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Real Estate Finance Exam Questions and Answers, Quizzes of Real Estate Management

A comprehensive set of questions and answers related to real estate finance, covering topics such as mortgage origination, underwriting, government agencies involved in housing, and key concepts in real estate finance. It is a valuable resource for students studying real estate finance, offering insights into the intricacies of the industry and providing a foundation for understanding the principles and practices of real estate finance.

Typology: Quizzes

2024/2025

Available from 02/19/2025

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REAL ESTATE FINANCE - COURSE EXAM -
CHAMPION SCHOOL OF RE TEXAS EXAM
130 QUESTIONS WITH DETAILED
VERIFIED ANSWERS 100% CORRECT
ALREADY GRADED A+
"___________, created November 9, 1965, to create strong, sustainable, inclusive communities and
qualify affordable homes.
pg.37 - CORRECT ANSWER=> Department of Housing and Urban Development (HUD),"
"Created 1934, administered by HUD, the ___________ provides mortgage insurance on loans on single-
family and multifamily homes, including manufactured homes and hospitals.
pg.37 - CORRECT ANSWER=> Federal Housing Administration (FHA)"
"___________ is the largest insurer of mortgages in the world.
pg.37 - CORRECT ANSWER=> Federal Housing Administration (FHA)"
"The primary programs administered by HUD include (3 types):
pg.37 - CORRECT ANSWER=> 1. Rental assistance in the form of Section 8 certificated or vouchers for
low-income households.
2. Public or subsidized housing for low-income individuals and families.
3. Ginnie Mae, a wholly-owned federal corporation within HUD."
"Within HUD, ___________ in the form of Section 8 certificated or vouchers for low-income households.
pg.37 - CORRECT ANSWER=> rental assistance"
"Within HUD, ___________ housing for low-income individuals and families.
pg.37 - CORRECT ANSWER=> public or subsidized"
"Within HUD, ___________, a wholly-owned federal corporation within HUD.
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REAL ESTATE FINANCE - COURSE EXAM -

CHAMPION SCHOOL OF RE TEXAS EXAM

130 QUESTIONS WITH DETAILED

VERIFIED ANSWERS 100% CORRECT

ALREADY GRADED A+

"___________, created November 9, 1965, to create strong, sustainable, inclusive communities and qualify affordable homes.

pg.37 - CORRECT ANSWER=> Department of Housing and Urban Development (HUD),"

"Created 1934, administered by HUD, the ___________ provides mortgage insurance on loans on single- family and multifamily homes, including manufactured homes and hospitals.

pg.37 - CORRECT ANSWER=> Federal Housing Administration (FHA)"

"___________ is the largest insurer of mortgages in the world.

pg.37 - CORRECT ANSWER=> Federal Housing Administration (FHA)"

"The primary programs administered by HUD include (3 types):

pg.37 - CORRECT ANSWER=> 1. Rental assistance in the form of Section 8 certificated or vouchers for

low-income households.

  1. Public or subsidized housing for low-income individuals and families.
  2. Ginnie Mae, a wholly-owned federal corporation within HUD." "Within HUD, ___________ in the form of Section 8 certificated or vouchers for low-income households.

pg.37 - CORRECT ANSWER=> rental assistance"

"Within HUD, ___________ housing for low-income individuals and families.

pg.37 - CORRECT ANSWER=> public or subsidized"

"Within HUD, ___________, a wholly-owned federal corporation within HUD.

pg.37 - CORRECT ANSWER=> Ginnie Mae"

"___________ statues prohibit housing discrimination based on race, color, national origin, religion, families with children, disabilities, sex. Sec per a ___________ executive order.

pg.38 - CORRECT ANSWER=> Federal Fair Housing

“___________ is the process of creating a new mortgage loan.

pg.14 - CORRECT ANSWER=> Origination"

"___________ bonds sold by government. - CORRECT ANSWER=> Municipal bonds"

"The detailed process of evaluating a borrower's loan application to determine the risk involved for the lender is defined as ___________.

pg.14 - CORRECT ANSWER=> underwriting."

