Chapter 10

Question 1

Which of the following is an institutional lender?

Answer 1

life insurance company

Question 2

The three major credit reporting agencies are:

Answer 2

Experian, Equifax, and TransUnion.

Question 3

A Seller's Financial Disclosure Statement must be signed by the:
all of the answers are correct 
  broker 
  buyer 
  seller

Answer 3

all of the answers are correct

Question 4

A credit report is used to help measure a borrower’s:

Answer 4

desire to pay

Question 5

The CalHFA program:

Answer 5

is designed to help first time homebuyers

Question 6

The maximum FHA insured loan under the 203b program for a home with an acquisition cost of $100,000 is:

Answer 6

$96,500

Question 7

Sylvia wants to purchase a home. She is recently divorced and is receiving alimony for the next ten years in addition to child support for her three year old son. She has been in her present job for five years. What sources of income can she include in her loan application?

Answer 7

Her salary from her job, alimony, and child support.

Question 8

The major source for junior loans (2nds, 3rds, etc.) is:

Answer 8

private parties’

Question 9

Which FHA program is the most popular?

Answer 9

203b

Question 10

Which of the following types of loans are made only to individuals who are intending to occupy the property as a personal residence?

Answer 10

VA loan

Question 11

A secondary mortgage market is where:

Answer 11

existing lenders sell to other lenders and investors

Question 12

Fannie Mae is the:

Answer 12

Federal National Mortgage Association

Question 13

When a borrower pays mortgage insurance on an FHA loan, this type of insurance:

Answer 13

protects the lender against a shortage in the event of a default

Question 14

Which organization requires a CRV appraisal before approving a loan?

Answer 14

U. S. Department of Veterans Affairs

Question 15

Who does not lend their money, but instead earns a fee for bringing a borrower and lender together?

Answer 15

mortgage broker

Question 16

Insurance companies are one of the major sources for conventional loans. Insurance companies:

Answer 16

loan funds primarily on large commercial properties

Question 17

The term impounds most nearly means:

Answer 17

reserves

Question 18

Which of the following best defines a purchase money mortgage?

Answer 18

a mortgage used to acquire a property

Question 19

For an REIT to avoid double taxation, it must distribute what percentage of its income each year to the shareholders/investors?

Answer 19

95%

Question 20

For gross income purposes, most lenders want the borrower to have at least a:

Answer 20

2 year work history

Question 21

Private mortgage insurance (PMI):

Answer 21

insures the lender for the top portion of the loan

Question 22

The VA will guarantee loans on the following properties

Answer 22

mobile homes

townhomes

Question 23

Which of the following types of loans are made only to individuals who are intending to occupy the property as a personal residence?

Answer 23

VA

Question 24

For qualifying purposes, monthly housing payments include:

Answer 24

principal, interest, taxes, insurance, homeowner dues, if any

Question 25

When a borrower pays mortgage insurance on an FHA loan, this type of insurance:

Answer 25

protects the lender against a shortage in the event of a default

Question 26

Which government program carries a prepayment penalty if the loan is paid off in less than 5 years?

Answer 26

none have prepayment penalties

Question 27

When the Department of Veteran’s Affairs “guarantees” a loan, it does so in order to protect the:

Answer 27

lender

Question 28

The primary market is where:

Answer 28

new loans are granted to borrowers’

Question 29

A loan made by a lender who intends to keep the loan until paid:

Answer 29

portfolio loan

Question 30

Which program has the seller deed title to the government?

Answer 30

Cal-Vet