - Correct answer The Fair Housing Act does not prohibit a lender from showing potential clients information about different loans. 8. Fair Housing Assistance Program (FHAP) - Correct answer Provides annual funding to state and local agencies that enforce fair housing laws that are substantially equivalent to the Fair Housing Act. These funds go towards an agency's capacity building, administrative costs, investigative and enforcement efforts, training and other projects designed to support enforcement of fair housing law. 9. Fair Housing Initiatives Program (FHIP) - Correct answer Provides funding to fair housing organizations and nonprofits that assist people who may have been victims of housing discrimination. 10.Marketing Analysis - Correct answer Aim is to identify groups of people who would benefit most if targeted by the campaign, the characteristics of these people, and their expectations. 11.Networking Event - Correct answer The opportunity to increase awareness of the plans and actions of housing industry members, private organizations and foundations, public housing agencies, neighborhood groups, regional organizations, and others to further fair housing objectives. 12.Personal Information - Correct answer The section of the credit report that contains employer details. 13.Account Information - Correct answer The section of a credit report that contains information about a student loan. CHARLIE WINDLER 2 31.Stop Payment Fee - Correct answer Fee charged to invalidate a check before it is cashed. 32.NSF Fee - Correct answer Fee charged if there is not enough money in an account to cover a check payment of other purchase. 33.CD; Money Market; High-Interest Account - Correct answer Examples of accounts that would be ideal for short-term large purchase savings 34.Renters Insurance - Correct answer An insurance policy that provides coverage for damages, within a rental property, to renters' belongings and liability. 35.Discount Points - Correct answer A type of pre-paid interest normally paid at closing and generally calculated to be equivalent to 1% of the total loan amount 36.Default - Correct answer The inability to make timely payments or fulfill legal obligations of loan terms. 37.Equity - Correct answer Value of ownership interest in property. 38.Foreclosure - Correct answer A legal process in which mortgaged property is sold to pay the loan of a defaulting borrower. CHARLIE WINDLER 5 39.Escrow - Correct answer Funds to be used for specific purposes by parties carrying out a mutual transaction, deposited with a third party. 40.Closing Costs - Correct answer Fees for final property transfer that are not included in the price of the property. 41.Homeowners Insurance - Correct answer An insurance policy that can provide coverage for damages to a dwelling and contents that belong to the homeowner. 42.Front-end Ration - Correct answer A rate that calculates a borrower's housing-related obligations as a percentage of gross monthly income. AKA - Housing Ratio 43.Conventional Loan - Correct answer A mortgage loan backed by private lenders. Loans with a DP less than 20% of purchase price may require private mortgage insurance (PMI) 44.Principal - Correct answer The amount of money borrowed to buy a house or the amount of the loan that has not been paid back to the lender. 45.Mortgage Insurance Premium (MIP) - Correct answer A monthly payment, usually part of the mortgage payment for FHA loans, paid by a borrower for mortgage insurance. 46.Private mortgage Insurance (PMI) - Correct answer Insurance policy that protects a lender from potential risks when a homebuyer pays less than 20% for a down payment. CHARLIE WINDLER 6 47.Ground Rent - Correct answer An arrangement in which the owner of a dwelling or structure does not own the land on which the structure resides. 48.Association Dues - Correct answer Charged by community or Homeowners Association to pay for repairs, upkeep, landscaping, improvements and property management. 49.Adjusted Gross Income - Correct answer Gross income minus adjustments, or reductions, that one is eligible for, such as deductions for unreimbursed business expenses, tuition and fees, and contributions to certain retirement accounts. 50.Profit and Loss Statments - Correct answer A summary of revenue, costs, and expenses incurred during a defined period, such as a fiscal year. 51.Back-End Ratio - Correct answer A rate that calculates a borrower's total monthly debt, including housing and other debt obligations, as a percentage of gross monthly income. 52.Character - Correct answer Credit history, employment history, and housing stability to determine the likeliness that the borrower will repay their debts 53.Capacity - Correct answer Lender considers consistency of employment and income, adequacy of income to repay debt, recurring debts and frequency and type of wages CHARLIE WINDLER 7 71.HOME Investment Partnership Program - Correct answer HUD program that provides grants to states and localities for building, buying, and/or rehabilitating affordable housing for rent or homeownership or providing direct rental assistance to low-income people. 