"The process of making a lending decision is ___________.

pg.14 - CORRECT ANSWER=> underwriting."

"Consumation =

p.21 - CORRECT ANSWER=> Closing!"

"___________ is something of value that can be pledged as security for repayment of a loan.

pg.21 - CORRECT ANSWER=> Collateral"

"Fiat means

pg.25 - CORRECT ANSWER=> "backed by faith""

"The central banking system, AKA ___________.

PG.25 - CORRECT ANSWER=> The Federal Reserve (The Fed)."

pg.41 - CORRECT ANSWER=> financial system."

"Under Dodd-Frank, the ___________ was established.

pg.41 - CORRECT ANSWER=> Consumer Financial Protection Bureau (CFPB)"

"CFPB ___________.

pg.41 - CORRECT ANSWER=> regulates financing."

"___________ prohibits redlining.

pg.42 - CORRECT ANSWER=> Community Reinvestment Act (CRA)"

"___________ is the practice of refusing to provide financing in a particular area becuase of the location.

pg.42 - CORRECT ANSWER=> Redlining"

"___________ is an angency responsible for affording, housing-related and community service programs, and the regulation of the state's manufactured hoising industry.

pg.53 - CORRECT ANSWER=> Texas Department of Housing and Community Affairs (TDHCA)"

"Veterans, military members, and their spouses may recieve up to ___________ on a fixed-rate loan for 15, 20, 25, or 30-year terms.

pg.54 - CORRECT ANSWER=> $726,200"

"The creditor must ensure that the consumer receives the ___________ at least 3 business days before the consumer closes the loan.

pg.68 - CORRECT ANSWER=> Closing Disclosure Form"

"Establish 1970, ___________ is a federally chartered corporation used to purchase mortgages in the secondary market.

pg.115 - CORRECT ANSWER=> Freddie Mac (FHLMC)"

"The market where consumers (buyers) and mortgage lenders come together to create and negotiate terms of a mortgage transaction is called ___________.

pg.125 - CORRECT ANSWER=> primary mortgage market"

"___________ include savings and loans, commercial banks, mutual savings banks, mortgage companies, credit unions, individuals, or any person or business that provides cash for someone seeking a mortgage.

pg.125 - CORRECT ANSWER=> Primary market lenders"

"A consumer is ___________.

pg.125 - CORRECT ANSWER=> a borrower."

"A claim, lien, charge, or liability attached to and binding real property in an.

pg.135 - CORRECT ANSWER=> Encumbrances and Liens."

"A ___________ is a right given by law to certain creditors to have debts paid out of a defaulting debtor, usually theoughh a court sale.

pg.137 - CORRECT ANSWER=> lien"

"The borrower is know an ___________.

pg.137 - CORRECT ANSWER=> mortgagor"

"The lenders is known as ___________.

pg.137 - CORRECT ANSWER=> mortgagee."

"In the borrower's unconditional promiseto rpay and includes the amount borrowers unconditional promise to repay and includes the amount borrowed, yet amount, due date, and rate of interest.

pg.138 - CORRECT ANSWER=> A promissory note"

"The promissory note is also known as ___________.

pg.138 - CORRECT ANSWER=> real estate lien note."

"A ___________, which is a document that pledges the property as security repayment of the note, recorded in the county in which the property is located.

pg.138 - CORRECT ANSWER=> mortgage"

"Any excess money left over from the forced sale is given to the ___________.

pg.138 - CORRECT ANSWER=> debtor"

interest all payments have been made." "Contract for deed becomes fully executed when the ___________, and the seller delivers the deed to the buyer.

pg.139 - CORRECT ANSWER=> final loan payment is made"

"The seller is also known as the ___________

pg.139 - CORRECT ANSWER=> vendor."

"The buyer is also known as the ___________

pg.139 - CORRECT ANSWER=> vendee."

"A clause that gives the borrower the ability to replace the primary instrument with another without affecting the subordinate instrument's position.

pg.141 - CORRECT ANSWER=> Lifting clause."

