Federal and state housing laws

Question 1

Total yearly cost of credit

Answer 1

annual percentage rate (APR)

Question 2

The illegal practice of inducing homeowners to sell their property by making misrepresentations regarding the entry or prospective entry of minority persons in order to cause a turnover of properties in the neighborhood; discriminatory acts against sellers.

Answer 2

blockbusting

Question 3

A federal act that prohibits any type of discrimination based on race in any real estate transaction (sale or rental) without exception.

Answer 3

Civil Act Rights of 1866

Question 4

An act contained in title VIII of the Civil Rights Act of 1968 that created protected classes of people and prohibits discrimination when selling or renting residential property when based on race, color, religion, sex, national origin, familial status, or handicap status.

Answer 4

Fair Housing Act

Question 5

A protected class as defined in the Fair Housing Act consisting of one or more individuals under age 18 living with a parent or legal guardian and pregnant women.

Answer 5

familial status

Question 6

Private entities that own, lease, lease to, or operate facilities such as restaurants, retail stores, hotels, movie theaters, private schools, convention centers, doctors offices, homeless shelters, transportation depots, zoos, funeral homes, day care centers, and recreation facilities, including sports stadiums and fitness clubs.

Answer 6

public accommodations

Question 7

The practice of refusing to make mortgage loans or issue insurance policies in specific areas for reasons other than the economic qualifications of the applicants is known as

Answer 7

redlining

Question 8

the channeling of homeseekers to particular neighborhoods or discouraging potential buyers from considering some areas

Answer 8

steering

Question 9

The Turth in Lending Act requires creditors to disclose certain information if certain credit terms, called (__?__), are included in the advertisement. These terms include the amount or percentage of down payment, number of payments, period (term) of repayment, amount of any payment, and the amount of any finance charges.

Answer 9

triggering terms

Question 10

Regulation Z, enacted by the Federal Reserve Board to enforce the (___?___) , requires that credit institutions inform borrowers of the true cost of obtaining credit.

Answer 10

Truth in Lending Act (TILA)

Question 11

1. The federal statute that prohibits a private homeowner from discriminating strictly on the basis of race if selling, renting, or leasing is the
   a. 1968 Fair Housing Act.
   b. 1866 Civil Rights Act.
   c. 1934 National Housing Act.
   d. 1968 Interstate Land Sales Full Disclosure Act.

Answer 11

B

Question 12

2. The law that requires that lenders disclose the annual percentage rate (APR) of interest is the
   a. Real Estate Settlement Procedures Act (RESPA).
   b. Federal Housing Act (FHA)
   c. Deceptive and Unfair Trade Practices Act (“Little FTC Act”)
   d. Regulati0n Z ( Truth in Lending Act).

Answer 12

D

Question 13

3. The federal 1968 Fair Housing Act prohibits discrimination based on
   a. race, color, religion, sex, national origin, familial status, or handicap status.
   b. race or age.
   c. religion, age, race, familial status, or handicap status.
   d. race, color, religion, age, or national origin.

Answer 13

A

Question 14

4. The truth in Lending Act
   a. does not affect real estate financing credit.
   b. attempts to regulate maximum interest rates charged consumers.
   c. requires disclosure of finance charges as well as annual percentage rates of interest.
   d. accomplishes all of the above.

Answer 14

C

Question 15

5. The Real Estate Settlement Procedures Act (RESPA) was enacted to
   a. establish a maximum cost for all closing items.
   b. ensure that sellers are informed regarding the amount and types of expenses expected at closing.
   c. ensure that buyers and sellers are informed regarding all costs expected at closing.
   d. establishing a minimum cost for all closing items.

