Real Estate Loans: Types, Fees, and Regulations, Exams of Real Estate Management

Download Real Estate Loans: Types, Fees, and Regulations and more Exams Real Estate Management in PDF only on Docsity! REAL ESTATE FINANCING EXAM PRACTICE EXAM 2024 | ALL QUESTIONS AND CORRECT ANSWERS | ALREADY GRADED A+ | LATEST VERSION In the course of offering a note for resale, Mr. Kim, an investor, explains that the note contains an alienation clause. This one fact would: prevent transfer. not be acceptable or legal. reduce the face value. make the note more negotiable. ------CORRECT ANSWER--------------- make the note more negotiable. What is the document commonly used to secure a loan on personal property? Security agreement Financing statement Mortgage Bill of sale ------CORRECT ANSWER---------------Security agreement What type of property is included in a package loan? Personal property Real property and personal property Real property None of the above ------CORRECT ANSWER---------------Real property and personal property Mr. Smith sells his lot for $10,000 and takes back a promissory note for $5,000. Needing cash, he immediately sells the note at a discount to Mr. Brown for $3,500, assigning the security instrument and endorsing the note "without recourse." The borrower defaults before making any principal payments. What should Mr. Brown do to recover his loss? Foreclose to recover $3,500 Sue for specific performance to recover his $3,500. Recover from Mr. Smith as the transaction was usurious Foreclose to recover $5,000 ------CORRECT ANSWER--------------- Foreclose to recover $5,000 The process of depositors removing funds from savings is called: deficiency. disintermediation. deregulation. default. ------CORRECT ANSWER---------------disintermediation. Which security instrument is most valuable to a buyer who may fall on temporary hard times or default on payments? First deed of trust Second deed of trust Financing agreement Mortgage ------CORRECT ANSWER---------------Mortgage A loan originator is an individual who: obtains a listing from a seller. records the names of potential borrowers in a logbook. takes a residential mortgage loan application. takes a loan application for a timeshare. ------CORRECT ANSWER---------- -----takes a residential mortgage loan application. When using a purchase money deed of trust, the trustor: receives a promissory note for the amount borrowed. lends money to the beneficiary. signs the promissory note and deed of trust and gives it to the beneficiary. only signs the deed if trust. ------CORRECT ANSWER---------------signs the promissory note and deed of trust and gives it to the beneficiary. What is any charge payable directly or indirectly by the borrower and imposed directly or indirectly by the lender? A prepayment penalty A finance charge A loan estimate An actual rate ------CORRECT ANSWER---------------A loan estimate If the annual percentage rate provided in the good faith estimate is out of tolerance under TILA, creditors must provide a corrected TIL disclosure statement to a consumer: at the time of consummation of the transaction. one week before the consummation of the transaction. on or before the 3rd business day before consummation of the transaction. no more than 3 business days after the consummation of the transaction. - -----CORRECT ANSWER---------------on or before the 3rd business day before consummation of the transaction. Ms. Blue had been showing homes to a young, newly married couple for quite some time and finally found one which they wanted to buy. But even with the best loan available, they did not have enough cash for the down payment. They felt that they could raise the additional money they needed by borrowing against their automobile and other sundry personal property. Under these circumstances, the broker should: advise against it. tell them it is their decision to make, but point out the pitfalls of this kind of financing. advise them to go ahead because real estate always appreciates in value. tell them nothing and let them make their own decision. ------CORRECT ANSWER---------------tell them it is their decision to make, but point out the pitfalls of this kind of financing. To buy a car, a man obtained a second on his home for $2,400, payable $77.00 per month, including interest at 6%. When he sold his home, he paid off the entire loan balance of $1,989. What was the face amount of the principal on the loan? $2,400 $2,772 $2,000 $1,989 ------CORRECT ANSWER---------------$2,400 A down payment of $1,000 for the purchase of an apartment house valued at $690,000 is a good example of: plottage. leverage. highest and best value. none of the above ------CORRECT ANSWER---------------leverage. Under the TILA-RESPA rule, what term refers to a charge imposed for paying "all or part of" a transaction's principal before the date on which the principal is due? A finance charge A prepayment penalty An annual percentage rate A loan estimate ------CORRECT ANSWER---------------A prepayment penalty A broker negotiated a hard money $4,000 note secured by a second deed of trust with a term of 4 years, for a client. Considering the above transaction, which of the following is a correct statement? There would be no limit placed upon the commission the broker could charge His maximum legal commission would be $600 His maximum legal commission would be $400 His maximum legal commission could be 5% of the note or $325, whichever was greater ------CORRECT ANSWER---------------His maximum legal commission would be $600 To bring current and restore is to: the mortgagor and the mortgagee. Fannie Mae. the mortgagee, primarily. ------CORRECT ANSWER---------------the mortgagee, primarily. What is the maximum loan available on a VA loan? 80% of appraisal 90% of appraisal $45,000 Amount on CRV ------CORRECT ANSWER---------------Amount on CRV Subordinate is most opposite to: superior. inferior. subrogation. novation. ------CORRECT ANSWER---------------superior. A holder in due course would be successful against a defense of: incapacity of the maker. lack of consideration to the maker. forgery of the maker's signature. the interest rate of the note exceeded the usury law limitations. ------ CORRECT ANSWER---------------lack of consideration to the maker. Who holds the title to a property bought with a Cal-Vet entitlement? The veteran The trustee The California Department of Veterans Affairs The US Department of Veterans Affairs ------CORRECT ANSWER----------- ----The California Department of Veterans Affairs Of the following, which would most likely REQUIRE a judicial foreclosure? Mortgage Land contract with power of sale Deed of trust Security deed ------CORRECT ANSWER---------------Mortgage Notes are said to be negotiable and non-negotiable. Which of the following is true about a negotiable note? If it is endorsed without recourse, it is non-negotiable. An alienation clause in the note would make it non-negotiable. If a note is secured by a mortgage, the note is negotiable, but the mortgage is non-negotiable. To be negotiable, a note must be endorsed by the maker. ------CORRECT ANSWER---------------If a note is secured by a mortgage, the note is negotiable, but the mortgage is non-negotiable. Which party benefits the most from the recordation of a Request for Notice of Default? The trustee of the second deed of trust The trustor of the second deed of trust Beneficiary of the second deed of trust None of the above ------CORRECT ANSWER---------------Beneficiary of the second deed of trust Who benefits from a prepayment penalty? Lender Trustor Mortgagor Borrower ------CORRECT ANSWER---------------Lender A trustee's sale is related to: yard