"More than two-thirds of subprime loans have ___________, compared to less than ___________% of conventional prime loans.

pg.141 - CORRECT ANSWER=> prepayment penalties

less than 2%" "A clause in which a holder of a mortgage permits a subsequent mortgage to take priority. It allows a mortgage to take a lower lien position.

pg.142 - CORRECT ANSWER=> Subordination clause."

"An easement for ingress and egress is known as a(n) ______.

pg.152 - CORRECT ANSWER=> encumbrance."

"A lien given freely, usuallly as collateral for a loan.

pg.152 - CORRECT ANSWER=> Voluntary lien."

"Calculate: Interim Interest:

loan × interest as decimal (0% to 0.0) ÷ days in a year (365) × interim day(s) to the end of month = $ pg.

-Example pg.157 - CORRECT ANSWER=> yeeeeeee!"

"Calculate: New Loan Balance P×R×T = Annual Interest ÷ 12 = Monthly Interest interest - monthly interest = X Loan Balance - X = New Loan Balance

pg.159 with Example - CORRECT ANSWER=> yiiiipppeeeeee!"

"PITI payments do NOT include which of the following: A. Principle B. Funding Fee C. Hazard Insurance D. Interest

pg.160 - CORRECT ANSWER=> B. Funding Fee"

"Semi-annual means ___________.

pg.179 - CORRECT ANSWER=> twice per year."

"The term "house payment" typically includes a monthly payment of ___________ of the annual taxes, homeowner's insurance and mortgage insurance (if any).

pg.160 - CORRECT ANSWER=> 1/12th"

"Points are % points based on the loan amount. 1 point = 1% of the loan amount

pg.160 - CORRECT ANSWER=> yay!"

"___________ includes both Principal (P) and Interest (I)

pg.162 - CORRECT ANSWER=> Monthly Payment"

"___________ is used by buyers when Interest Rates are forecast to go down.

"With a ___________ loan, the loan balance is due before the loan fully amortizes, possibly in 1, 5, 10 years.

pg.165 - CORRECT ANSWER=> balloon loan"

"___________ loan is when a buyer wants to purchase a residential property in need of repairs or ___________, the buyer usually has to obtain financing first to purchase the dwelling, additional financing to do the rehabilitation construction, and a permanent mortgage when the work is completed to pay off the interim loans with a permanent mortgage.

pg.165 - CORRECT ANSWER=> Construction to Permanent

modernization" "This type of loan is likely to contain a release clause, allowing the borrower to obtain partial release of specific lots by making required lump sum payments.

pg.166 - CORRECT ANSWER=> Blanket Mortgage"

"lump sum means

pg.166 - CORRECT ANSWER=> a one-time payment for the total amount due, rather than that payment

be broken into smaller installments." "___________ = the percentage of value that the lender is willing to lend.

pg.168 - CORRECT ANSWER=> LTV (Loan-to-Value ratio)"

"COMMON MORTGAGE FRAUD SCHEME

___________ is excessive selling/lending activity to generate fees and commissions.

pg.176 - CORRECT ANSWER=> Churning"

"Who administers the FHA loan program?

pg.183 - CORRECT ANSWER=> HUD (Deprt. Housing and Urban Developement)"

"What kind of properties can you get an FHA loan on?

pg.183 - CORRECT ANSWER=> "

"FHA includes a downpayment as low as ___________%. Therefore, FHA is not 100% financing. It is ___________%.

pg.183 - CORRECT ANSWER=> 3.5%

"What is FHA?

pg.183 - CORRECT ANSWER=> A mortgage insurance program that protects the lender from loss from

borrower default, by insuring full amount of the loan." "What does FHA most resemble?

pg.183 - CORRECT ANSWER=> An insurance provider."

"FHA is not a ___________.

pg.183 - CORRECT ANSWER=> loaner."

"3 advantages to FHA loan:

pg.183 - CORRECT ANSWER=> 1. Qualifying ratios are slughtly more lenient.

