Chp. 15 Quiz - Real Estate Finance

Question 1

In the event of default by the purchaser, the lender has the right to bring legal action through the courts to satisfy the debt. This is called by what name?

Answer 1

Judicial Foreclosure

Question 2

Which loan covers the period of time between the end of one mortgage and the beginning of another?

Answer 2

Bridge

Question 3

Paul’s loan payment is the same amount each month. Paul is most likely holding what kind of loan?

Answer 3

Fully Amortized

Question 4

Which of the following does not meet the criteria for a VA loan?

Answer 4

To make a down payment on a motor home

Question 5

Ruth must deposit $1,113.45 into a FHA-backed escrow account. This is known as what type of account?

Answer 5

Impound Account

Question 6

What is the interest rate on an ARM tied to?

Answer 6

Index

Question 7

Typically, conventional loans

Answer 7

carry prepayment penalties, while government-backed loans do not.

Question 8

The loan origination fee on a VA loan cannot exceed

Answer 8

1 percent of the loan amount.

Question 9

Typically, conventional loans

Answer 9

require higher down payments than government-backed loans require.

Question 10

Which organization insures loans made by approved lending institutions?

Answer 10

FHA

Question 11

A loan that covers the period between the end of one loan and the beginning of another loan is called a(n)

Answer 11

Bridge loan.

Question 12

What type of loan is often used when a seller will not accept a property sale contingency?

Answer 12

Bridge Loan

Question 13

What type of account holds property insurance, taxes, and Mutual Mortgage Insurance in escrow?

Answer 13

Impound Account

Question 14

In which of the following types of loans is the payment allocated only to interest?

Answer 14

Interest Only

Question 15

A negative amortization cap usually limits the amount the borrower can owe to _____ of the original loan amount?

Answer 15

125%

Question 16

The loan-to-value limit set for conventional loans on single-family residences is

Answer 16

85%

Question 17

Which repayment plan is known as an interest-only loan?

Answer 17

Straight

Question 18

Buyer Rich has asked Seller Sally to hold $15,000 as a second mortgage. What type of mortgage is Rich requesting?

Answer 18

Purchase Money Mortgage

Question 19

Fixed-rate fully-amortized loans

Answer 19

provide a fixed interest rate for the life of the loan.

Question 20

Which of the following is not a way in which a property with an existing mortgage can be sold?

Answer 20

Foreclosure

Question 21

A subdivision developer most likely would apply for what type of loan?

Answer 21

Blanket Loan

Question 22

Which of the following does NOT happen as part of a foreclosure by action in equity and sale?

Answer 22

The mortgagor sues the lender.

Question 23

Points are equal to _______ of the loan amount?

Answer 23

1%

Question 24

Jim has a loan where the entire payment amount goes to the interest owed? What type of loan does Jim hold?

Answer 24

Straight