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REL360 > Exam 3 > Flashcards

Exam 3 Flashcards

1
Q

The four main types of mortgages are:

A

conventional mortgages, FHA mortgages, VA mortgages, and home equity mortgages.

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2
Q

When choosing a mortgage you must decide on the:

A

type, amount of leverage (size), refinancing, and default

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3
Q

Where loans originate and borrowers/mortgage originators come together to negotiate terms.

A

Primary Mortgage Market

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4
Q

Mortgage bankers, mortgage brokers, banks and thrifts are all part of the:

A

Primary Mortgage Market

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5
Q

Wholesale market among lenders where existing home loans are resold.

A

Secondary Mortgage Market

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6
Q

Privately held corporations with public purposes created by the U.S. Congress:

A

Government-Sponsered Enterprises (GSEs)

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7
Q

Fannie Mae and Freddie Mac are:

A

Government-Sponsored Enterprises

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8
Q

(True or False) Conventional Mortgage Loans are the oldest form of mortgages.

A

True

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9
Q

Any standard home mortgage loan not insured by FHA or guaranteed by Department of Veterans Affairs.

A

Conventional Mortgage Loans

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10
Q

Meets the standard requirements for purchase by Freddie Mac or Fannie Mae.

A

Conforming conventional home loan

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11
Q

Does not meet GSE requirements in some respect.

A

Nonconforming conventional home loan

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12
Q

If a loan falls below 80% of CURRENT value and the borrower is in good standing, a private mortgage insurer:

A

MAY allow termination

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13
Q

If a loan falls below 80% of ORIGINAL value and the borrower is in good standing, a private mortgage insurer:

A

MUST allow termination

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14
Q

If a loan falls to 78% of ORIGINAL value and the borrower is in good standing, a private mortgage insurer:

A

MUST terminate

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15
Q

(True or False) Veterans Affairs Guarantees loan covers funding fee and closing costs.

A

False.

Veterans Affairs Guarantees loan covers funding fee, but not closing costs.

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16
Q

Mortgage given by a property buyer simultaneous with receipt of title:

A

Purchase money mortgage

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17
Q

A second mortgage paired with an underlying 1st mortgage to keep the 1st below 80 percent LTV, thus avoiding required mortgage insurance.

A

Piggyback loan

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18
Q

Converts home equity to income without

requiring borrower to move.

A

Reverse Mortgage

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19
Q

Interest-only payments for up to

fifteen years, then converts to a full payment for the remainder of the term.

A

Interest-only amortizing

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20
Q

Interest-only payments for five to seven years, ending with a full repayment of principal.

A

Interest-only with balloon

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21
Q

(True or False) Interest-only amortizing, interest-only with balloon, hybrid adjustable rate mortgages, and options adjustable rate mortgages are all recent mortgage forms.

A

True

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22
Q

Converts regular interest expense and up-

front loan fees into a single equivalent interest expense.

A

Annual Percentage Rate (APR)

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23
Q

Governs relationship between a principal (client) and someone charged to act on principal’s behalf.

A

Law of Agency

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24
Q

Agent that has the power to act for principal in all matters.

A

Universal agent

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25
Q

Agent that has the power to act within limits of a business or employment relationship.

A

General agent

26
Q

Agent that has the power to act in a specific event or transaction.

A

Special agent

27
Q

An agent represent both the buyer and seller is known as a:

A

dual agency

28
Q

In real estate a contract requires:

A

competent parties, lawful intent, offer and acceptance, consideration, no defects to mutual assent, to be in writing, and a legal description.

29
Q

(True or False) A legal contract can be made by an oral agreement.

A

False.

A contract must be in writing per Statute of Frauds

30
Q

(True or False) A buyer obtains equitable title when a contract for sale of real estate is fully signed.

A

True

31
Q

Ownership of a freehold estate.

A

Legal title

32
Q

The right to obtain a title.

A

Equitable title

33
Q

The _____ normally handles the funds for a transaction.

A

Broker

34
Q

An account with an insured institution or title company dedicated for a particular purpose.

A

Escrow account

35
Q

(True or False) A broker may transfer funds of a transaction to either of the parties savings accounts.

A

False.

Broker must put deposits in an escrow account

36
Q

Obligation of a party to perform depends on one or more conditions being met.

A

Contingent contract

37
Q

One party’s contractual rights and obligations are transferred to someone else.

A

Assignment

38
Q

Third party who holds moneys or documents on behalf of contract parties that distributes items in accordance with contract.

A

Escrow agent

39
Q

An escrow agent can be a(n):

A

attorney, financial institution, or title company

40
Q

Buyer can force seller to

convey title in a:

A

specific performance

41
Q

Seller can retain

deposit if buyer backs out.

A

Liquidated damages

42
Q

Mutual agreement to cancel.

A

Rescission

43
Q

A facilitator for the buyer that has no legal role after the contract is signed is a:

A

selling broker

44
Q

A broker that may handle closing if no lender is involved and may assist in retaining services for seller.

A

Listing broker

45
Q

(Paid by buyer or seller)

Owner’s title insurance

A

Seller

46
Q

(Paid by buyer or seller)

Lender’s title insurance

A

Buyer

47
Q

(Paid by buyer or seller)

Management state document tax

A

Buyer

48
Q

(Paid by buyer or seller)

State document tax for the deed

A

Generally by the seller

49
Q

(Paid by buyer or seller)

Management intangibles tax

A

Buyer

50
Q

(Paid by buyer or seller)

Recording of new management

A

Buyer

51
Q

(Paid by buyer or seller)

Recording of deed

A

Buyer

52
Q

(Paid by buyer or seller)

Brokerage commission

A

Seller

53
Q

A contract for services, not real estate.

A

Listing contract

54
Q

Usually between a seller and broker, but becoming more common with buyer and broker.

A

Listing Contract

55
Q

Listing contract that states the broker is assured commission if a buyer is found in time.

A

Exclusive Right of Sale

56
Q

Listing contract that states the seller agrees to pay commission to broker if a buyer is found in time.

A

Exclusive Agency

57
Q

Listing contract that state the broker has no exclusive protection, only commission if he sells the property.

A

Open Listing

58
Q

Obligation of a party to perform depends on one or more conditions being met

A

Contingency Clause

59
Q

Income capitalization and discounted cash flow techniques to make individual property acquisition and disposition decisions.

A

REIT Valuation

60
Q

(True or False) REITs seek to purchase properties that have positive net present values (NPVs) and internal rates of return (IRRs) in excess of the REIT’s opportunity cost of capital

A

True

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