sale. foreclosure. installment sale. deficiency judgment. ------CORRECT ANSWER---------------foreclosure A written promise to pay or evidence of a debt is called a: deed of trust. promissory note. mortgage. deed. ------CORRECT ANSWER---------------promissory note. Liquidation of an obligation means: annexation. made in good faith and completely accurate. made in good faith and consistent with information available to the lender. completely accurate based on information given by a third party. completely accurate based on information provided by the borrower's reference. ------CORRECT ANSWER---------------made in good faith and consistent with information available to the lender. In a deed of trust, which of the following is the borrower? Grantor Mortgagor Trustor Trustee ------CORRECT ANSWER---------------Trustor The maximum commission a loan broker may charge to negotiate an $8,000 hard money first trust deed, due in 2 years is: $400. $500. $600. $700. ------CORRECT ANSWER---------------$400. (5%) What provides the most security to the lender of a junior loan? Prepayment penalty Notice of default Loan to value ratio Request for foreclosure ------CORRECT ANSWER---------------Loan to value ratio A real estate broker arranges a hard money loan secured by a second trust deed for $7,000 to be repaid in 5 years. Her maximum commission would be: 15%. 5%. 10%. none of the above ------CORRECT ANSWER---------------15%. The instrument by which a trustee conveys the bare legal title back to a trustor when a trustor has paid off a deed of trust is a: quitclaim deed. grant deed. reconveyance deed. warranty deed. ------CORRECT ANSWER---------------reconveyance deed. CRV is a common phrase used in the financing of real estate. CRV is issued by the: Fannie Mae. Department of Veterans Affairs. Federal Housing Administration. California Department of Veterans Affairs. ------CORRECT ANSWER-------- -------Department of Veterans Affairs. What does the Closing Disclosure Form integrate and replace? The existing HUD-1 and final TILA disclosure The existing HUD-1 and preliminary TILA disclosure The existing HUD-1 The final TILA disclosure ------CORRECT ANSWER---------------The existing HUD-1 and final TILA disclosure All of the following are elements under the definition of "application" under Regulation Z, except the: borrower's monthly income. borrower's credit score. loan amount. value of the property. ------CORRECT ANSWER---------------borrower's credit score. Mr. Noro bought a property using a purchase money trust deed. A few years later he sold the property to Ms. Hassen for all cash. Which of the following would not be disclosed by the public records? A grant deed to Mr. Noro The original trust deed that Mr. Noro used in purchasing the property A reconveyance deed to Mr. Noro A reconveyance deed to Ms. Hassen ------CORRECT ANSWER-------------- -A reconveyance deed to Ms. Hassen What consolidated four disclosures under TILA and RESPA into two disclosure forms? The Loan Estimate and the Summary of Costs The Loan Estimate and the Finance Charge Disclosure The Loan Estimate and the Closing Disclosure The Summary of Costs and the Closing Disclosure ------CORRECT ANSWER---------------The Loan Estimate and the Closing Disclosure borrower becomes contractually obligated to the lender on the loan. borrower becomes contractually obligated to a seller on a real estate transaction. buyer and seller sign a purchase agreement. seller becomes contractually obligated to the lender on the loan. ------ CORRECT ANSWER---------------borrower becomes contractually obligated to the lender on the loan. Under the provisions of FHA the borrower is required to pay the non- recurring closing costs unless the seller agrees to pay part or all of them. Which of the following are not considered non-recurring closing costs? Credit information costs and loan points (fees) Structural, pest control fees, and FHA appraisal fees Drawing and escrow fees; title search and title insurance Currently due property taxes and hazard insurance on property ------ CORRECT ANSWER---------------Currently due property taxes and hazard insurance on property A lender or mortgage broker must provide the new Integrated Disclosures for real estate transactions: immediately. beginning January 1, 2015. on or after October 3. 2015. involving properties built after October 3, 2015. ------CORRECT ANSWER- --------------on or after October 3. 2015. Mortgages and deeds of trust are considered to be: personal property. promissory notes. estates in real estate. all of the above. ------CORRECT ANSWER---------------personal property. In checking documents in the county recorder's office, you will find that the recorded deed of trust refers to standard clauses contained in a previously recorded deed of trust. This previously recorded deed of trust is known as a: prima facia deed of trust. short form deed of trust. master deed of trust. fictitious deed of trust. ------CORRECT ANSWER---------------fictitious deed of trust. The Servicemembers Civil Relief Act is of the greatest interest to: soldiers and sailors during war. land developers who were members of the military. real estate licensees. servicemembers who sign a deed of trust. ------CORRECT ANSWER-------- -------servicemembers who sign a deed of trust. A hard money loan is considered to be: a loan from a commercial lender wherein the proceeds are credited to the borrower in cash. the same as a purchase money loan. a loan for money in a hard market. none of the above. ------CORRECT ANSWER---------------a loan from a commercial lender wherein the proceeds are credited to the borrower in cash. When a borrower fails to pay, it is known as: redemption. reinstatement. default. devise. ------CORRECT ANSWER---------------default "CRV" is a common phrase used in the financing of real estate. The CRV is issued by the: Fannie Mae U.S. Department of Veterans Affairs. Federal Housing Administration. California Department of Veteran's Affairs. ------CORRECT ANSWER------- --------U.S. Department of Veterans Affairs. Lenders must re-disclose terms or costs on the Closing Disclosure if certain changes occur to the transaction after the Closing Disclosure was first provided that cause it to become inaccurate. Which of the following would not require a corrected Closing Disclosure? The disclosed APR remains unchanged. The disclosed APR becomes inaccurate. The loan product changes. vendee. equitable title owner. purchaser. all of the above. ------CORRECT ANSWER---------------all of the above. There are many differences between mortgages and deeds of trust. All of the following are differences, except the: number of parties involved in the instrument. conveyance of title.. security for the loan. remedy for default. ------CORRECT ANSWER---------------security for the loan. The power of sale is given to the trustee by the: beneficiary. seller. vendor. trustor. ------CORRECT ANSWER---------------trustor. Mr. Small sells his house for $100,000 and takes back a trust deed and note for $50,000. Needing cash, he immediately sells the trust deed and note at a discount to Mr. Big for $35,000, assigning the trust deed and endorsing the note "without recourse." If the trustor defaults before making any principal payments (disregarding costs of collection), by which method would Mr. Big get the greatest amount in the shortest period of time? Foreclosure by trustee's sale to collect $35,000 Sue for specific performance Recover from Mr. Small because the transaction was usurious Foreclosure by trustee's sale to recover $50,000 ------CORRECT ANSWER---------------Foreclosure by trustee's sale to recover $50,000 What loan product