(Ch. 16) Federal Laws Affecting Real Estate Flashcards
- The National Flood Insurance Program:
(A) is enforced by the New Jersey Department of Environmental Protection.
(B) prohibits construction in areas designated “flood plains.”
(C) requires that flood insurance be purchased by any borrower whose property is in a flood plain and is financed by a federally insured loan
(D) provides monetary relief to families who suffer financial losses caused by floods
C
The law is enforced by HUD and construction is not prohibited in flood plains.
- All but one of the following is included in the finance charge” under the Truth-in-Lending provisions
(A) points.
(B) loan finder fee.
(C) attorney fee.
(D) service charges
C
The attorney’s fee will show as a debit (charge) on the closing statement, whether or not credit is extended.
- Under Truth-in-Lending it is permissible to advertise which of the following statements alone?
(A) $2,000 down.
(B) 4% interest.
(C) Reasonable monthly terms
(D) No closing costs.
C
Advertising in general terms is permissible by itself. If any specific credit information is given, additional information must be provided
- Truth-in-Lending laws apply to:
(A) commercial loan transactions involving real property
(B) residential real estate mortgages
(C) all personal property transactions.
(D) unconscionable contracts.
B
The law applies only to “consumer” loans.
- Under Truth-in-Lending, the borrower (consumer), except in cases of a first purchase money mortgage to acquire or construct a home, has a right of rescission upon notice for:
(A) two calendar days.
(B) 24 hours.
(C) three business days
(D) 72 hours.
C
A “cooling off period. Protects homeowner from losing a home to unscrupulous sellers of home improvements, appliances, furniture, etc.
- Under Truth-in-Lending, it is permissible to have an ad which only states:
(A) the interest rate.
(B) the down payment.
(C) “easy payment terms available.”
(D) the monthly payment.
C
See explanation to #3.
- Which of the following statements is NOT true?
(A) he annual percentage rate combines the interest rate with other costs of the loan.
(B) Under TIL, refinanced loans are covered regardless of amount.
(C) The Truth-in-Lending Law is a federal law. (D) Advertising rules under TIL do not apply to owners acting without real estate agents.
D
Advertising rules under TIL apply to property owners as well as to licensees.
- The primary purpose of the Truth-in Lending Act is to:
(A) save the general public money in their installment purchases
(B) disclose to the consumer the cost and conditions of the installment purchase.
(C) limit interest rates
(D) protect creditors in financing transactions.
B
To allow comparison shopping.
- The annual percentage rate must be revealed to
(A) an applicant for a residential first mortgage loan
(B) an applicant for a commercial first mortgage loan.
(C) The Federal Trade Commission.
(D) The Federal Housing Administration.
A
Commercial transactions are not covered.
- Regulation Z prohibits:
(A) the advertising of credit terms
(B) advertising in general terms such as reasonable monthly payments
(C) Both A and B.
(D) Neither A nor B.
D
Advertising in general terms is permitted
- The Equal Credit Opportunity Act makes it illegal for the lender to refuse to grant a loan on the basis of
(A) a substandard FICO score.
(B) a poor credit history.
(C) income derived from public assistance.
(D) the applicant’s age minority status.
C
Disallowing income from public assistance is no longer permissible under the provisions of ECOA.
- Which of the following laws requires lenders to disclose the number of loans approved in certain areas?
(A) Home Mortgage Disclosure Act
(B) Federal Home Loan Mortgage Act
(C) Truth in Lending
(D) Uniform Commercial Code
A
The Home Mortgage Disclosure Act is designed to prevent redlining.
- The Americans with Disabilities Act covers of the following
(A) housing discrimination.
(B) employment discrimination.
(C) businesses that are public accommodations.
(D) individuals with mental and physical disabilities, including AIDS and alcoholism.
A
Housing discrimination is covered by state and federal fair housing laws.
- Under the provisions of RESPA:
(A) The main thrust is to eliminate any kickbacks that might occur.
(B) Buyers may not be compelled by the sell- er to use a particular title company.
(C) Both A and B.
(D) Neither A nor B.
C
Statements A and B are true under RESPA.
- Under the provisions of RESPA, lenders must provide all of the following EXCEPT:
(A) a special information booklet.
(B) a good faith estimate of closing costs.
(C) a HUD-1 Uniform Settlement Statement.
(D) a comparative market analysis.
D
A CMA is provided by a real estate broker, not RESPA.
