IMPORTO 2 Flashcards
Judicial vs non-judicial foreclosure
Judicial - go to court
Non-judicial - don’t go to court
Essentially, a judicial foreclosure means that the lender goes to court to get a judgment to foreclose on your home, while a non-judicial foreclosure means that the lender does not need to go to court
6 client Duties (CAL DOC)
Care, Accounting, Loyalty, Disclosure, Obedience, Confidentiality
3 customers duties (FHA)
Fair, Honest, Accurate
The covenant in a deed which states that the grantor is the owner and has the right to convey the title is called ____
covenant of seisin.
T/F: Exclusive brokerage agreements (including property management agreements between a landlord and a manager) must be in writing and have an expiration date.
True
Exclusive brokerage agreements (including property management agreements between a landlord and a manager) must be in writing and have an expiration date.
A deed of trust is the modern form of _____. In practical effect, there is little difference between a mortgage loan and a loan secured by a deed of trust.
Mortgage
A deed of trust is the modern form of mortgage. In practical effect, there is little difference between a mortgage loan and a loan secured by a deed of trust.
_______ was established by the National Housing Act specifically to start the secondary mortgage market and is the largest purchaser in the secondary market
Fannie Mae
Fannie mae largest secondary market buyer
Fannie Mae stands for the Federal National Mortgage Association (FNMA). It was established by the National Housing Act specifically to start the secondary mortgage market, thus attracting more investors and funds to help support home ownership.
Under a land contract, the seller of the land is the ____. The buyer is the _____.
Seller is Vendor
Buyer is Vendee
The seller of the land is the vendor. They buyer is the vendee.
All real estate sales must be reported to the Internal Revenue Service after closing. The sale must be reported on a form ____
a Form-1099.
The _______ principle is the reason people are cautioned against owning the most expensive house in the neighborhood.
Regression principal
The regression principle is the reason people are cautioned against owning the most expensive house in the neighborhood. It’s an observation of the fact that lower priced homes (and commercial buildings) have a much greater downward pull on the value of higher end properties than the other way around.
T/F: Managing brokers are not required to identify their agents on signs or other general advertising.
True
In ads, managing broker doesn’t need to ID sponsored agent
Is a Contract for deed considered a conventional loan?
No
contract for deed not a conventional loan
(Commercial bank’s 15 year loan would be “conventional loan” tho)
How to remember Fannie Mae is largest purchaser in secondary market?
“The trannys say “Mortgages are gay”, so they all got bought by Fannie Mae”
Within how many days does a change in managing brokers need to be reported to the IDFPR?
15 days
within 15 days
Any changes in managing brokers, branch or principal offices MUST BE reported in writing to IDFPR within 15 days after the change.
T/F: When the lender under a deed of trust requires title insurance, the trustor (borrower) would be the most likely person to pay for it
True
Borrower (or trustor) pay for title insurance
T/F: The beneficiary is the lender in a Deed of Trust.
True
The beneficiary is the lender in a Deed of Trust.
T/F: To create a joint tenancy relationship in the ownership of real estate, there must be unities of Time (as well as other things)
True
possession, time, interest, and title.
This essentially means that all parties to the agreement share equally in all aspects of the property, including the length of time it’s been held. That means if one party sells or transfers interest in a joint tenancy relationship, his or her place is taken by another in the same capacity.
T/F: Renting a 1-4 unit apartment if occupied by the owner or family member constitutes an exception to Illinois fair housing laws.
True
Family counts too
How do u remember a that a change in managing brokers needs to be reported within 15 days
“Man-a-ging broker”
3 syllables
3*5 = 15
Any changes in managing brokers, branch or principal offices MUST BE reported in writing to IDFPR within 15 days after the change.
T/F: With a wraparound mortgage, a seller sells a property to a buyer, but the seller doesn’t pay off an existing mortgage.
True
Seller doesn’t pay off existing mortgage
A wraparound mortgage is a new mortgage that literally wraps around an old mortgage. A seller sells a property to a buyer, but the seller doesn’t pay off an existing mortgage. The buyer gives a new, larger mortgage to the seller.