requires a Loan Estimate? Closed-end mortgages Open-end mortgages Home equity lines of credit Reverse mortgages ------CORRECT ANSWER---------------Closed-end mortgages Long term loans to be issued by one lender upon completion of the interim construction financing by another lender are known as: discount loans. take out loans. redemption loans. renewal loans. ------CORRECT ANSWER---------------take out loans. The largest loans would most likely be made by a(n): mutual savings bank. commercial bank. federal bank. insurance company. ------CORRECT ANSWER---------------insurance company. The most important factor in the qualification of a buyer for a loan is his: number of dependents. savings account. adequacy of income. type of job. ------CORRECT ANSWER---------------adequacy of income. A hard money loan is one made in exchange for: cash. property. a novation. a deed. ------CORRECT ANSWER---------------cash An impound account on a loan benefits the: borrower. lender. FHA. trustor. ------CORRECT ANSWER---------------lender You, as an agent, have sold a home for which you negotiated a first loan with a bank and a second loan to be taken back by the seller. You have been requested to record a Request for Notice. This is usually to protect: trustee of the first loan. trustee of the second loan. trustor of the second loan. beneficiary of the second loan. ------CORRECT ANSWER--------------- beneficiary of the second loan. Under the California Veterans' Farm & Home Purchase Plan, the purchaser would initially receive which of the following? Grant deed Warranty deed Land contract State deed ------CORRECT ANSWER---------------Land contract n the language of real estate, which of the following terms does not belong with the others? Joint tenancy Hypothecate Subordination Second mortgage ------CORRECT ANSWER---------------Joint tenancy Interest paid on the principal amount and the accrued interest due on the loan is referred to as: simple interest. compound interest. cumulative interest. deferred interest. ------CORRECT ANSWER---------------compound interest. A note payable interest only, is called a: straight note. amortized installment note. nonnegotiable note. adjustable rate note. ------CORRECT ANSWER---------------straight note. Beneficiaries prefer purchase money mortgages and deeds of trust because they have priority over: buyer's liens subsequent to purchase. tax liens. all liens. none of the above. ------CORRECT ANSWER---------------buyer's liens subsequent to purchase. The SAFE Mortgage Licensing Act is designed to enhance consumer protection and reduce fraud by providing: uniform license applications and reporting requirements for state licensed- loan originators. a comprehensive licensing and supervisory database. increased accountability and tracking of loan originators. all of the above. ------CORRECT ANSWER---------------all of the above. A purchase money loan is a(n): loan received from a mortgage broker. equity loan. loan made at the time of the sale whose proceeds go to the seller. loan whose proceeds go to the buyer. ------CORRECT ANSWER------------- --loan made at the time of the sale whose proceeds go to the seller. Bob purchased an existing loan from a lender for $13,500. At the time he purchased the loan it had just been created and had a loan balance of $15,000. The borrower never made a payment on the loan and Bob decided to foreclose. What is the maximum amount that Bob can foreclose for? $13,500 An investor who purchased an existing loan has no right to foreclose $13,500 minus the trustee fee $15,000 ------CORRECT ANSWER---------------$15,000 Mr. Sloan wishes to purchase a piece of industrial property and apply for a large loan to help him purchase the property. The lender is most interested in: the appraised value of the land and the improvements. the financial condition and credit standing of the applicant for the loan. the demand for the product being manufactured on the property. all of the above. ------CORRECT ANSWER---------------the financial condition and credit standing of the applicant for the loan. Jane offers to purchase Stan's property for $139,000. Jane takes title subject to a VA loan. What is the effect on liability? Jane is primarily liable for the loan Stan and Jane are both liable for the loan Stan is liable for the loan Neither Jane nor Stan is liable for the loan ------CORRECT ANSWER------- --------Stan is liable for the loan Interest is a very important part of the lending business. Interest calculated on the total amount of the principal, plus accumulated interest, is referred to as: secondary deed of trust. mortgage. bill of sale. ------CORRECT ANSWER---------------pledge agreement. Of the following, a primary source of funds for residential financing is: the Federal Home Loan Bank. Freddie Mac. mortgage companies. the Federal Housing Administration. ------CORRECT ANSWER--------------- mortgage companies. A mortgage that may be increased without rewriting the mortgage is known as a(n): pledged mortgage. obligatory advanced mortgage. amortized mortgage. open end mortgage. ------CORRECT ANSWER---------------open end mortgage. Which of the following may not be a blanket encumbrance,as it applies to subdivisions? Mortgage Deed of trust Real property taxes Mechanics' liens ------CORRECT ANSWER---------------Real property taxes In the lending business many terms are synonymous. Which of the following pairs has synonymous terms? Interim loan--construction loan Take out loan--construction loan Interim loan--take out loan Amortized progressive loan--take out loan ------CORRECT ANSWER-------- -------Interim loan--construction loan Lenders must provide a corrected Closing Disclosure if an event in connection with the settlement occurs during the _____ day period after consummation that causes the Closing Disclosure to be inaccurate and result in a change to an amount paid by the borrower from what was previously disclosed. 60 calendar 30 calendar 45 calendar 90 calendar ------CORRECT ANSWER---------------30 calendar There are two instruments involved in a security transaction involving a deed of trust - the promissory note and the deed of trust. Of the following, which is a correct statement concerning these instruments? The deed of trust is worthless without the promissory note. The deed of trust is negotiable in the ordinary course of business. The promissory note is the instrument used to bring a deficiency action to court. A promissory note is non-negotiable in the secondary mortgage market. --- ---CORRECT ANSWER---------------The promissory note is the instrument used to bring a deficiency action to court. Which of the following does not apply to a mortgage? Contract Trustee Note Hypothecation ------CORRECT ANSWER---------------Trustee A man purchased a residence for $125,000. He deposited $115,000 cash, and a note secured by a deed of trust for the balance of the purchase price. Three years after the closure of escrow he executed a second deed of trust on the property to secure a loan he used to purchase an automobile. Considering the above facts which is a correct statement? The beneficiary of the first trust deed may foreclose in the event of default but has no recourse to a suit for a deficiency The beneficiary on the second deed of trust may not sue for a deficiency judgment because it is classified as a purchase money trust deed Both beneficiaries have the right of foreclosure and to sue for any deficiency they suffer Neither beneficiary has any right to sue after the foreclosure as they have received their full rights under a trust deed relationship ------CORRECT ANSWER---------------The beneficiary of the first trust deed