Download Champions Real Estate Finance Exam 2 (2025) || Questions & Answers (Graded A+) and more Exams Real Estate Management in PDF only on Docsity!
Champions Real Estate Finance Exam 2
(2025) || Questions & Answers (Graded A+)
Disintermediation - ANSWER - the act of moving funds from one investment arena to another REMIC - ANSWER - holds mortgages in trust for the benefit of investors Conforming Loan - ANSWER - Adheres to Fannie Mae and Freddie Mac requirement for purchase of a mortgage Yield - ANSWER - return on an investment Redlining - ANSWER - The practice of refusing to provide financing in a particular area because of location SML - ANSWER - Responsible for the chartering, regulation and supervision of Texas thrift industry TDHCA - ANSWER - Responsible for the regulation of the Texas manufactured housing industry SAFE Act - ANSWER - Designed to enhance consumer protection and reduce fraud RMLO - ANSWER - The industry term for residential loan originators, as mandated by the SAFE act Monetary policy - ANSWER - policy that deals with interest rates and the supply of money in the US economy Fiscal Policy - ANSWER - Relates to federal government Open-Market Operations - ANSWER - Buying or selling government securities by the federal reserve Discount Rate - ANSWER - Set by the board of directors of the Federal Reserve Banks subject to approval by the Board of Governors Loan Processing - ANSWER - The process of collecting information about a borrower in order to build a loan file that will be used to make an underwriting decisions Underwriting - ANSWER - The process of evaluating a borrowers loan application to determine the risk involved for the lender
Funding - ANSWER - The process of transferring funds to a title or escrow company for disbursement Congress created the Federal Housing Administration in - ANSWER - 1934 In order to qualify for exemption from capital gains, the property must have been the primary residence for two of the previous ___ years - ANSWER - 5 years A loan with no discount points is known as a - ANSWER - Par loan What is Fiat money - ANSWER - Currency that is not backed up by any precious metals At the treasury level, funds can be raised to pay for government spending by increasing borrowing and _____ - ANSWER - Raising Taxes The ________ is the interest rate a reserve bank charges eligible financial to borrow funds on a short term basis - ANSWER - Discount rate The Fed uses three monterary policy tools to influence the cost and availability of credit: Open Market operations, the discount rate and ____ - ANSWER - Reserve Requirements Through which avenue does the US Treasury promote economic growth? - ANSWER - Policies that support job creation Which of the following is NOT a function of the Department of the Treasury - ANSWER - Campaign finance reform According to the Taxpayer Bill of Rights, taxpayers have the right to: - ANSWER - Pay no more than the correct amount of tax, be informed, privacy When was HARP introduced? - ANSWER - 2009 Which refinancing option does HARP offer? - ANSWER - Change from an adjustable to a fixed-rate mortgage, lower interest rates, shorter term loans The Dodd-Frank Wall Street Reform and Consumer Protection Act, signed into law in 2010 established the - ANSWER - Consumer Financial Protection Bureau Real Estate transactions regulated by the Office of Consumer Credit Commissioner include which of the following? - ANSWER - Home equity loans, Home improvement loans and secondary mortgages... all of these The Community Reinvestment Act, enacted in _____ ensures that banks serve the needs of the community in which they were chartered - ANSWER - 1977
mortgage brokers - ANSWER - typically specialize as middlemen borrowers and lenders Correspondent lender - ANSWER - someone who processes underwrites, close and funds their own files in their names and then sells the loans to the other mortgage lenders credit union - ANSWER - member-owned depository institions, are not for-profit organizations that exist to serve their members REIT - ANSWER - investment vehicle created by congress in 1960 Points - ANSWER - percentages based on the amount of the loan Conforming loan - ANSWER - conventional loans that conform to FNMA/FHLMC standards Ballon Loan - ANSWER - partially amortized loan with a substantially larger final payment blanket mortgage - ANSWER - a loan which covers more than on piece of property churning - ANSWER - excessive selling/lending activity for the purpose of generating fees and commission Pier Diem interest charged to borrower from the day of closing through to the end of the month is called.....___ - ANSWER - Interium interest A fixed rate-mortgage remains fixed for ________. - ANSWER - Entire term of loan Disadvantages of adjustable rate mortgages include possibly increased monthly payments, _________, borrower confusion, and higher long term costs. - ANSWER - The inability to refinance early The ______ loan was developed by HUD for the rehabilitation and repair of single- family properties - ANSWER - 203K The Serviceman's Readjustment Act, signed into law in ________ is more commonly known as the GI Bill of Rights - ANSWER - 1944 Major loan reforms spearheaded by the FHA have included _________. - ANSWER - Partially amortized loans, high interest rates, no limits on borrower qualification or none of these are correct Entitlement - ANSWER - The size of loan a veteran may receive, determined by the term of services
