Ch 33 - 40 Flashcards
Which of these classes are protected by the Fair Housing Laws of Illinois?
Middle Income Renters
Criminal Record Holders
Military Status
Employment Status
Military Status
Military status is protected by fair housing laws of IL
(A person’s active or retired military status is not a protected class under federal guidelines.)
If a person believes he or she has been discriminated against, how long does he or she have to file a HUD complaint?
1 Year
The injured party has up to 1 year to file a discrimination complaint with HUD.
What practice helps move low-income persons into previously-owned higher income owner properties?
Filtering Down
This is the practice known as filtering down.
Which Fair Housing Law added sex to the list of protected classes?
Housing and Community Development Act
Housing and Community Development Act added sex to list of protected classes
Does the ADA apply to ppl with AIDS
Yes
This act applies to people with an AIDS disease diagnosis who are considered members of a protected class under Fair Housing.
Which Fair Housing Law added handicap individuals to the list of protected classes?
Fair Housing Amendments Act of 1988
T/F: According to the TRID rule, lenders must provide:
A copy of the booklet Your Home Loan Toolkit.
A Loan Estimate of settlement costs at the time of loan application or within three business days.
A Closing Disclosure at least three days before closing.
True
lenders must provide all of these
T/F: RESPA permits sharing commissions and the payment of referral fees among cooperating brokers or multiple-listing services.
True
RESPA permits sharing commissions and the payment of referral fees among cooperating brokers or multiple-listing services.
T/F: Regulation Z (Truth in Lending Act) applies to all loans that are secured by a residence.
True
Regulation Z (Truth in Lending Act) applies to all loans that are secured by a residence.
T/F: Regulation Z (Truth in Lending Act) applies to all loans that are secured by a residence. It also applies to Commercial loans.
False
Applies to loans secured by a residence. But not:
Commercial loans
or
Agricultural loans over $25,000
T/F: In most cases the borrower has a right to cancel the transaction by notifying the lender within three days. This does not apply to residential first mortgage loans, but does apply to refinancing and home equity loans.
True
In most cases the borrower has a right to cancel the transaction by notifying the lender within three days. This does not apply to residential first mortgage loans, but does apply to refinancing and home equity loans.
T/F: Any advertising is subject to Regulation Z (truth in lending) disclosure
True
Any advertising is subject to Regulation Z disclosure
T/F: According to the equal credit opportunity act, Lenders are required to inform an applicant who was rejected of the reasons for the denial, in writing and within 30 days
True
Lenders are required to inform an applicant who was rejected of the reasons for the denial, in writing and within 30 days
The Community Reinvestment Act was passed to prevent ____ and to encourage banks and thrifts to help meet the credit needs of all segments of their communities.
Redlining
The Community Reinvestment Act was passed to prevent redlining and to encourage banks and thrifts to help meet the credit needs of all segments of their communities.
To which of the following transactions does RESPA NOT apply?
Seller-financed loans
Residential property
First or second mortgage loans
A loan that is insured by a federal agency
Seller-financed loans
RESPA (Real Estate Settlement Procedures Act) does not apply to seller financed loans
Which document is required by RESPA to detail the costs that the buyer and seller will pay at closing?
Summary of Accounts
Estimate Monthly Payments
HUD-1
Closing Disclosure
Closing Disclosure
Closing Disclosure is the document
Regulation Z (truth in lending) applies to which of these situations?
$35,000 farm loan
$50,000 restaurant loan
$75,000 condominium loan
$85,000 warehouse loan
$75,000 condominium loan
One broker says to another “I’ll take the east side of town and your company can take the west side.” What is this an example of?
Market allocation
Tie-in arrangement
Group boycott
Price fixing
Market Allocation
This is a common example of market allocation where two or more licensees or firms agree to work in different targeted areas near their offices.
All of the members of one board of REALTORS agree that they will not show the properties of the members of another board of REALTORS. What is this an example of?
Price fixing
Tie-in arrangement
Group boycott
Market allocation
Group boycott
This is a prime example of a group boycott by all members of a REALTORS board.
Two brokers working for the same firm meet over coffee and decide to charge the same set commission rate to all of their sellers. Is this an illegal action?
No. Antitrust laws do not apply to commission rates or MLS fees.
Yes. A broker’s commission must be related to the costs involved in each transaction.
No. The brokers do not represent competing firms.
Yes. It’s a violation of antitrust laws.
No. The brokers do not represent competing firms.
This is not considered to be an illegal action because each broker works for the same firm.
The ________ has the power to judge whether particular trade practices are unfair.
FTC
The Federal Trade Commission has the power to judge whether particular trade practices are unfair.
What does the Clayton Act allow private individuals to do?
Under the Clayton Act, private individuals are permitted to sue antitrust violators. If the suits are successful, the individuals can recover three times the damages incurred plus court costs and attorneys’ fees.
Are gender based ads for shared living acceptable?
Yes
Yes, gender based ads for shared living housing is acceptable.
T/F: Internet ads, on a licensee’s home page, must contain licensee’s name, sponsoring broker’s name, company name/address, geographic location.
True
Internet ads, on a licensee’s home page, must contain: licensee’s name, sponsoring broker’s name, company name/address, geographic location.
Which of the following is true regarding blind ads?
Licensees may not utilize blind ads unless they own the advertised property.
Licensees may not use blind ads regardless of who owns the property.
A blind ad is an ad that excludes the licensees name.
Blind ads placed by licensees are permitted if they do not discriminate.
Licensees may not use blind ads regardless of who owns the property.
Can’t use blind ads
Licensee Judy takes a weekly ad out in the South Side Journal. Judy does not place ads in any of the other neighborhood newspapers. What might be said about Judy’s advertisement practices?