may foreclose in the event of default but has no recourse to a suit for a deficiency What is the federal law requiring mortgage loan originators to be licensed according to national standards? Fair Credit Reporting Act Federal Finance Act Secure and Fair Enforcement for Mortgage Licensing Act National Mortgage Act ------CORRECT ANSWER---------------Secure and Fair Enforcement for Mortgage Licensing Act legal title, are liable and must continue to make payments on the land contract Gerald, who is a 17-year-old minor, wishes to purchase a home. This can be done legally when: buying a home under the Cal-Vet program. buying a home only under FHA or DVA. seeking any type of conventional financing. none of the above ------CORRECT ANSWER---------------buying a home under the Cal-Vet program. A federal act that provides protection against foreclosures of real property owned by a person in the service is: Serviceman's Readjustment Act of 1944. Servicemembers Civil Relief Act. Moratorium Relief Act of 1968. Release of Obligation Act of 1947. ------CORRECT ANSWER--------------- Servicemembers Civil Relief Act. A man bought a home for $160,000 and paid $16,000 down. Later, the value of the property rose to $170,000. This is an example of: escalation. plottage. leverage. assemblage. ------CORRECT ANSWER---------------leverage When a loan is "called" by the mortgagee, this means: the borrower has the right to pay off the balance. the lender accelerates all monies due. the mortgagee and the lender have agreed to the terms of the loan. all of the above. ------CORRECT ANSWER---------------the lender accelerates all monies due. The minimum time frame for a foreclosure under a deed of trust is: 6 months and 21 days. 5 months and 21 days. 4 months and 21 days. 3 months and 21 days. ------CORRECT ANSWER---------------3 months and 21 days. There are many differences between deeds of trust and mortgages. The main difference is: rights of parties in possession as to renting the property. redemption. amounts of money that can be borrowed. number of years money can be borrowed. ------CORRECT ANSWER-------- -------redemption A real property sales contract for the purchase of property in a subdivision must have: a time and manner of payment. the basis for a tax estimate, if one is made. a legal description of the property. all of the above. ------CORRECT ANSWER---------------all of the above. A seller takes back a deed of trust and note as part of the purchase price and the buyer immediately defaults. What action could the seller take? Attachment Writ of execution Deficiency judgment Request trustee to record a "Notice of Default" ------CORRECT ANSWER-- -------------Request trustee to record a "Notice of Default" Which of the following statement does not belong with the others? Not insured by a governmental agency Higher interest rate FHA loan Conventional loan ------CORRECT ANSWER---------------FHA loan Points on a Cal-Vet loan are paid by: the lender. the Department of Loan Approvals. the borrower. none of the above ------CORRECT ANSWER---------------none of the above (No Points) What would determine the priority of a mortgage? the Real Property Security Law limits the maximum charges. the maximum costs are limited by the Business and Profession Code. none of the above ------CORRECT ANSWER---------------the maximum costs are limited by the Business and Profession Code. A holder in due course is one who has taken a negotiable instrument that is complete and valid on its face, has become the holder before it was overdue, and taken it in good faith without knowledge of defect in the title. Under which of the following circumstances would a person taking a negotiable instrument not be classified as a holder in due course? Taking a note endorsed in blank, that is, where the holder simply signs his name on the back of the note Taking a straight note on which payment is not due for two years Taking a note that is made payable to bearer rather than to the order of a specific person Taking a note properly endorsed by the payee but not signed by the maker ------CORRECT ANSWER---------------Taking a note properly endorsed by the payee but not signed by the maker Under Article 7 of the Business and Professions Code, Section 10242, how much commission can a loan broker charge to negotiate a junior loan for $4,500 to be repaid in a period of 5 years? 5% 10% 15% Does not apply ------CORRECT ANSWER---------------15% A seasoned loan in a lender's portfolio would indicate: the time of year it was made. the maturity date. an established record of prompt payments. the date after first payment is made. ------CORRECT ANSWER--------------- an established record of prompt payments. A man had a promissory note for $2,000. He sold it to a friend for $1,500. What is this practice called? Prepayment Hypothecation Usury Discounting ------CORRECT ANSWER---------------Discounting The largest loans would most likely be made by a(n): mutual savings bank. commercial bank. federal savings bank. insurance company. ------CORRECT ANSWER---------------insurance company. Land contracts, also referred to as installment contracts, are commonly used when the purchaser does not have sufficient cash to take title and pay the balance of the purchase price. Of the following, which is a correct statement concerning a land contract? It normally involves a third-party lender. A purchaser may never assign his interest in the property prior to full payment of the purchase price. An agreement prohibiting the recording of the contract is enforceable. It is a security instrument. ------CORRECT ANSWER---------------It is a security instrument. The Loan Estimate is the form that replaces the: Good Faith Estimate. Borrower's Intent to Proceed. Closing Disclosure. Summary of Costs. ------CORRECT ANSWER---------------Good Faith Estimate. When must a borrower receive the Closing Disclosure from a lender? No later than 3 business days after consummation No later than 3 business days prior to consummation One week following consummation One week prior to consummation ------CORRECT ANSWER---------------No later than 3 business days prior to consummation Mr. Dunn purchsed his home from Mr. Spring using seller carry-back financing. Later, Mr. Kirk bought the property subject to the loan. If Mr. Kirk immediately defaulted, Mr. Spring: may get a deficiency judgment against Mr. Dunn. may get a deficiency judgment against Mr. Kirk. may get a deficiency judgment against Mr. Dunn and Mr. Kirk. may not get a deficiency judgment because it was a purchase money loan. ------CORRECT ANSWER---------------may not get a deficiency judgment because it was a purchase money loan. If the $100,000 loan cannot be obtained, the buyers may require a return of their deposit and cancel the transaction. If the $100,000 loan cannot be obtained, the parties may renegotiate the terms of the purchase if mutually agreeable. If the maximum loan obtainable on the property is $90,000, the buyers could complete the purchase by making a $10,000 cash down payment. The buyers may choose any of the above options. ------CORRECT ANSWER---------------The buyers may choose any of the above options. In searching the files of the county recorder's office, you could most likely tell a first mortgage from a second mortgage by: reading of the document. information received from the recorder. reading the contents of the document. time and date of recording. ------CORRECT ANSWER---------------time and date of recording. Ms. "A" purchased a piece of property for $200,000, incurring a 30 year loan for $180,000. Inflationary trends caused the dollar to decrease in value. Who would benefit? Trustee