Financing #6 Flashcards
In which form of co-ownership is a person’s ownership inheritable?
tenancy in common
Two essential elements of a deed are the ______.
Grantor’s signature and conveyance clause
If a private individual owner doesn’t own more than three single-family homes at one time, which exemption from the Fair Housing Act could apply?
Single-family housing sold or rented without the use of a broker
Binding acceptance
happens when a signed contract is delivered according to the delivery procedures and deadline outlined in the contract.
Tristan’s offer has been signed by all parties and delivered to the seller. This means that ______ has occurred.
Binding acceptance
Beneficiary interest in land that’s part of a land trust is considered ______.
personal property
Morty, a land surveyor, was called out to survey a property. After doing some research, he located the legal description for the property in question. Now, if he could just find the point of beginning located at the iron pin on the southerly line of state route 117, 30 feet east of the oak tree next to Bear Creek. What type of legal description is Morty working with?
metes and boundes
What does a CMA determine?
Market price range
A “homes for sale” magazine contains the following ad: “Cozy two-bedroom starter home, neat and clean, ready for move-in. $140,000. Low down payment and easy financing!” Which of these statements is true?
The ad complies with TILA because it doesn’t contain any of the trigger terms that require full disclosure of all financing terms.
Which of these professional activities is NOT covered by the Fair Housing Act?
Vickie’s staging company works with investor clients to stage vacant properties.
Which of these statements about frontage is true?
The frontage for a lot that’s 120 feet by 85 feet is 120 feet.
Which of the following best describes a net listing?
The seller specifies a desired price for the property and agrees to pay the broker any amount received that’s more than that price.
Two real estate firms in one small town, Vineyard Realty and Homestead Homes, agreed to charge the same commission rate to avoid the possibility of clients selecting a firm based simply on price. What specific federal legislation prohibits this?
The Sherman Antitrust Act of 1890
federal fair housing acts 1968
protects people from discrimination when they are renting or buying a home, getting a mortgage, seeking housing assistance, or engaging in other housing-related activities.
The Fair Housing Act prohibits discrimination in housing because of:
Race
Color
National Origin
Religion
Sex (including gender identity and sexual orientation)
Familial Status
Disability
equal opportunity
prohibits discrimination in any aspect of a credit transaction
the claynton acts of 1914
Intended to strengthen earlier antitrust legislation, the act prohibits anticompetitive mergers, predatory and discriminatory pricing, and other forms of unethical corporate behavior.
The Federal Trade Commission Act of 1914
empowers the agency to investigate and prevent unfair methods of competition, and unfair or deceptive acts or practices affecting commerce. This creates the Agency’s two primary missions: protecting competition and protecting consumers.
What title guarantees will Jody have when she buys a property at a foreclosure auction?
the convenant of sesin
Moira has delivered a counter-offer to some potential buyers for her property. Which of these best states the time frame for the buyers’ acceptance?
The buyers must respond by the time and date specified in the counter-offer
Housing for Older Persons Act of 1995
The prohibition against discrimination based on familial status became effective March 12, 1989. The Act contained a provision exempting “senior” housing from the prohibition against familial status discrimination.
In which of these situations has the licensee compromised the duties of loyalty and disclosure?
Nate didn’t tell his client about a conflict of interest related to the sale of his client’s property.
Equity skimming
occurs when an investor receives title to a property, and usually rents out the home but doesn’t make the mortgage payments. When equity skimming fraud like this occurs, houses usually end up in foreclosure.
Joan and Martha are entering into an 18-month lease with landlord Roger. Which of these statements is true?
Leases for periods of more than one year must be in writing.
Barry is a property manager for a new building and is analyzing data so he can set rent amounts. Which statement best summarizes the need to appropriately set these amounts?
Setting rents either too high or too low can negatively impact the property manager’s primary responsibility of producing the greatest net return for the owner.
A property owner wants to achieve an annual return on investment (ROI) of at least 10%. He paid $500,000 for his rental property and experienced an annual cash flow of $45,000. Did he achieve his desired ROI?
