Sources of Funds and Loans: Banks, Credit Unions, and REITs, Exams of Nursing

Download Sources of Funds and Loans: Banks, Credit Unions, and REITs and more Exams Nursing in PDF only on Docsity! Section 5 Sources of Funds(Latest Exam 2024) The Activities of Commercial Banks - correct answers✅Commercial banks are part of a classification of lenders known as institutional lenders. The primary source of funds for commercial banks is demand deposits, or checking accounts. Commercial banks offer real estate- related loans for several different purposes. Construction loans are a type of interim financing. Home improvement loans must be specifically for additions or improvements, but home equity loans may be used for almost any purpose. Some commercial banks offer mobile home loans, and most offer traditional mortgage loans. Other Revenue - correct answers✅-IRA -Trust account -Bond Demand Deposit - correct answers✅-Savings account -Checking account Which of the following statements are true about commercial banks as a source of mortgage funds? - correct answers✅-Commercial banks provide many real estate-related loans. -Commercial banks rely mostly on demand deposits for their supply of funds. Section 5 Sources of Funds(Latest Exam 2024) -Some commercial banks provide loans for manufactured homes. The loan term often depends on how permanently the manufactured home is attached to the property. -Construction loans are a type of interim financing provided by commercial banks. -Commercial banks provide home equity loans. Which of the statements are true about the role life insurance companies play in real estate financing? - correct answers✅-Life insurance companies prefer to finance much larger projects, such as shopping malls. -Life insurance companies are solid, because they generate billions annually. -Life insurance companies prefer to finance large commercial projects such as shopping malls. -Participation financing is a way for life insurance companies to have partial ownership in large projects. -Life insurance companies often purchase blocks of single-family mortgages from the secondary market. Which four of these are areas in which life insurance companies would likely participate in real estate funding? - correct answers✅-Shopping centers -High-rise buildings -Apartment complexes Section 5 Sources of Funds(Latest Exam 2024) Which of the following statements are true regarding the SAFE Act? - correct answers✅-The SAFE Act was signed into law in 2008. -The SAFE Act does not requires all mortgage bankers and brokers to have a certified safe on site. -Only those who originate loans are required to register. -The SAFE Act provides more consumer protection. A new apartment building is going up downtown. The owner secured interim financing for the job. Which of these loan types is interim financing? - correct answers✅Construction loan Who originates their own loans? - correct answers✅Mortgage bankers What does NCUA stand for? - correct answers✅National Credit Union Administration What impact did the authorization of the Credit Union Membership Access Act have on credit unions? - correct answers✅Removed membership restriction of union worker requirement. Section 5 Sources of Funds(Latest Exam 2024) Why are life insurance companies less concerned with liquidity than long term security of an investment? - correct answers✅They prefer financing larger projects, which inherently have a more long-term security. Life insurance companies sometimes like to insure their investment in commercial projects by insisting on an equity position. This is known as ______ financing. - correct answers✅Participation Which banking-related entity shares similarities with the purpose and function of the NCUA? - correct answers✅FDIC Who or what entity directs the activities of credit unions? - correct answers✅A board of directors Borrowing against retirement funds, whether pensions or other retirement accounts, has both benefits and drawbacks. Kathy plans to borrow against her retirement fund to buy a house. Which of the these statements are true? - correct answers✅-Kathy's lender probably won't count this loan in the debt-to-income ratio. -If Kathy doesn't pay the loan back, it'll probably be classified as an early distribution of retirement funds, resulting in a very sad Kathy when her income taxes are due. Section 5 Sources of Funds(Latest Exam 2024) -Kathy must repay the loan within 5 years. -Kathy should keep in mind that until the borrowed money is repaid, the potential growth of her retirement account will be reduced. Pensions and trusts have been investing in mortgage- backed securities for several years, but they're making a move toward more activity on the primary mortgage market, too. The mortgage or hybrid real estate investment trust (REIT) is an increasingly popular option. Which of the following statements describes the hybrid REIT? - correct answers✅-Mortgage REITs earn income in part from the interest earned on mortgage loans made. -A mortgage REIT is similar to a mutual fund, but it invests in properties instead of stocks and bonds. Introducing Real Estate Investment Trusts (REIT) - correct answers✅The Real Estate Investment Trust Act of 1960 gave us REITs, which were designed to give investors opportunities to invest in real estate while maintaining some of the benefits of other investments, such as mutual funds. One of the major advantages of REITs is the single tax, imposed at the beneficiary level. REITs are sold just like stock on the open market. Let's take a look now at the two primary types of REITs: equity and mortgage REITs, and their kissing cousin, the hybrid REIT. Section 5 Sources