Trustor Beneficiary Mortgagee ------CORRECT ANSWER---------------Trustor Mortgage companies, which operate primarily as mortgage loan correspondents of life insurance companies, mutual savings banks, and others, are usually regulated by: federal law. state law. county ordinances. Federal Housing Administration. ------CORRECT ANSWER--------------- state law. Lenders must ensure that borrowers receive the Closing Disclosure no later than 3 business days before consummation. Which statement is incorrect regarding delivery of the Closing Disclosure. Once the Closing Disclosure is delivered, the transaction can be consummated 72 hours later. The 3-business day waiting period is measured by days, not hours. The Closing Disclosure must be delivered 3-business days before closing, and not 72 hours prior to closing. After providing the Closing Disclosure, there is a 3-day waiting period. ------ CORRECT ANSWER---------------Once the Closing Disclosure is delivered, the transaction can be consummated 72 hours later. A clause in a loan document describing certain events that would cause the entire loan to be due is called: assumption clause. subordination clause. or more clause. acceleration clause. ------CORRECT ANSWER---------------acceleration clause. When a seller carries back a note secured by a deed of trust from the buyer, the seller becomes the ___, and the buyer becomes the ___. beneficiary, trustor trustor, beneficiary trustee, trustor trustor, trustee ------CORRECT ANSWER---------------beneficiary, trustor A lender would revise the Loan Estimate for any of the following reasons, except: changed circumstances affecting eligibility of the seller. changed circumstances affecting the settlement charges. revision is requested by the borrower. the points can change because the interest rate is not locked. ------ CORRECT ANSWER---------------changed circumstances affecting eligibility of the seller. A(n) ____________ is a person who is an innocent purchaser of a negotiable note without knowledge of any defect: receiver of the trust original payee of the note holder in due cause holder in due course ------CORRECT ANSWER---------------holder in due course If a seller wanted to relieve himself of the primary liability for payment of a promissory note, he must find a buyer who is willing to: Notice to vacate ------CORRECT ANSWER---------------Notice of default The least complicated loan to assume would be: institutional. Cal-Vet. FHA. savings bank. ------CORRECT ANSWER---------------FHA Consideration is to a contract as endorsement is to a(n): deed of trust. promissory note. land contract. option. ------CORRECT ANSWER---------------promissory note. For certain costs or terms, lenders are permitted to charge borrowers more than the amount disclosed on the Loan Estimate without any tolerance limitation. Which of the following would not be a permitted variations to tolerance limitation? Charges paid to third-party service providers for services that are required by the lender. Charges made in good faith that may exceed the disclosed amount include prepaid interest, property insurance premiums, and amounts placed into an escrow, impound, reserve, or similar account. Charges paid to third-party service providers for services not required by the lender. Services required by the lender if the lender permits the borrower to shop and the borrower selects a third-party service provider not on the lender's written list of service providers. ------CORRECT ANSWER--------------- Charges paid to third-party service providers for services that are required by the lender. The purchaser of a home under the California Veteran's Farm and Home Purchase Act acquires possession through a: grant deed. quitclaim deed. land contract. special state deed. ------CORRECT ANSWER---------------land contract. Of the following loans, which loan never requires the borrower to pay discount points? FHA VA Cal-Vet Conventional ------CORRECT ANSWER---------------Cal-Vet When a deed of trust is properly executed, the power of sale is given by the: trustor to the trustee. trustor to the beneficiary. beneficiary to the trustee. none of the above ------CORRECT ANSWER---------------trustor to the trustee. Mortgage markets are classified as primary and secondary markets. Of the following statements concerning these markets, which is correct? Secondary financing is generally obtained in the secondary market. A lender wishing to reduce its holding of FHA and VA loans would probably sell them on the primary mortgage market. Mortgage companies are primarily engaged in the primary market Lenders in the primary mortgage market are not permitted to engage in secondary mortgage market. activities ------CORRECT ANSWER-------------- -Mortgage companies are primarily engaged in the primary market Edna Hall is a farmer and needs to raise additional working capital and wishes to encumber her growing crops. If the lending institution is agreeable to this, Ms. Hall would be asked to sign a: financing statement. deed of trust. growing crops mortgage. straight financing mortgage. ------CORRECT ANSWER--------------- financing statement. What provides the most important protection for a lender on a junior loan? The borrower's income The borrower's credit rating The borrower's equity in the property None of the above ------CORRECT ANSWER---------------The borrower's equity in the property Which agency holds the deed on a Cal-Vet loan? U.S. Department of Veterans Affairs California Department of Veterans Affairs Lending Institution State of California ------CORRECT ANSWER---------------California Department of Veterans Affairs A VA appraiser, in processing the CRV for the loan, would be most concerned with: the credit rating of the borrower. the neighborhood in which the home is located. the loan to value ratio of the requested loan. the veteran's access to additional funds. ------CORRECT ANSWER---------- -----the neighborhood in which the home is located. An "assignment of rents" clause in a deed of trust would most likely benefit: trustor. beneficiary. trustee. lessee. ------CORRECT ANSWER---------------beneficiary. A deed of trust is the most common method of financing the purchase of real property in California. All of the following are correct statements concerning a trust deed except: the chief purpose of a trust deed is to create a lien. a trust deed may be foreclosed without court action or approval. a trust deed has no redemption period. the promissory note is held by the beneficiary as his prime security for the loan. ------CORRECT ANSWER---------------the promissory note is held by the beneficiary as his prime security for the loan. According to TILA, for purposes of rescission and the 3-day or 7-day waiting period, how is a business day defined? A business day is defined as: all calendar days except Sundays and legal public holidays. a day in which the creditor's offices are open to the public for carrying on substantially all of its business functions. Monday through Friday and 1/2 day on Saturday. all weekdays except legal holidays. ------CORRECT ANSWER--------------- all calendar days except Sundays and legal public holidays. A person can borrow money on personal property with a: bill of sale. deed of trust. mortgage. security agreement. ------CORRECT ANSWER---------------security agreement. Broker, Jenny Johnson, was approved for the $200,000 bank loan that she needed to open up her real estate office, as long as she agreed to keep $20,000 in a savings account at the bank at all times during the term of the loan. This is known as: compensating balance. security deposit. collateral. risk control. ------CORRECT