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Finance - Review Exam (Bob Brooks)
Questions and Answers Already Passed
Discount Points are figured on the:
a. Selling Price
b. Loan Balance
c. Salary of buyer
d. None of the above. ✔✔b. Loan Balance
Which of the following is shown on an estoppel certificate?
a. Unpaid balance and interest rate on mortgage.
b. Time of foreclosure
c. Novation of the seller.
d. Any defects in the title. ✔✔a. Unpaid balance and interest rate on mortgage.
Insurance on an FHA loan is designed to protect the:
a. Government
b. Lender
c. Borrower
d. Seller ✔✔b. Lender
If given the choice, it's best if the Buyer assumes an existing loan:
a. Assumption of
b. Subject to
c. Buy Down
d. None of the above. ✔✔b. Subject to
Two discount points charged on an FHA loan of $50,000 would amount to:
a. $
b. $
c. $1,
d. $2,000 ✔✔c. $1,
a. 5%
b. 10%
c. 20%
d. 25% ✔✔c. 20%
A buyer could have a deficiency judgment entered against him when he:
a. Purchases with an "assumption of" the mortgage
b. Buys "subject to" a mortgage
c. Pays off the loan.
d. All of the above. ✔✔a. Purchases with an "assumption of" the mortgage
The Smiths own their house free and clear of all liens and offer it for sale at $110,000. The buyers, the Byrds, give a deposit of $3,000 and agree to make a down payment of $37,000. The Smiths agree to loan the Byrds $70,000, which will be amortized for 30 years at 12% interest. This type of mortgage would be:
a. Purchase money mortgage
b. Second mortgage.
c. Term loan.
d. Straight loan. ✔✔a. Purchase money mortgage
Conventional loans must be insured by PMI insurance if the down payment is less than:
a. 5%
b. 10%
c. 15%
d. 20% ✔✔d. 20%
A term or straight loan provides for:
a. Principal and interest payments monthly.
b. Amortized payments.
c. P, I, T and I payments.
d. Interest payments only until maturity of loan ✔✔d. Interest payments only until maturity of loan
b. The last payment is larger than previous payments.
c. The last payment is principal only.
d. Only interest is paid until the last payment. ✔✔b. The last payment is larger than previous
payments.
A construction loan is considered to be:
a. A Take Out Loan.
b. A Low Risk Loan.
c. An Interim Loan.
d. A Secondary Loan. ✔✔c. An Interim Loan.
Failure to meet an obligation when due is as:
a. Duress.
b. Deficiency.
c. Default.
d. Defeasance. ✔✔c. Default.
The borrower has the right to redeem the property after it has been sold to another at the sheriff's sale. This is called the:
a. Redemption period.
b. Equitable Redemption.
c. Statutory Redemption.
d. Equity Redemption. ✔✔c. Statutory Redemption.
Foreclosure where there is no court action is an example of:
a. Confession of judgment.
b. Executory process.
c. Judgment.
d. Ordinary. ✔✔b. Executory process.
The proceeding where a property must be appraised and should sell for 2/3 of the appraised value is known as:
If a lender holding a note for $58,000 sold it to a second lender for $50,000, his action would be known as:
a. Refinancing
b. Discounting
c. Depreciating
d. Hypothecating ✔✔b. Discounting
Together Fannie Mae, Ginnie Mae, and Freddie Mac:
a. Securer loans originated by savings and loan associations.
b. Regulate the low cost housing market.
c. Provide a place for primary lenders to sell loans.
d. Provide mortgage insurance for primary lenders. ✔✔c. Provide a place for primary lenders to sell loans.
The Federal National Mortgage Association can do ALL but which one of the following:
a. Purchase conventional loans
b. Sell mortgages to institutions.
c. Buy FHA-VA loans
d. Originate federal loans. ✔✔d. Originate federal loans.
The primary function of Fannie Mae is to:
a. Provide a source of financial backing for FHA and VA loans.
b. Facilitate the origination of construction loans.
c. Insure that savings and loan associations retain a certain percentage of their demand deposits as financial reserves.
d. Facilitate the flow of money and credit to primary lenders. ✔✔d. Facilitate the flow of money
and credit to primary lenders.
The clause in a mortgage which benefits the lender if the buyer defaults is the:
a. Redemption
b. Acceleration
c. Escalation
a. Prepayment clause
b. Escalation clause
c. Right to sell
d. Alienation clause ✔✔d. Alienation clause