  1. LTVs are very high.
  2. MIP covers the entire loan amount." "Every FHA loan has a ___________ that cannot go away.

pg.186 - CORRECT ANSWER=> MIP"

"Conventional LTV higher than 8% has a ___________ that can go away.

pg.186 - CORRECT ANSWER=> PIM"

"FHA charges ___________ and can be paid at closing or added to the loan at funding.

pg.186 - CORRECT ANSWER=> Up-Front Mortgage Insurance Premium (UFMIP)"

"FHA allows the seller to help the buyer up to ___________%, but cannot provide the ___________.

pg.186 - CORRECT ANSWER=> 6%

downpayment." "FHA allows family co-signers and gift grants from friends.

""gross" means ___________.

pg.211 - CORRECT ANSWER=> pre-tax"

"GMI means ___________.

pg.211 - CORRECT ANSWER=> Gross Monthly Income"

"The ___________ ratio, at ___________ %, is used to qualify a borrower for a loan based on the proposed house payment and their gross monthly income (GMI).

pg.211 - CORRECT ANSWER=> front, 28%"

"The ___________ ratio, at ___________ %, of the borrower's total recurring monthly debts or recurring monthly payments.

pg.211 - CORRECT ANSWER=> back, 36%"

"Front Ratio Formula:

pg.211 - CORRECT ANSWER=> .28 × GMI = Max monthly house payment"

"Back Ratio Formula:

pg.211 - CORRECT ANSWER=> .36 × GMI = Max PITI and monthly debts/payments"

"FHA Conventional Pre-Approved form is ___________.

pg.227 - CORRECT ANSWER=> Form B Conditional Approval Letter."

"PENCIL acronym: P- E- N- C- I- L- must receive loan estimate within ___________ ___________ days, ___________ P.M.

pg.232 - CORRECT ANSWER=> P- Property

E- Estimate Value N- Name

C- Credit I- Income L- Loan amount 3 business 5 PM" "Value is created by DUST acronym, D- U- S- T-

pg.236 - CORRECT ANSWER=> D- Demand- purchasing power to acquire it.

U-

S- Scarcity- T- Transferability-" "Market Value is the most ___________ a property should bring in a competitive market and open market under all conditions requisite to a fair sale, under guidelines published by federal institutions Fannie Mae and Freddie Mac.

pg.236 - CORRECT ANSWER=> probable price"

"Ad Valorem (___________) taxes are assessed based upon the ___________ of the property and the current tax rate.

pg.237 - CORRECT ANSWER=> according to value

assessed value" "___________ is the best indicating value of value for existing properties.

pg.238 - CORRECT ANSWER=> Sales Comparison Approach"

"Used in ___________, the ___________ Approach is a standard part of all appraisal reports and is generally considered the most reliable approach because it is based on verifiable market events.

pg.238 - CORRECT ANSWER=> Residential subdivisions

Sales Comparison Approach"

"___________ is the property being appraised by the appraiser and the appraisal assessment is their ___________.

pg.259 - CORRECT ANSWER=> Subject property

opinion" "If a borrower is in default, the mortgage servicer may start the ___________ process.

pg.263 - CORRECT ANSWER=> foreclosure"

"In many states, the borrower may also be responsible for paying any ___________, which is the difference between what is owed on the mortgage and the price the home sells for a foreclosure auction.

pg.263 - CORRECT ANSWER=> deficiency judgement"

"___________, which ended in 2016, allowed the Treasury to work with loan providers to refinance existing loans to achieve a ___________% front-end ratio.

pg.265 - CORRECT ANSWER=> HAMP

"If the borrower fails to repay the note (default), the mortgage allows the lender to ___________ the property.

pg.265 - CORRECT ANSWER=> foreclose"

"___________ allows

pg.265 - CORRECT ANSWER=> Default"

"The lender files a lawsuit against the homeowner, is a ___________. The lender files a lawsuit in the judicial system, is a ___________.

pg.265 - CORRECT ANSWER=> Strict Foreclosure.

Judicial Foreclosure." "___________, also known as Statutory Foreclosure, includes a ___________ clause.

pg.265 - CORRECT ANSWER=> Non-Judicial Foreclosure

Power of Sale:" "A ___________ cannot be accepted from borrowers who can financially afford their mortgage payments.

pg.270 - CORRECT ANSWER=> Deed in lieu"