ANSWER---------------compensating balance. A release clause in a mortgage allows: the lender's option to extend. the release of a guarantor from further liability under specified conditions. portions of the security to be released from a mortgage lien when multiple properties are being used to secure the loan. the mortgagor to be released from liability. ------CORRECT ANSWER------- --------portions of the security to be released from a mortgage lien when multiple properties are being used to secure the loan. Mortgages and deeds of trust are considered: real property. personal property. chattels real. estates. ------CORRECT ANSWER---------------personal property. In real estate financing, reference is sometimes made to take out loans. This refers to: net amount after points and prepaid interest are deducted. a blanket encumbrance. a construction loan. long term loan taken out after construction. ------CORRECT ANSWER------ ---------long term loan taken out after construction. In checking trust deed documents in the county recorder's office, you will find that the recorded deed of trust refers to standard clauses contained in a previously recorded deed of trust. This previously recorded trust deed is known as a: prima facie deed of trust. short form deed of trust. master deed of trust. fictitious deed of trust. ------CORRECT ANSWER---------------fictitious deed of trust. The trustor under a deed of trust is the party who: lends the money. receives the note. holds the property in trust. signs the note as maker. ------CORRECT ANSWER---------------signs the note as maker. A real estate financing device that a seller can use to transfer equitable title to a buyer is known as: a land sales contract. a contract of sale. a conditional sales contract. all of the above ------CORRECT ANSWER---------------all of the above In real estate financing, lenders will sometimes find it necessary to refer to nominal rate when granting a loan. This means: that the rate of interest in the final granting of the loan will be greater than the commitment. points will be required as the rate required by the lender would exceed the legal rate of interest. the term used by lenders when the maximum rate of interest allowed by law is obtainable on financing a property. it is the rate of interest specified in the promissory note. ------CORRECT ANSWER---------------it is the rate of interest specified in the promissory note. The primary mortgage market is the market in which lenders make loans directly to the: secondary market. borrowers. FED. FHFB. ------CORRECT ANSWER---------------borrowers Under the FTC Red Flag Rules, which could be considered a warning sign of identity theft? Suspicious account application documents Suspicious personal identifying information, such as a suspicious address Unusual account activity All of the above ------CORRECT ANSWER---------------All of the above Which of the following loans would not be insured by FHA or guaranteed by the VA? Federal bank Insurance company Institutional lenders Private lenders ------CORRECT ANSWER---------------Private lenders Buyer gives seller a purchase money second trust deed and note. Shortly afterward, buyer defaults in payments on the second trust deed. Seller can, in due course, bring court action and obtain against the buyer: an attachment. a deficiency judgment. a reconveyance deed. none of the above ------CORRECT ANSWER---------------none of the above The TILA-RESPA rule created integrated disclosure forms for closed-end mortgage loan transactions by consolidating: four TILA and RESPA disclosures. three RESPA disclosures. two TILA disclosures. one TILA disclosure and three RESPA disclosures. ------CORRECT ANSWER---------------four TILA and RESPA disclosures. Following the consummation of a loan, a lender must keep copies of closing disclosures for: 24 months. 36 months. 48 months. 60 months. ------CORRECT ANSWER---------------60 months. Under TILA-RESPA, which of the following is a triggering event that requires the amount of the periodic payments to be outlined in a table? A balloon payment A foreclosure A loan default A short sale ------CORRECT ANSWER---------------A balloon payment The primary mortgage market is the market in which lenders make mortgage loans directly to: veterans. mortgage bankers. borrowers. the secondary market. ------CORRECT ANSWER---------------borrowers When a lender accepts a deed in lieu of foreclosure, the lender: must also have the power of sale. must take ownership of property free and clear of all liens. must go to court and get deficiency judgment. assumes junior loans. ------CORRECT ANSWER---------------assumes junior loans. A man bought unimproved property and executed a first mortgage for 10 years. He plans to build on the property within 2 years. The lack of which clause in the first mortgage could cause him future concern? Alienation Subrogation Subordination Escrow Closing Notice ------CORRECT ANSWER---------------Loan Estimate A lender receiving a mortgage or deed of trust as security for a promissory note would be given the best protection by the: credit of the buyer. value of the property. increase in the value of money. all of the above ------CORRECT ANSWER---------------value of the property. Any loan payment that is significantly larger than any of the other payments is called a(n): final payment. balloon payment. credit payment. installment payment. ------CORRECT ANSWER---------------balloon payment. Of the following, which is a correct statement concerning a junior mortgage? The holder of a second mortgage may not record a request for notice of default until the holder of the first mortgage has recorded his notice of default. The holder of a junior mortgage would most likely make the payments for the mortgagor on a delinquent first mortgage and start his own legal proceedings. A second mortgage is always classified as purchase money mortgage. The holder of a second mortgage may not bid on his own foreclosure sale. ------CORRECT ANSWER---------------The holder of a junior mortgage would most likely make the payments for the mortgagor on a delinquent first mortgage and start his own legal proceedings. A lender's fee required of a buyer to obtain an FHA loan is called an: accommodation fee. originating fee. acceptance fee. application fee. ------CORRECT ANSWER---------------application fee. A client contacts you to give you a listing. You look at his papers and discover that he is purchasing the property on a contract of sale. The contract contains no acceleration clause and there are no restrictions in the contract of sale prohibiting resale or assignment. One of the following is the most nearly correct statement. Your client could: sell his interest in the property but only after first paying off the existing contract of sale. sell or assign his rights but not his duties without approval of the contract seller. properly give a warranty deed to the property to the purchaser providing the deed recited "subject to the existing contract of sale." properly give a grant deed to the property to the purchaser. ------ CORRECT ANSWER---------------sell or assign his rights but not his duties without approval of the contract seller. If compensation is paid to a short sale negotiator or broker, the compensation: must be disclosed to the seller. should be disclosed to all parties in a written memorandum. must be disclosed to the buyer in writing. should be disclosed to all parties in the purchase agreements,the escrow instructions, and the HUD 1 closing statement. ------CORRECT ANSWER-- -------------should be disclosed to all parties in the purchase agreements,the escrow instructions, and the HUD 1 closing