No, the property owner experienced an ROI of 9%.
All of the following are common property manager duties EXCEPT ______.
making mortgage payments
an appraisal contingency
gives the buyer the opportunity to renegotiate the price if the appraisal comes in less than the agreed-upon purchase price. This is an important contingency in an area where values are shifting.
Hannah wasn’t able to get the financing to open her boutique, so her mother became a silent partner and provided additional cash. Hannah and her mother have an agreement that states Hannah’s mother can’t be held financially or legally liable if there are any problems with the store. What type of contract clause is this?
indemnifications
Hannah wasn’t able to get the financing to open her boutique, so her mother became a silent partner and provided additional cash. Hannah and her mother have an agreement that states Hannah’s mother can’t be held financially or legally liable if there are any problems with the store. What type of contract clause is this?
indemnifications
Rescission can be ______ agreement to cancel a contract.
mutual
Rescission can be ______ agreement to cancel a contract.
mutual
Eleanor is moving from a starter home into something a little larger. Her agent has cautioned her against making the offer on the new place contingent on the sale of Eleanor’s starter home. Why the caution?
Sellers would view an offer without that contingency as a stronger offer.
recession
is a definitive end of the parties’ commitments under an agreement—one in which the parties are returned to their pre-contract status. Each party gives back anything received under the contract.
Loan to value ratio LTV
Is the ratio of the loan amount to the property’s value sales price or price value the
lenders use loan to validation to determine required down payment amounts when initially written mortgage loans or when homeowners apply for a home equity loan or a home equity line of credit
Interest
Is a fee pay back to the lender for the use of its money the amount of interest paid with each mortgage payments typically decrease over the life of the mortgage
Anual porcentaje rate APR
Is a measure of both the interest rate and other fees associated with a mortgage loan
Private mortgage insurance PMI
Unconventional loans when the down payment is less than 20% of the loan to valid ratio is in exceed of 80%, the loan with the LTB in excess of 80% don’t confirm to Frannie Mae Freddie mcgowans so lenders may require PMI to offset the risk
PMI protects the lenders in case of borrower defaults
A promissory note
Is the borrower promise to repay the mortgage loan that promissory notes are negotiable instruments, which means they can be transferred to another holder
The deed of trust involves 3 parties
The trustor (borrower), the beneficiary (the lender) and the trustee (and independent 3rd part who hold the deed of trust)
A mortgage involves 2 partes
The lender and borrower
The defeasance clause
Orders the lender or trusted to immediately release full title of the Barbra once the loan is paid in full dot the lander is then prevented from pursuing additional payment after the payoff
Acceleration clause
Makes the entire deadly if there’s borrowed default. Before a foreclosure occurs, lenders must send an acceleration letter to the borrower ( often not said until 2 or 3 months in default)
A due on sale ( also known as alienation clause )
Requires the borrower to repay the loan when transferring ownership to another
Conventional loans______ government issue or guarantee
Aren’t
The Federal housing administration (FHA)
Insured lenders against laws in case of borrower default
The USDA Farm Service Agency (FSA)
Offers direct guarantee loans to Farmers and ranchers and for rural housing. Congressional appropriation funds these loans
Rural development loans
Our government loans specifically for family farms in rural home financing. They offer a longer payback period to reduce monthly payments
Amortized loan
Is one in which the loan principle is paid down over the life of the loan
A fully amortized loan
Will be paid in full after the last schedule loan payment or sooner if the borrower makes additional principal payments during the loan term that the monthly principle interest payment amount is the same each month that the principal portion of the payment increases each month, while the interest portion decreases
A partially amortized loan
Includes partial amortization over the long term and a balloon payment at the end of the term, where the borrower pays off the loan in one lump sum
A negative amortization
May be experience with some arms this occurs when a payment fails to cover the amount of interest due. When this happens the difference between interest owed and interest rate is added to the loan principle
An adjustable rate mortgages (ARM)
Is one in which the interest rate fluctuates based on some selected economic Index
A bridge loan or swing loan
