CANVAS QUIZ: Chapter 9

Question 1

Points are figured on the:

Answer 1

a. amount of the new loan.

Question 2

A charge to the borrower for paying off all or part of a loan balance before the due date (only enforceable during the first five years of an owner occupied one- to four-unit home) is called:

Answer 2

d. a prepayment penalty.

Question 3

Impound accounts are prepaid items consisting of reserves for:

Answer 3

• property taxes.
• hazard insurance.
• mortgage insurance.

Question 4

Which of the following is considered an institutional lender?

Answer 4

• savings banks
• commercial banks
• life insurance companies

Question 5

Which of the following are direct lenders who fund loans themselves using an investor’s guidelines then sell the loan to that investor?

Answer 5

a. mortgage bankers

Question 6

Which of the following are licensed and shop for a lender for the borrowers and earn a fee by putting lender and borrower together?

Answer 6

b. mortgage brokers

Question 7

Of the three parties to a trust deed in CA, which one is the beneficiary?

Answer 7

a. lender

Question 8

A charge based on the loan amount that is collected as compensation by the lender for processing the loan is called:

Answer 8

c. a loan origination fee.

Question 9

The practice of purchasing real estate using a small amount of your own money and a larger proportion of borrowed funds is called:

Answer 9

b. leverage.

Question 10

The interest rate the borrower is actually paying (including interest, points, and loan fees) is called the:

Answer 10

b. effective interest rate.

Question 11

With a qualified mortgage, which ensures that borrowers have the ability to repay the loan, the total debt ratios must be 43% or less and cannot exceed:

Answer 11

a. 3 points.

Question 12

A loan for which the payments are usually the same each month for the life of the loan is a(n):

Answer 12

b. fixed-rate mortgage.

Question 13

What occurs when monthly installment payments are insufficient to pay the interest accruing on the principle balance, so that the unpaid interest must be added to the principle due?

Answer 13

c. negative amortization

Question 14

With which loan product can the borrower receive monthly installments, or a lump sum, and the loan is usually only due and payable if the borrower discontinues occupying the property?

Answer 14

b. reverse mortgage loan

Question 15

The nation’s largest investor in residential mortgages on the secondary mortgage (trust deed) market is:

Answer 15

c. Fannie Mae (FNMA).

Question 16

Which of the following federal acts allows loan applicants who have data collected to see their files?

Answer 16

d. The Fair Credit Reporting Act

Question 17

Some government backed loans only insure or guarantee loans. Which of the following actually is a direct lender of funds?

Answer 17

c. Cal-Vet

Question 18

The SAFE Act stands for the:

Answer 18

b. Secure And Fair Enforcement Mortgage Licensing Act.

Question 19

A mortgage broker with a DRE MLO endorsement is required to keep “Mortgage Loan Disclosure Statements” on file for:

Answer 19

c. three years.

Question 20

Charging more than the legally allowed percentage of interest is called:

Answer 20

c. usury.