statement. Assume you purchase a piece of property and execute a promissory note. In this situation you are: the holder in due course. the maker of the note. the holder of the note. all of the above. ------CORRECT ANSWER---------------the maker of the note. A loan that may be increased without rewriting the note and mortgage is known as a(n): pledged mortgage. obligatory advanced loan. amortized loan. open end loan. ------CORRECT ANSWER---------------open end loan. Notes are said to be negotiable and non-negotiable. Which of the following best defines a negotiable note? If it is endorsed without recourse it is non-negotiable. An alienation clause in the note would make it non-negotiable. If a note is secured by a mortgage the note is negotiable but the mortgage is non-negotiable. To be negotiable a note must be endorsed by the maker. ------CORRECT ANSWER---------------If a note is secured by a mortgage the note is negotiable but the mortgage is non-negotiable. What is a swing loan? 5:00PM of the 7th calendar day following consummation. ------CORRECT ANSWER---------------midnight of the 3rd business day following consummation. Of the following, which is a correct statement concerning a deed of trust and note? The deed of trust is held by the trustee. The deed of trust is acknowledged by a notary public. The beneficiary holds naked legal title; however, the trustee has the power of sale. The trustor to beneficiary relationship is not a fiduciary relationship but merely that of a borrower and lender. ------CORRECT ANSWER--------------- The trustor to beneficiary relationship is not a fiduciary relationship but merely that of a borrower and lender. A fast rule of thumb way for mortgage companies to figure out the monthly interest payment on loans at 7.2% interest would be: multiply the principal by 0.006. multiply the interest by 0.072. divide the principal by .12, then multiply by 0.072. divide the principal by 12 and multiply by 0.0072. ------CORRECT ANSWER---------------multiply the principal by 0.006. The lender must arrange for delivery of the Closing Disclosure by providing it to the borrower in person or by mailing or emailing it. If it is mailed or emailed, the borrower is considered in receipt of the Closing Disclosure: 3 business days after it is delivered or placed in the mail. 3 days after it is delivered or placed in the mail. upon actual receipt of the Closing Disclosure by the borrower. at the time the lender sends the email or puts the letter into the mail. ------ CORRECT ANSWER---------------3 business days after it is delivered or placed in the mail. There are many clauses that could be placed in promissory notes that would prohibit the borrower from doing certain things. A clause that would prohibit the borrower from paying off the loan before the maturity date is called a: prevention clause. lock-in clause. defeasance clause. release clause. ------CORRECT ANSWER---------------lock-in clause. Liquidation of an obligation most nearly means: annexation. amortization. acceleration. condemnation. ------CORRECT ANSWER---------------amortization. When there is more than one borrower on a promissory note, the lender will include the term: due on sale. power of sale. no grace period. jointly and severely. ------CORRECT ANSWER---------------jointly and severely. A secured real property loan usually consists of: a financing statement and security instrument. the debt and the lien. FHA or PMI insurance. a security agreement and a financing statement. ------CORRECT ANSWER---------------the debt and the lien. Wesley needs $2,000 to close. He holds a $6,000 note secured by a second mortgage on a farm. The bank agrees to lend him the necessary amount if Wesley will put up the note as security. This type of security is known as a: pledge. chattel mortgage. purchase money mortgage. subordination clause. ------CORRECT ANSWER---------------pledge Of the following answers, which best describes a seasoned note? A brand new note with the payments pre-set History of payments on the note An amortized note for a minimum ten-year period All of the above ------CORRECT ANSWER---------------History of payments on the note A subordination clause: is of primary benefit to the lender. would prevent the sale of a property subject to the existing loan unless it were waived by the lender. would be of no value in a second mortgage as it is presently in a subordinate position. is very often used in the purchase of raw land by a builder. ------CORRECT ANSWER---------------is very often used in the purchase of raw land by a builder. The maximum FHA and VA loan amounts: may not be changed. vary in different regions of the country. are the same everywhere. depend on the buyer. ------CORRECT ANSWER---------------vary in different regions of the country. In a promissory note and mortgage signed by two or more co-borrowers, when one of the co-borrowers defaults, what is the liability? Personal and corporate liability All are together liable as individual borrowers Each is jointly and severally liable Each is individually and severally liable ------CORRECT ANSWER------------ ---Each is jointly and severally liable A lender may charge the borrower more than the amount disclosed on the Loan Estimate so long as the total sum of the charges added together does not exceed the sum of all such charges disclosed on the Loan Estimate by more than: 10%. 15%. 20%. 25%. ------CORRECT ANSWER---------------10%. The loan which allows the terms of the interest rate to increase or decrease over time is called a(n): secured loan. interim loan. fixed rate loan. variable interest rate loan. ------CORRECT ANSWER---------------variable interest rate loan. Mr. Dunn bought a house. The seller took back a second trust deed and note. Mr. Kirk later buys the property subject to the loan. If Mr. Kirk immediately defaults, the seller: may get a deficiency judgment against Mr. Dunn. may get a deficiency judgment against Mr. Kirk. may get a deficiency judgment against Mr. Dunn and Mr. Kirk. cannot get a deficiency judgment because it was a purchase money loan. - -----CORRECT ANSWER---------------cannot get a deficiency judgment because it was a purchase money loan. Anyone who sells a promissory note for less than its value is: leveraging an investment. liquidating a piece of real property. discounting a note. subordinating a debt. ------CORRECT ANSWER---------------discounting a note. A borrower was notified that the payment on his FHA loan was increased $4.00 per month. This was probably due to: an increase in the interest rate. an increase in the tax rate. an increase in the insurance rate. an increase in impounds for either taxes or insurance. ------CORRECT ANSWER---------------an increase in impounds for either taxes or insurance. The terms blank, restricted, and qualified refer to: contracts. endorsements. leases. deeds. ------CORRECT ANSWER---------------endorsements. Which of the following statements is incorrect? A reconveyance deed is signed by the trustee. A trustee's deed is signed by the trustee. A deed of trust is signed by the trustee. A note secured by a deed of trust is signed by the trustor. ------CORRECT ANSWER---------------A deed of trust is signed by the trustee. A borrower on a new loan is required to advance $412.00 for an impound account. He would do so for the benefit of: the trustor only. the trustor and the beneficiary. Fannie Mae. the beneficiary, primarily. ------CORRECT ANSWER---------------the beneficiary, primarily. The Closing Disclosure generally contains: an estimate of the terms and costs of a loan transaction. the actual terms and costs of a loan transaction. the estimate of costs for