Is a temporary, short-term loan that provides funds on to buyers can obtain permanent financing. Some borrowers who qualify financially May obtain a bridge loan when their current home hasn’t yet sold but they are ready to purchase a new one that the Bridgestone basically covers the down payment
A purchase money mortgage
Is alona seller issues to the buyer as part of the purchase transaction that this typically occurs in situations where the buyer cannot qualify for mortgage through traditional means
A land contracts/contract for deed
Requires the buyer to make installment payments to the seller for property purchase that the seller retains the title while buyers gets equitable title
A wrap around mortgage
The seller holds a mortgage that wraps the new buyers mortgage around the seller’s existing mortgage that the seller continues to make payments on the first mortgage, and buyers makes payments to the seller on the wraparound mortgage
The truth in lending act (TILA)
Requires lenders to disclose credit terms and conditions when advertising trigger loan terms, so as not to mislead consumers
Wrap around mortgage
The seller holds a mortgage that wraps the new buyer mortgage around the seller’s existing mortgage. The seller continues to make payments on the first mortgage, and buyer makes payments to the seller on the wraparound mortgage
The real estate settlement procedures act (r e s p a)
Is a consumer protection status designed to protect home buyers from uncrupulous landing and settlement practices
Straw buyers
Concealed to real identity behind someone else’s name and credit
Illegal property flipping
Property falsely aprize at a higher value, then quickly sold, with the buyer taking the equity in the property
Equity scamming
When investor receives title to a property often by using a straw buyer doesn’t make the mortgage payments, and usually rent out the home until foreclosure ocures
Predatory lending
Is an unfair abusive lending to buyers. Lenders imposed deceptive that an exploded practices to take advantage of consumers to increase their debt won’t financing risky loans
Fraudulent lending practices
Take advantage of consumers, encouraging that, don’t consider for the ability, encourage multiple refinancing, hide fees for borrowers, and often occurrence in the subreme loan market
The Equal credit opportunity act (ECOA) of 1974
Prohibits lenders from making credit unavailable or offering less favorable terms based on protected class status raise, call her, religion, national (religion, sex, marital status, or income source) versus credit worthiness
Trigger terms
And adds that will require the full disclosure of all terms includes down payment, payment amount, number of payments, interest rates (other than APR)
Regulation z
Requires mortgage lenders to follow tila disclosure requirements for Real estate advertisements that includes credit terms
The loan estimate capital (LE)
To applicants within three business day of loan application the loan estimate provide spiders with the cost they are likely to pay at settlement and discloses the mortgage loan specifics, such as key features, cause, and risk
The closing disclosure (CD)
Linda must provide at least three business days before closing, provides final loan details, including the loan terms, projected monthly payments, feeds and other closing costs
Usury
Is lending money at an excessive illegal rate
Loan underwriters
Analyze The barbers credit, capacity, and collateral. They will review loan documentation to determine the borrower’s ability to repay the loan capacity, ensure that the property value is adequate to support the loan collateral, and verify the borrower’s financial radio credit
The housing ration
Is The barbers projected monthly housing expense principal, interest, taxes, insurance, second lanes, and association fees divided by the income
Conventional loans are typically 25% to 28%
FHA loans are typically 31% to 40%
VA loans are typically can’t exceed 41%
The debt Ratio
Is the total of all the buyer’s debt obligations divided by the income
The conventional loan typically is 33% to 36%
The FHA loan typically is 43% to 50%
The VA loan is typically can exceed the 41%
Credit scores
Conventional loans typically require credit score of $620 and above. FHA barbers must have a minimum credit score of $580 to qualify for a 3.5% down payment, barbers with credit score between $500 and 579 may have to put down as much as 10%. Barbara with higher credit scores and other compensating factors such as cash reserves or additional income sources may qualify for higher front and back and loan end ratios
Inflated appraisals
And a price is secretly works with a borrower and provides a misleading apprisal report to the lender
Equity
is the difference between what you owe on your mortgage and what your home is currently worth. If you owe $150,000 on your mortgage loan and your home is worth $200,000, you have $50,000 of equity in your home.Dec 3, 2020
