Chapter 10 Flashcards
The ________ insures loans with high loan-to-value ratios (LTV) that are made with less demanding cash down payment requirements than loans originated by conventional lenders.
a. Federal Housing Administration (FHA)
b. Truth-in-Lending Act
c. MGIC Investment Corp.
d. None of the above.
A
________ involves the seller carrying back a note for the unpaid portion of the price remaining after deducting the down payment and the amount of the loan the buyer is assuming.
a. Seller financing
b. An installment sale
c. A credit sale
d. All of the above.
D
The tax impact a carryback seller will receive on his carryback financing is ________ category income, regardless of whether the property sold was in another income category.
a. portfolio
b. passive
c. earned
d. None of the above.
A
The amount of interest a private, non-exempt lender can charge is regulated by statute and the California Constitution, collectively called:
a. usury laws.
b. Fair Housing Laws.
c. private mortgage insurance.
d. loan sharking.
A
The most common penalty suffered by a non-exempt private lender in violation of usury laws is:
a. a five year jail sentence.
b. the forfeiture of all interest for the loan.
c. the forfeiture of all principal remaining due.
d. a $100,000 fine.
B
A __________ is a lender’s conditional commitment to fund a mortgage at a quoted interest rate, origination fee and fixed number of points, regardless of whether interest rates rise or fall prior to funding the mortgage.
a. rate lock
b. Servicer Participation Agreement
c. final commitment
d. None of the above.
A
To qualify for private mortgage insurance (PMI), a buyer must:
a. be a natural person, not a corporation, partnership or limited liability company.
b. take title as the vested owner of the property.
c. Both a. and b.
d. Neither a. nor b.
C
A buyer will be required to submit ________ for review by a private mortgage insurer.
a. a copy of the loan application
b. a credit report current within 90 days and covering a minimum of two years
c. an appraisal of the real estate to be purchased
d. All of the above.
D
Notes are categorized by the method for repayment of the debt, such as:
a. straight notes.
b. installment notes.
c. Both a. and b.
d. Neither a. nor b.
C
________ call for periodic adjustments to the interest rate and the amount of scheduled payments.
a. All-inclusive trust deeds (AITDs)
b. Adjustable rate notes (ARMs)
c. Fixed-rate notes
d. All of the above.
B
