Ch. 4 - Financing

Question 1

California Veterans Farm and Home Purchase Plan aka?

Answer 1

CAL-VET

Question 2

Refers to a refund when insurance policy is cancelled

Answer 2

Short Rate

Question 3

What is the Alquist-Piolo Act?

Answer 3

Disclosure required on properties located close to earthquake fault lines

Question 4

What is a perfect escrow?

Answer 4

An escrow where all terms of the instructions have been met or performed; escrow officer has everything needed to close

Question 5

What did the Easton v. Strassburger case give rise to?

Answer 5

The law requiring the seller an agent to make an inspection in full disclosure of the condition of the property

Question 6

If the frequency of the business cycle increases, with an accompanying rapid change in business and money conditions, the environment for a long-term investment is:

Answer 6

Unattractive

Question 7

According to economic theory, during inflationary periods, investors usually do not take long-term positions because:

Answer 7

They fear erosion of capital from escalating interest rates and short term investments usually provide a higher yield

Question 8

What advantage do real estate investment shave when compared to an investment in securities?

Answer 8

Depreciation allowances

Question 9

Which federal entity would most likely be involved in buying and selling government securities in the open market?

Answer 9

The Federal Open Market Committee

Question 10

What indicator would best define purchasing power of the US dollar?

Answer 10

Price Indexes

Question 11

What is a loan-qualifying tool?

Answer 11

Debt to income ratio

Question 12

Identify the stages of the economic cycle.

Answer 12

Prosperity. Recession. Depression. Expansion.

Question 13

What is the basic interest-rate the local bank pays to borrow money?

Answer 13

Discount Rate

Question 14

What is a cash reserve rate?

Answer 14

Required amount of deposits that must be retained by the bank (to lend money)

Question 15

In connection with real property financing, the term that would normally describe a mortgage banker collecting loans prior to sale is called:

Answer 15

Warehousing

Question 16

Which government agency would most likely be a primary lender on large tracts of land?

Answer 16

Federal Land Banks

Question 17

Whose primary role is to guarantee timely payment of interest on the mortgages?

Answer 17

Government national mortgage association (GNMA) aka Ginnie Mae

Question 18

According to the bankruptcy code, the dates that are discharged are those that exist when?

Answer 18

On the day when the bankruptcy petition was filed

Question 19

According to the civil code, the payment of a loan secured by a deed of trust can be subject to a late charge when it is received by the lender:

Answer 19

More than 15 days after the due date

Question 20

The effective INTEREST RETURN obtained from a first trust deed by an investor

Answer 20

Mortgage yield

Question 21

A commitment by the lender to make a permanent take out loan upon the borrowers demand refers to:

Answer 21

A standby loan commitment

Question 22

Which act assures a MEANINGFUL DISCLOSURE of credit terms?

Answer 22

Truth-in-Lending

Question 23

Purpose of this act is to provide CONSUMERS INFORMATION concerning the COST OF CREDIT

Answer 23

Federal Truth-in-Lending

Question 24

Which two loans do not have to comply with the Federal Truth-in-Lending law?

Answer 24

A business loan and a farm/agricultural

Residential and personal loans must comply

Question 25

What is required to clear the title of the seller under a recorded contract of sale that is in default?

Answer 25

Quiet title action or quitclaim deed

Question 26

What is the pneumonic Coca-Cola used for?

Answer 26

Used for the 4 legal essentials of a valid contract:

COnsideration
CApable parties
COnsent
LAwful object

Question 27

Means doing some thing by lie trickery or deceit

Answer 27

Subornation