Judy is targeting her market area.
A city-wide ad would be more cost-effective.
Ads in only one local paper may appear to be discriminatory.
Judy is marketing to potential buyers who fit the profile of those already established homeowners and not practicing discrimination.
Ads in only one local paper may appear to be discriminatory.
Ads in only one local paper such as one associated with a particular church may be considered as discriminatory against other religious groups or protected classes.
T/F: An internet “page” is an individual html document.
True
An internet “page” is an individual html document.
T/F: CAN-SPAM Act prohibits sending unwanted commercial e-mail messages to wireless devices without express prior authorization.
True
CAN-SPAM Act prohibits sending unwanted commercial e-mail messages to wireless devices without express prior authorization.
Which of the following groups are exempt from the Telephone Consumer Protection Act?
All new phone users after March 2008
Hospitals
Tax-exempt nonprofits
Out of state lottery businesses
Tax-exempt nonprofits
A person paid $150,000 for a house with the intention of renting it out for $1,000 per month. The economic principle that led the person to pay this price based on the property’s ability to generate this future income is known as:
Anticipation.
Substitution.
Supply and demand.
Anticipation
This is the economic principle of anticipation. Or, the belief that an action today can add future value or income.
Real estate value in general is:
The present monetary worth of benefits arising from the ownership of real estate.
The past monetary worth of benefits arising from the ownership of real estate.
The future monetary worth of benefits arising from the ownership of real estate.
Its cost value.
The present monetary worth of benefits arising from the ownership of real estate.
Real estate value can be determined by the present monetary worth of benefits arising from property benefits.
Because the sale prices of the comparables are known, while the value and price of the subject are not, adjustments:
should always be exaggerated.
can be made only to the comparables’ prices, not to the subject’s.
can be made only to the subject’s prices, not to the comparables’.
always reduce the subject’s value.
can be made only to the comparables’ prices, not to the subject’s.
can make adjustments to comparable
If a comparable sold for $200,000 but lacks a garage valued at $10,000, while the subject has one, the adjusted value of the comparable is
$190,000.00
$200,000.00
$210,000.00
The adjusted value of the sales comparable may be increased to $210,000.
$210k
The adjusted value of the sales comparable may be increased to $210,000.
T/F: As a rule, the fewer the total number of adjustments, the smaller the adjustment amounts, and the less the total adjustment amount: the more reliable the comparable.
True
less adjustments, smaller adjustments, means more reliable the comparable
If a comparable is better than the subject in some characteristic:
an amount is deducted from the sale price of the comparable.
no adjustment is necessary.
an amount is added to the sale price of the comparable.
all of the comparables must be adjusted accordingly.
an amount is deducted from the sale price of the comparable.
A better comparable property than the subject property may have a value amount deducted from the sales price of the comparable.
One of the principal factors for adjustment in a CMA or sales comparison appraisal is
location of mortgage lender.
current residence of buyer.
number of occupants.
time of sale.
number of occupants.
time of sale.
The process of securing a loan by pledging a property without giving up ownership of the property is called ______
Hypothecation
The process of securing a loan by pledging a property without giving up ownership of the property is called hypothecation.
A _____ conveys title to the property in question from the borrower (trustor) to a trustee as security for the loan
Deed of trust
A deed of trust conveys title to the property in question from the borrower (trustor) to a trustee as security for the loan
T/F: Then lender of a promissory note is the “payee”
True
The lender is the payee.
After a mortgage note has been paid in full, the lender must execute a document called a
Satisfaction of mortgage
After a mortgage note has been paid in full, the lender must execute a document called a satisfaction of mortgage.
T/F: Within a deed of trust transactions, the trustor/borrower conveys the title to a third party trustee who has the most control of the trust deed up until the loan in paid off in full to the beneficiary/lender.
True
Within a deed of trust transactions, the trustor / borrower conveys the title to a third party trustee who has the most control of the trust deed up until the loan in paid off in full to the beneficiary / lender.
At that point, the deed will be reconveyed or transferred back to the owner.
Ginnie Mae operates by:
purchasing mortgages from conventional lenders.
guaranteeing to lenders that monthly payments on mortgage loans will be made.
issuing conventional mortgage loans.
selling insurance to the FHA.
guaranteeing to lenders that monthly payments on mortgage loans will be made.
Ginnie Mae is one of the main secondary market investors. They help guarantee to lenders that monthly mortgage payments will be made on time by the borrowers as they work to minimize or spread the risk by “pooling” mortgage loans with other larger loan packages.
Freddie Mac issues securities known as _____
Guaranteed Mortgage Certificates.
T/F: Fannie mae is the primary market’s largest investor
False
Secondary market investor
Fannie Mae is the largest secondary market investor. They purchase loans from the primary mortgage market after they are funded by banks and others.
T/F: A “Satisfaction piece” is a document executed by a lender as evidence that a loan has been repaid in full.
True
A document executed by a lender as evidence that a loan has been repaid in full.
When financial institutions use funds from depositors to make mortgage loans, the process is called
interference.
syndication.
intermediation.
disintermediation.
intermediation.
This process is known as intermediation. The bank is effectively the “middleman” who moves money from one customer to another one.
What kind of mortgage allows the lender to change the interest rate at specified intervals and by a specified amount.
An Adjustable Rate Mortgage
T/F: The Federal Housing Administration (FHA) lends money
False
The Federal Housing Administration (FHA) does not lend money, but insures permanent long-term loans made by others.
T/F: For VA-Guaranteed Loans, the VA reimburses the lender for losses up to the guaranteed amount if foreclosure sale proceeds fail to cover the loan balance.
True
VA reimburses the lender for losses up to the guaranteed amount if foreclosure sale proceeds fail to cover the loan balance.