This new mortgage includes the amount due on the original mortgage. The buyer makes payments on the new mortgage to the seller. The seller, in turn, makes payments on the old mortgage to the lender. This mortgage is used when the old mortgage won’t be paid off at the time of the sale of the property.
T/F: Property management agreements must be in writing and have an expiration date.
True
Exclusive brokerage agreements (including property management agreements between a landlord and a manager) must be in writing and have an expiration date.
T/F: There are no federal taxes on real property. The Constitution of the United States specifically prohibits such taxes.
True
There are no federal taxes on real property. The Constitution of the United States specifically prohibits such taxes.
The federal government does, however, tax income derived from real property and gains realized on the sale of real property. The federal government can impose a tax lien against property for failure to pay any tax due the Internal Revenue Service.
Under a land contract, what is the buyer called? What is the seller called?
Buyer - Vendee
Seller - Vendor
The seller of the land is the vendor. They buyer is the vendee.
T/F: In order to create joint tenancy, some form of relationship must exist between the parties involved, whether business, spousal or other.
True
So ppl who receive gifts would likely receive as TIC
In order to create joint tenancy, some form of relationship must exist between the parties involved, whether business, spousal or other.
Which of these have a 3 day right of rescission:
residential first mortgages
commercial loans
agricultural loans
a home improvement loan for a principal residence
a home improvement loan for a principal residence only
not other 3
There is NOT a right of rescission for residential first mortgages, commercial loans or agricultural loans.
T/F: The payment on a graduated payment mortgage usually has gradual increases for the first few years and then levels out.
Payments usually graduate for the first few years and then level out.
If a lender foreclosed on a property, what kind of deed would it use to prohibit any future title claims against the lender
Quitclaim deed
A quitclaim deed is where the seller makes no promises whatsoever - this would protect the lender from future title claims.
Is the following statements is true regarding security for a debt:
The mortgage secures the note
Yes
The mortgage secures the note
A note “creates” the debt. (B) The mortgage is given as security for the note thus giving the lender (mortgagee) the right to foreclose. (A) is reversed. The deed (C) & (D) is a document for transferring title, not a finance instrument.
In foreclosure, after the mortgage and all other debts are paid, to whom would the excess go?
A » The owner who was foreclosed upon
B » Mortgagee
C » Court
D » Sheriff
A » The owner who was foreclosed upon
The property is sold and the proceeds are used to pay debts. (A) After the debts are paid, any excess money would go to the owner. (B) The mortgagee is the lender. The excess money would not go to the (C) court or the (D) sheriff.
What is true about both FHA and VA loans?
A » Both require a certificate of eligibility
B » Both require owner occupancy
C » Both require MIP insurance
D » Both allow non-qualifying assumptions
B » Both require owner occupancy
(B) FHA and VA do require owner occupancy of the property being purchased. (A) Only VA loans require a certificate of eligibility. (C) Only FHA loans require MIP insurance. (D) Neither FHA or VA loans allow non-qualifying assumptions on the newer loans.
What is an advantage for a borrower who chooses to pay private mortgage insurance (PMI) in receiving a loan?
A » The insurance is tax deductible
B » The borrower can purchase with a lower down payment
C » The borrower receives a lower interest rate
D » The borrower only pays this one time at closing
B » The borrower can purchase with a lower down payment
(B) Private mortgage insurance (PMI) is required on conventional loans when the borrower puts less than 20% down. By paying PMI, the borrower can purchase with a lower downpayment. (A) PMI is not tax deductible. (C) The borrower paying discount points is what lowers the interest rate, not paying PMI. (D) The PMI is not a one time cost only; the borrower pays monthly on the PMI.
Are oral contracts for the sale of real estate enforceable?
No
The statute of frauds says that oral contracts for the sale of real estate are unenforceable.
The Equal Credit Opportunity Act prohibits discrimination based on:
A » sexual orientation
B » a person being a minor
C » a person being a senior citizen
D » a person’s credit rating
C » a person being a senior citizen
A persons age cannot be used for discrimination in making a loan, assuming the person is of legal age. (A) Sexual orientation is not covered under this act. (B) A minor is not of legal age and is not covered under this act regarding lenders. (D) A lender can discriminate based on a person`s credit rating.