of Funds(Latest Exam 2024) Municipal Bonds - correct answers✅-Revenue -Zero coupon -Industrial development Other Bonds - correct answers✅-Secured -Coupon -Registered -General obligation Corporate bonds - correct answers✅-Coupon -Registered -Debenture The two primary bond types are municipal and corporate. Investors may use bonds in real estate financing: - correct answers✅-As collateral for a loan -By issuing bonds, through an investment company, in order to gain cash for an investment The nature of bonds - correct answers✅-Corporate bonds are credit instruments used to raise funds. -Municipal bonds are used to pay for community improvements Section 5 Sources of Funds(Latest Exam 2024) -Bonds issued against a company's general assets are called debentures. -After bonds are sold, their value goes up and down with the market. -Mortgage revenue bonds are a variety of industrial development bond. According to the NAR, which of the following statements are true regarding foreign investments in U.S. real estate? - correct answers✅-Foreign buyers purchased $153 billion in property in the U.S. between April 2016 and March 2017. -Chinese investors were the largest investors in U.S. real estate in 2017. -Fifty percent of foreign real estate sales in 2017 were in just five states. -Nearly 4% of all home sales in the U.S. in 2017 were to foreign buyers Foreign lenders may be U.S. banks with international offices, or foreign banks with U.S. offices. The NAR found that the number of international banks that lend money to foreigners in the U.S. is small. Which three of these countries were mentioned in the 2016 report that's in your resources? - correct answers✅-China -The UK Section 5 Sources of Funds(Latest Exam 2024) -Canada Mutual Savings Banks Limitations - correct answers✅- Limitations are set by the bank's charter. -Limitations vary from state to state. Which of the following statements is true about where mutual savings banks conduct business? - correct answers✅They prefer to keep their business nearby, so they can monitor loans more efficiently. How much of a mutual savings bank's assets come from savings accounts? - correct answers✅More than 70% Memoryjet, Inc has developed a new technology for high- volume jump drives. In order to manufacture their new devices they will need to gear up a new production line, which will cost about $85 million. What kind of bond instrument could they use to help secure the funds they need for their new line? - correct answers✅Corporate bond Mutual savings banks were created to serve ______ during the mid-19th century. - correct answers✅Workers Section 5 Sources of Funds(Latest Exam 2024) Which type of real estate investment trust involves both residential and commercial properties? - correct answers✅Mortgage REIT More than 70% of the assets of mutual savings banks are derived from ______. - correct answers✅Savings accounts According to the National Association of REALTORS®, the majority of foreign investors in U.S. real estate are ______. - correct answers✅Chinese Which type of real estate investment trust derives a portion of its income from interest dividends? - correct answers✅Mortgage REIT There are three types of international buyers: those who have work visas and are looking for a home to purchase while they're in the U.S., those who are looking for a second home in the U.S., and those who are looking for ______. - correct answers✅A home to purchase as an investment Which type of bond is used to pay for community improvements? - correct answers✅Municipal bonds Section 5 Sources of Funds(Latest Exam 2024) Joe decided to borrow funds from his retirement account to fund the down payment on his new house. It's now two years later and he lost his job. What is true about his pension plan? - correct answers✅The loan must be repaid immediately. Which of the following represents a potential concern when borrowing funds from a pension or retirement plan? - correct answers✅Borrowing without consulting a financial expert can result in unintended consequences, such as income tax liability and loss of retirement income. An industrial development bond is a variety of _____ bond. - correct answers✅Municipal Which of the statements are true about the seller as the lender? - correct answers✅-Sellers who agree to carry part of a loan for a buyer should understand the risks involved. -Sellers have the option to go to a bank and get a loan for a buyer, or to provide a loan to them directly. -One option for seller financing is a contract-for-deed. Based on current laws, a certain amount of money can be gifted tax-free every year from one individual to another. Section 5 Sources of Funds(Latest Exam 2024) So it's possible that a married couple could receive up to __________ ($15,000 per child per parent) to secure a real estate transaction. - correct answers✅$120,000 Current law states an individual can gift up to $15,000 annually to another individual. So a married couple could receive up to $120,000 from their combined parents. Private Lender - correct answers✅-The seller -A family member Private loan companies take on substantial risk when they issue a loan to a borrower who's unable to secure financing elsewhere. Which are ways they insulate themselves from that risk? - correct answers✅-They may charge up to the maximum allowable interest for the loan. -They may put a lien on the property for which the loan is being taken. -They may require collateral to secure the loan. -They may charge higher loan fees. Where Do You Find a Private Loan Company? - correct answers✅-There are nationwide private loan companies. -There are nationwide, regional, and local loan companies.