72.Community Development Block Grant Program - Correct answer HUD program that provides grants to states and localities to provide decent housing and a suitable living environment and to expand economic opportunities, principally for low-and-moderate income persons 73.Public Housing Agencies - Correct answer A state, county, municipality, or other government agency that develops or operates low-income housing. 74.Fair Market Rent - Correct answer A determination of the monthly rent of a rental property, calculated by HUD. Factored by geography and unit size, sets payment standards for public housing programs 75.Housing Choice Voucher - Correct answer Commonly referred to as Section 8; distributed locally by PHAs where you are free to choose any housing that meets program requirements 76.Project Based Voucher - Correct answer Allows PHAs to allocate up to 20% of its housing choice vouchers for project-based vouchers attached to specific housing units 77.If client has a project based voucher and moves out of the unit, do they lose the voucher assitance? - Correct answer Yes CHARLIE WINDLER 10 78.What is the purpose for the Veterans Affairs Supportive Housing (VASH) program - Correct answer To end veterans homelessness 79.What is the purpose of the Housing Opportunities for Persons with AIDS (HOPWA) program - Correct answer To assist with housing needs of people living with HIV/AIDS 80.Pre-Approval - Correct answer When a lender commits to lend a fixed loan amount based on review of completed loan application, credit reports, debt, savings and a review by an underwriter. 81.Balloon Payments - Correct answer An oversize payment due at the end of a mortgage 82.Pre-Payment Penalty - Correct answer A provision in some loans that charges a fee to a borrower who makes mortgage payments ahead of schedule. 83.Equal Credit Opportunity Act (ECOA) - Correct answer Requires lenders to make credit available equally without discrimination based on race, color, religion, national origin, age, sex, marital status, or receipt of income form public assistance programs 84.Real Estate Settlement Procedures Act (RESPA) - Correct answer Prohibits certain abusive practices that increase the cost of settlement services. Requires mortgage transaction disclosures that describe closing costs, lender servicing and escrow account practices, and business relationships CHARLIE WINDLER 11 85.Truth in Lending Act (TILA) - Correct answer Requires lenders disclose important information to protect consumers against 86.inaccurate and unfair loan billing and credit card practices, it requires lenders to provide 87.consumers with loan cost information so that they can comparison shop. 88.Know Before you Owe (TRID) - Correct answer requires easier to use mortgage disclosure forms that clearly outline the terms of the mortgage to the borrower and provide detailed explanations about how form should be completed and used. 89.The Know Before you Owe rule combined the Good Faith Estimate and the Truth in Lending disclosure and became what document? - Correct answer Loan Estimate 90.The Know Before you Owe rule combined the HUD-1 and the final TIL disclosure became what document? - Correct answer Closing Disclosure 91.Loan Estimate - Correct answer Designed to help consumers understand the key features, costs, and risks of the mortgage loan for which they are applying, must be provided to consumers no later than three business days after they submit a loan application 92.Closing Disclosure - Correct answer Designed to help consumers understand all of the costs of the transaction, must be provided to consumers at least three business days before closing. CHARLIE WINDLER 12 107. Home Equity Loan - Correct answer Best Improvement loan: A client's home improvement plan consists of a large one-time expense. 108. Streamlined 203k Loan - Correct answer Best loan: There are a handful of minor repairs that a client would like to make to the home that he is buying. He expects that they will be complete in just a few months. 109. Special Assessments - Correct answer Funds collected to pay for large maintenance projects that benefit the entire community. 110. Teaser Rate - Correct answer An initial temporary interest rate on an ARM that results in lower mortgage payments and only remains in effect for a short period of time before increasing. 111. Dual Tracking - Correct answer The process that occurs when the servicer moves forward with foreclosure while simultaneously working with the borrower to avoid foreclosure. 112. Servicemembers Civil Relief Act - Correct answer An act that protects military personnel and their dependents in issues related to housing, including certain protections against default judgement, foreclosure and eviction 113. Issuance of New Mortgage Rules - Correct answer To make it easier for borrowers to understand loan terms, to require homeownership counseling for some mortgages, and to expand protections CHARLIE WINDLER 15 114. Hardest hit Fund - Correct answer To enable 18 states and the District of Columbia to develop locally tailored programs to assist struggling homeowners in their community 115. CFPB - Correct answer To create a federal agency charged with addressing failures of consumer protections 116. Making Home Affordable - Correct answer To help homeowners avoid foreclosure, stabilize the housing market, and improve the economy 117. National Mortgage Settlement - Correct answer To penalize five financial institutions for deceptive lending and foreclosure practices CHARLIE WINDLER 16