Sample Quiz Questions with Solution - Real Estate Finance | RE 611, Quizzes of Real Estate Management

Download Sample Quiz Questions with Solution - Real Estate Finance | RE 611 and more Quizzes Real Estate Management in PDF only on Docsity! RE 611 / Fin 611 – Real Estate Finance Legal Considerations & Mortgage Markets Overview Sample Quiz Questions − Solutions Dr. Stanley D. Longhofer ______ 1. TRUE or False: Technically speaking a “mortgage” is not a loan, but rather the pledge of real property as collateral for a loan. ______ 2. TRUE or False: Financial intermediaries are middlemen that generally reduce the cost of transferring funds between savers and investors. ______ 3. True or FALSE: Zach recently purchased a property “subject to” an existing mortgage. As a result, he is now personally liable for repaying the loan. ______ 4. The “tilt effect” refers to which of the following issues? A. THE IMPACT OF EXPECTED INFLATION ON THE VALUE OF THE MONTHLY PAYMENTS ON FIXED RATE MORTGAGES. B. The impact of unexpected inflation on the value of the monthly payments on fixed rate mortgages. C. The impact of caps and floors on adjustable rate mortgages. D. The impact of payment caps on adjustable rate mortgages. E. None of the above. ______ 5. Which of the following are problems with direct investment as a means of transferring capital from savers (those with excess funds) to investors (those who need funds)? More than one answer may be correct; write down the letter of all correct answers. A. IT CAN BE HARD FOR SA VERS AND INVESTORS TO FIND ONE ANOTHER. B. IT CAN BE COSTLY FOR SAVERS TO DETERMINE THE RISKINESS OF THE PROPOSED INVESTMENT. C. The fees charged by the middleman can be very costly. D. MANY DIFFERENT SAVERS MAY NEED TO BE BROUGHT TOGETHER TO FUND A LARGE INVESTMENT OPPORTUNITY. E. The rate of return required by savers may be too low for investors to pay. ______ 6. __________ do not generally fund mortgage loans. Instead they match up borrowers and lenders. A. Fannie Mae and Freddie Mac B. MORTGAGE BROKERS C. Mortgage banks D. Commercial banks E. Insurance companies 2 ______ 7. True or FALSE: Financial intermediaries are middlemen that increase the cost of transferring funds between savers and investors. ______ 8. What is the primary difference between a mortgage bank and a mortgage broker? A. Mortgage banks fund loans using deposits, whereas mortgage brokers fund loans using warehouse loans. B. Mortgage banks hold the loans they originate in their portfolios, while mortgage brokers sell the loans on the secondary market. C. MORTGAGE BANKS FUND NEW LOANS, WHEREAS MORTGAGE BROKERS SIMPLY MATCH UP BORROWERS AND LENDERS. D. Mortgage banks charge lower fees on average than mortgage brokers. E. All of the above. ______ 9. Which of the following is an agency of the federal government? More than one answer may be correct; write down the letters of all correct answers. A. Fannie Mae B. Freddie Mac C. Sallie Mae D. GINNIE MAE E. Bank of America ______ 10. __________ are non-profit, cooperative depository institutions. A. CREDIT UNIONS B. Commercial banks C. Mortgage banks D. Thrifts E. All of the above ______ 11. Adam recently entered into a contract to purchase some real estate from Calvin using a land contract. This means that A. Calvin provided Adam a purchase money mortgage to buy the property. B. Adam purchased only the land and not the building on the land. C. Adam paid cash for the real estate. D. CALVIN STILL RETAINS TITLE TO THE REAL ESTATE, WHILE ADAM HAS AN EQUITABLE INTEREST IN THE PROPERTY. E. Calvin has lent Adam the down payment required for his first mortgage loan. ______ 12. True or FALSE: The lender only has a right to foreclose on the mortgaged property when the borrower defaults on a mortgage; if the property is worth less than the amount owed, the lender has no further claim on the borrower.