Laws

Question 1

FDIC Insurance

Answer 1

$250,000 per person, per ownership category

Question 1

Purpose of Chapter 7 Bankruptcy

Answer 1

Liquidation

Question 2

Purpose of Chapter 13 Bankruptcy

Answer 2

Repayment

Question 3

Purpose of Chapter 11 Bankruptcy

Answer 3

Reorganization

Question 4

Who can file ch 7?

Answer 4

Individuals and businesses

Question 5

Who can file ch 13?

Answer 5

Individuals only

Question 6

Who can file ch 11?

Answer 6

Businesses and rarely individuals

Question 7

Who is eligible for ch 7?

Answer 7

Those with income below a certain threshold

Question 8

Who is eligible for ch 13?

Answer 8

those with debt below a certain threshold

Question 9

Who is eligible for ch 11?

Answer 9

No debt or income requirements

Question 10

What happens to debt in a ch 7 bankruptcy?

Answer 10

Unsecured debt is eliminated

Secured debt - assets are sold off

Question 11

What happens to debt in a ch 13 bankruptcy?

Answer 11

It is paid back over time through the repayment plan

Question 12

What happens to debt in a ch 11 bankruptcy?

Answer 12

It is restructured and paid back over time

Question 13

Which bankruptcies can stop a foreclosure?

Answer 13

13 & 11. Ch. 7 can delay it.

Question 14

How long does a ch 7 bankruptcy take?

Answer 14

4-6 months

Question 15

How long does a ch 13 bankruptcy take?

Answer 15

3-5 years

Question 16

How long does a ch 11 bankruptcy take?

Answer 16

6 months to 2 years

Question 17

How long does a ch 7 bankruptcy stay on a credit report?

Answer 17

10 years

Question 18

How long does a ch 13 bankruptcy stay on a credit report?

Answer 18

7 years

Question 19

How long does a ch 11 bankruptcy stay on a credit report?

Answer 19

10 years

Question 20

Consumer Credit Protection Act

Answer 20

Right to know costs and terms of credit

Question 21

Equal Credit Opportunity Act

Answer 21

Right to fair opportunity to obtain credit

Question 22

Fair Credit Reporting Act

Answer 22

Right to know what’s in your credit file

Question 23

Fair Credit Billing Act

Answer 23

Right to have billing mistakes solved

Question 24

Fair Debt Collection Practices Act

Answer 24

Right to be protected from collection agencies

Question 25

FICO score categories

Answer 25

1. Payment history 2. Amounts owed 3. Length of credit history 4. New Credit 5. Credit mix

Question 26

Portion of FICO score attributed to Payment History

Answer 26

35%

Question 27

Portion of FICO score attributed to Amounts Owed

Answer 27

30%

Question 28

Portion of FICO score attributed to length of credit history

Answer 28

15%

Question 29

Portion of FICO score attributed to new credit

Answer 29

10%

Question 30

Portion of FICO score attributed to credit mix

Answer 30

10%

Question 31

Poor credit score

Answer 31

<580

Question 32

Fair credit score

Answer 32

580-669

Question 33

Good credit score

Answer 33

670-739

Question 34

Very good credit score

Answer 34

740-799

Question 35

Exceptional credit score

Answer 35

800+

Question 36

Origination points

Answer 36

Points are a % of the amount borrowed, which are added to the mortgage to lower the interest rate or improve terms

Question 37

When rates are low, what rate is advisable?

Answer 37

Fixed rate

Question 38

When rates are high/expected to go down or the homeowner is not planning on keeping the house long-term, what rate is advisable

Answer 38

variable rate

Question 39

Conventional mortgage

Answer 39

home loan below $766,500

Question 40

Jumbo mortgage

Answer 40

home loan above $766,500 that commands a higher interest rate

Question 41

PMI

Answer 41

private mortgage insurance for borrowers who put down less than 20% of the value of a home

Question 42

How do you eliminate PMI?

Answer 42

Satisfy 2 requirements: 1. 20% equity 2. 2 years of on-time payments

Question 43

Balloon mortgage

Answer 43

home loan in which a large portion of the borrowed principal is repaid in a single payment at the end of the loan period

Question 44

FHA

Answer 44

Federal Housing Administration

Question 45

VA

Answer 45

Veterans Administration

Question 46

USDA

Answer 46

United States Department of Agriculture

Question 47

PMI for gov't mortgages programs

Answer 47

VA & USDA - none FHA - 11 years or loan duration

Question 48

Down payment for gov't mortgage programs

Answer 48

VA & USDA: 0% FHA: 3.5-20%

Question 49

Identify which loan type can only issue fixed rate mortgages

Answer 49

USDA

Question 50

Identify the fees for gov't mortgage programs.

Answer 50

VA: 2.3-3.6%, which is waived for disabled vets FHA: none USDA: 1% fee upfront, then an annual fee of 0.35%)

Question 51

Housing Cost Ratio

Answer 51

PITI / Gross Income < 28%

Question 52

Total Debt Ratio

Answer 52

(PITI + Other Debt) / Gross Income < 36%

Question 53

Debt Ratio

Answer 53

Debt / Gross Income < 20%