Answer 15

C

Question 16

6. If requested by the borrower, and to the extent that information is available to the closing agent, the borrower must be provided with which item at least one business day before closing?
   a. HUD-1 Settlement Statement
   b. Borrower’s Special InformationBooklet
   c. Guaranteed amount of settlement costs
   d. Notice of title closing agent selection

Answer 16

A

Question 17

7. As part of the preparation for a closing, a listing broker referred a property owner to an appraiser. The appraiser completed the appraisal and charged the owner $250 which was entered on the RESPA settlement statement. The appraiser gave the listing broker $50 for the referral, which the broker accepted. According to RESPA
   a. the listing broker also must be licensed as an appraiser.
   b. the appraiser has not violated the law as long as the appraiser is state certified.
   c. both the broker and the appraiser have violated the law.
   d. the arrangement is entirely legal.

Answer 17

C

Question 18

8. Which transaction is exempt from RESPA requirement?
   a. The sale of a house where the only financing is assumption of an existing loan.
   b. A construction loan that will become a permanent loan only after the building is completed.
   c. A loan to purchase a new house in a new subdivision.
   d. An adjustable-rate mortgage loan to purchase a five-year-old residence

Answer 18

A

Question 19

11. The sales associates in a real estate office have been instructed to send all of their Spanish-speaking prospects to a new subdivision “beautifully designed with a Spanish flavor” This is an example of
    a. Steering.
    b. subordination.
    c. alienation.
    d. blockbusting.

Answer 19

A

Question 20

12. A landlord who rents a duplex to two tenants is obligated to provide
    a. working equipment for air-conditioning.
    b. an operable washer and dryer.
    c. a designated parking space.
    d. working smoke detectors.

Answer 20

D

Question 21

14. If a tenant vacates rented premises promptly when a lease or tenancy expires, the landlord must.
    a. inform the tenant within 45 days if the landlord claims part of the security deposit.
    b. return the tenant’s security deposit within 30 days or explain any exception.
    c. inform the tenant within 25 days if part of the tenant’s deposit will be claimed.
    d. inform the tenant within 30 days if part of the tenant’s deposit will be claimed.

Answer 21

D

Question 22

15. The Fair Housing Act does NOT apply to which category listed below?
    a. A property owner of a single-family home who owns two residential properties and is selling the single-family property “for sale by owner”
    b. Residential property owned by the county government
    c. Single-family home listed by a real estate sales associate.
    d. Twenty-unit multifamily apartment building.

Answer 22

A

Question 23

16. If a tenant’s rent is current and the tenant notifies the landlord of an intended absence, the landlord
    a. may not enter the tenant’s rented premises without the tenant’s consent except in an emergency.
    b. may enter only if accompanied by a second party.
    c. may enter without any restriction.
    d. may not enter the tenant’s rented premises without first obtaining a sheriff’s affidavit.

Answer 23

A

Question 24

17. How long does a landlord have to correct a noncompliance after receiving written notice from a tenant?
    a. 7 days
    b. 10 days
    c. 2 weeks
    d. 30 days

Answer 24

A

Question 25

18. A landlord must follow designated procedures in evicting a tenant. The first step in a legal eviction is to
    a. personally deliver a written notice demanding possession
    b. notify the tenant by mail of the landlord’s demand for possession.
    c. attach a notice to the door of the premises that possession of the premises is demanded.
    d. do any of the above.

Answer 25

D

Question 26

19. The law that requires that lenders furnish borrowers with a good-faith estimate of closing costs is the
    a. Truth in Lending Act.
    b. Real Estate Settlement Procedures Act.
    c. Consumer Credit Protection Act.
    d. Fair Housing and Lending Act.

Answer 26

B

Question 27

20. Which phrase may legally be included in an advertisement to sell real estate?
    a. “Cute cottage home, perfect for first time buyer”
    b. “Beautiful neighborhood rich in ethnic heritage”
    c. “Spanish-speaking community”
    d. “Quiet neighborhood, no young children please”

Answer 27

A

Question 28

Regulation Z generally applies when a credit transaction is secured by a residence.

True or false: Regulation Z also applies to farm loans

Answer 28

FALSE!

The regulation does not apply to business or commercial loans or to agricultural loans of any amount.