Back Ratio - ANSWER - The ratio of the borrower's total recurring monthly debts Native American Direct Loan - ANSWER - Direct loans for construction or improvement on Federal Trust Land. Annual Premium - ANSWER - Insurance cost based on the loan-to-value ratio Servicemen's Readjustment Act - ANSWER - Commonly known as the GI Bill of Rights Which of the following is NOT reviewed by loan underwriters to determine creditworthiness? - ANSWER - Social Media platforms __________ inquires are known as neutral inquires they are not rated as either positive or negative on a credit report. - ANSWER - Periodic review, Pre-approval, Consumer initiated..All of these The borrower is asked to provide their full name, _________, social security number, and present address in Part III of the Uniform Residential Loan Application - ANSWER - Martial Status _________ credit cards typically have higher interest rates than _________ cards - ANSWER - Secured, Unsecured For a property to have value, it must have four characteristics, including demand, scarcity, ________ and transferability - ANSWER - utility Power of Sale - ANSWER - Also known as a statutory foreclosure Recasting - ANSWER - The re-amortizing of a mortgage Default - ANSWER - Breach of non performance of the terms of a note or covenant of a mortgage Deficiency judgement - ANSWER - The unpaid balance of a foreclosed mortgage, payable by court order Default can lead to a number of negative consequences for the defaulting party, including ______ - ANSWER - damage to credit score, default-related fees, foreclosure, all of these A(n) _______ cannot be accepted from borrowers who can financially afford their mortgage payments - ANSWER - Deed in Lieu
Sale of bonds - ANSWER - money that mortgage companies use to make loans, which is considered a business transaction, not a saving account deposit procedures Soverighty of the soil - ANSWER - government is the original owner of all land Patent - ANSWER - The original conveyance of land by the sovereign is usually done with a document Abstract of title - ANSWER - complete history of the title of piece of property that includes deeds, easements, liens, foreclosures, wills, marriages, deaths, life estates, fee simple estates Chain in title - ANSWER - history or list of all recorded owners all the way back to the soverignty of the soil When was the FHA Created? - ANSWER - 1934 Who funds the FHA? - ANSWER - The FHA funds itself How long is the life span of a $20 bill? - ANSWER - Less than 10 years Who provides VA loans? - ANSWER - Private lenders The Single Family Housing Direct Home Loan is also known as - ANSWER - Section 502 Direct Loan Program The Four C's - ANSWER - character, capacity, capital, collateral Mortgage Banker - ANSWER - Entities which provide their own funds for the purpose of providing mortgage financing, as opposed to commercial banks/savings associations Who is the federal banking system of the United States - ANSWER - The Federal Reserve What 2 are major mortgages in the secondary market system or which 2? - ANSWER - Fannie Mae and Freddie Mac Seller contributions to the buyer's closing costs are limited to _____% of the sales price
- ANSWER - 6% __________ occurs when time is an excess of money supply in the market. - ANSWER
- Money Inflation The Federal Deposit Insurance Corp (FDIC) insurance limit for deposits is __________.
- ANSWER - $250,
____________ charters, regulates and supervises all national banks and federal savings associations - ANSWER - Office of the comptroller of the currency (OCC) Which on of these programs is not administered by HUD? - ANSWER - Consumer Financial Protection Bureau (CFPB) Which of the following transactions is exempt from Real Estate Settlement Procedures Act (RESPA)? - ANSWER - Temporary loans such as construction loans Under ____________ the use of certain terms in an advertisement triggers the need for full disclosure of tending terms. - ANSWER - Truth in Lending Act (TILA) At least ______ of CDBG funds must be used for activities that benefit low and moderate income persons. - ANSWER - 70% Which of the following housing objectives does Fannie Mae address? - ANSWER - Regional imbalances of available mortgage credit, origination of mortgages for sale, standardization of mortgage loans, all of these The Agricultural Credit Act, which established Farmer Mac to facilitate the creation of a secondary market for agricultural mortgage products was pass in _______ by congress
- ANSWER - 1987 A _______ is a return on an investment - ANSWER - yield What percentage of its net income does an Equity Estate Real Estate Investment Trust (REIT) distribute to investors in the form of dividends? - ANSWER - 95-100% What type of property might an Equity Estate REIT purchase? - ANSWER - Office buildings, apartments, self storage facilities, all of these A __________ is a debt instrument. - ANSWER - Corporate bond Under a(n) ________ when the final payment is made to the seller, title transfers to the buyer. - ANSWER - contract for deed A standard mortgage form is a two-party instrument. A deed of trust is a ________ instrument. - ANSWER - A three-party instrument Pre-payment penalties can be found in more than two-thirds of _______. - ANSWER - Sub-prime mortgages A (n) __________ is a partially-amortized loan with a final payment that is substantially larger than the previous payments. - ANSWER - Balloon note
Three theories of ownership of mortgaged properties exist throughout the United States:___________ - ANSWER - title theory, lien theory, intermediary theory Services you cannot shop for: ____________ - ANSWER - government funding fee (such as VA or USDA guarantee fee, or any other fee paid to a government entity as part of a governmental loan program.
