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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.
- Public or subsidized housing for low-income individuals and families.
- 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.
- LTVs are very high.
- 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"