selling a home. the actual costs of selling a home. ------CORRECT ANSWER--------------- the actual terms and costs of a loan transaction. What is a junior loan? A loan recorded before a first deed of trust or mortgage A loan recorded after a first deed of trust or mortgage A loan made by a mortgage broker A loan made by a minor ------CORRECT ANSWER---------------A loan recorded after a first deed of trust or mortgage A check is a: negotiable instrument. promissory note. holder in due course. security for a loan. ------CORRECT ANSWER---------------negotiable instrument. Beginning October 3, 2015, with the exception of charging ____________, lenders may not charge a borrower any fee in connection with the borrower's application for a loan until the borrower has received the Loan Estimate and has indicated intent to proceed with the transaction. credit report fees application fees appraisal fees underwriting fees ------CORRECT ANSWER---------------credit report fees A man sold his property for $25,000 and took back a promissory note for $9,000 sucured by a first deed of trust. He is now in need of some cash and wants to use the deed of trust as security for the loan with the bank. This type of loan transaction would be known as: pledge agreement. mortgage. reconveyance. release of payment. ------CORRECT ANSWER---------------pledge agreement. When money is said to be tight, which of the following would provide the best form of investment? Real property security instruments Government issued bonds Unsecured promissory notes Savings account at your local bank ------CORRECT ANSWER--------------- Real property security instruments Disregarding down payments, which of the following loans requires the lowest escrow charges? FHA VA Cal-Vet Conventional ------CORRECT ANSWER---------------Cal-Vet You have a customer that is interested in purchasing a home using his G.I. benefits. You have located a most desirable home for which the owner is asking $120,000. It has been appraised by the DVA for $118,000. If the customer wants to purchase the home and use his G.I. benefits you should advise him that: he cannot buy this home since the appraised value is less. he can pay more than $118,000 and use his G.I. benefits but must pay cash for the excess above the $118,000. you will reduce your commission in half and have the owner reduce his price to $119,000. none of the above ------CORRECT ANSWER---------------he can pay more than $118,000 and use his G.I. benefits but must pay cash for the excess above the $118,000. Seller takes back a purchase money first trust deed on a home. The buyer sometime later has to take out a second trust deed with a bank and later defaults on both loans. Which of the following is a true statement? Seller can get a deficiency judgment Bank can get a deficiency judgment No one can get a deficiency judgment on a trust deed Both (a) and (b) are correct ------CORRECT ANSWER---------------Bank can get a deficiency judgment Subprime loans: do not qualify for sale to Fannie Mae or Freddie Mac. are guaranteed by GNMA. will not be carried by a conventional lender. have low interest rates. ------CORRECT ANSWER---------------do not qualify for sale to Fannie Mae or Freddie Mac. It is said real estate has its own language. All of the following terms are closely related except: alienation clause. hypothecation. third deed of trust. tenants in common. ------CORRECT ANSWER---------------tenants in common. Ms. Brown takes a second trust deed on Mr. Black's home. The face value of this note is $5,000. Ms. Brown sells the note to her friend at a discounted price of $3,000. Mr. Black has not made any payments on the note and lets the second trust deed go into default. Ms. Brown's friend who now holds the note should sue for: $1,500. $5,000. $8,500. $3,500. ------CORRECT ANSWER---------------$5,000. Another name for a wrap-around mortgage is: swing loan. shared appreciation loan. reverse annuity loan. all inclusive trust deed. ------CORRECT ANSWER---------------all inclusive trust deed. A long term loan to be issued by one lender upon completion of the interim construction financing by another lender is known as a: discount loan. redemption loan. takeout loan. renewal loan. ------CORRECT ANSWER---------------takeout loan. until the proceeds of the loan have been made available to the borrower. until the proceeds of the loan have been deposited in escrow. all of the above are requirements of Article 7 ------CORRECT ANSWER---- -----------all of the above are requirements of Article 7 A purchaser under a sale-leaseback transaction would be least interested in: the location of the property. the seller's depreciated book value. a general well-constructed building. the credit of the prospective seller. ------CORRECT ANSWER--------------- the seller's depreciated book value. Which of the following documents is not a negotiable instrument? Check Draft Mortgage Promissory note ------CORRECT ANSWER---------------Mortgage The Truth in Lending Act applies to all real estate loans except: personal loans. two-unit income property to be owner occupied within a year. business loans. family loans. ------CORRECT ANSWER---------------business loans. Who pays the FHA discount points? Either the buyer or seller Only the buyer Only the seller Lender ------CORRECT ANSWER---------------Either the buyer or seller A warehouse line is: a large building where mortgages are kept. a revolving line of credit extended to a mortgage company from a warehouse lender to make loans to borrowers. mortgage syndication. an industrial strip mall comprised of warehouse buildings. ------CORRECT ANSWER---------------a revolving line of credit extended to a mortgage company from a warehouse lender to make loans to borrowers. An extraordinary event beyond the control of any interested party or other unexpected event specific to the borrower or transaction is an example of a: cumulative tolerance. zero tolerance event. borrower's intent to proceed. changed circumstance. ------CORRECT ANSWER---------------changed circumstance. In what market do investment banks and government sponsored enterprises buy pools of loans from loan originators? Capital market Money market Secondary mortgage market Primary mortgage market ------CORRECT ANSWER---------------Secondary mortgage market The loan-to-value ratio indicates which of the following relationships? Assessed value to the market value of the property Loan value to the insured value Loan value to the appraised value Loan value to the sales price ------CORRECT ANSWER---------------Loan value to the appraised value There are many differences between mortgages and deeds of trust. One of the main difference is the: rights of parties in possession as to renting the property. the redemption period. amounts of money that can be borrowed. number of years money can be borrowed. ------CORRECT ANSWER-------- -------the redemption period. A primary source of funds for residential mortgage financing is: Federal Home Loan Bank. Federal Savings and Loan Corporation. savings banks. Federal Housing Administration. ------CORRECT ANSWER--------------- savings banks. A clause in a security instrument that declares the total unpaid balance due and payable upon default is called: a forfeiture clause. an escalator clause. an elevator clause. none of the above. ------CORRECT ANSWER---------------none of the above. Under Article 5, a non-exempt real estate broker who engages in selling promissory notes secured by a trust deed must provide the buyer with a(n): deposit receipt. agreement of sale. appraisal. exclusive authorization and right to sell agreement. ------CORRECT ANSWER---------------appraisal.