Overall Flashcards by A V

Which of the following would not be an example of recasting a loan?

a) Reducing the interest rate
b) Extending the term
c) Giving a voluntary conveyance
d) Increasing the debt

Giving a Voluntary Conveyance

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What does the term “mixed-use development” mean?

a) A subdivision with common areas for all residents
b) More than one use for a single building
c) An apartment complex attached to a city park
d) An industrial park in a farming community

More than one use for a single building

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Before an option is exercised, which of these costs will the optionee incur?

Option Fee

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Under which type of loan does the portion of payment that is applied to principal increase regularly over time?

Graduated payment
Reverse annuity
Growing Equity
Renegotiable rate

Growing Equity

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What is a leasehold mortgage called that is based mostly upon a well-known tenant’s financial strength?
Purchase money loan
Credit loan
Term loan
Secondary loan

Credit Loan

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The Tax Reform Act of 1986 established an entity that can issue multiclass securities. What is this entity called?

REIT
REMIC
RESPA
REMT

REMIC

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Investor Pete specializes in obtaining properties from investors in financial difficulty. What investment strategy does Pete practice?

Arbitrage
Special situation
Opportunistic
Development

Opportunistic

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The entity holding title to a property during the term of a deed of trust is called what?

Trustee
Trustor
Beneficiary
Title company

Trustee

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Which Texas agency licenses, regulates, and examines the trust- and insurance-funded prepaid funeral contract sellers?

Office of Consumer Credit Commissioner (OCCC)
Texas Department of Banking
Department of Savings and Mortgage Lending
Texas Department of Insurance

Texas Department of Banking

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Which of the following statements is FALSE about a life estate?

Lasts only as long as the life of the owner
Upon the owner’s death, reverts to the original transferor, his or her heirs or some other designee
Cannot be mortgaged by the holder
Can be leased or sold during the holder’s lifetime

Cannot be Mortgaged by the Holder

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Who is responsible for ordering the preliminary title report?

Buyer
Escrow officer
Seller
Real estate salesperson

Escrow Officer

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What is the term used to describe a loan that is not government-backed?

Standard
Conventional
Normal
Junior

Conventional

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Which of the following statements is FALSE?

Noninstitutional lenders have few regulations.
Institutional lenders are financial intermediaries.
Noninstitutional lenders are not subject to usury law.
Institutional lenders can make FHA and VA loans.

Noninstitutional lenders are not subject to usury law.

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14 of 50 - Bill bought a property for $270,000. The value of the building on the property is $220,000. If the building has an economic life of 50 years, what is the depreciated value of the building after 5 years?

$22,000.00
$176,000.00
$198,000.00
$220,000.00

198,000.00

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RESPA applies to which of these?

Second mortgage on a time-share
First mortgage on a single-family home
Primary mortgage on an office building
Settlement charges on a shopping center

First mortgage on a single family home

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Al purchases a factory as an investment. He installs sprinklers in the building. What risk control technique is he practicing?

Avoiding
Limiting
Reducing
Accepting

Reducing

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Which of the following is not a HUD responsibility?

FHA
Ginnie Mae
FDIC
CDBG

FDIC

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What is the main advantage of a single-family home investment over other real estate investments?

Interest rates
Liquidity
Number of choices available
Management issues

Liquidity

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Which of these statements is TRUE about financing large apartment complexes?

Loan terms are not longer than 20 years.
When determining a loan amount, lenders ignore debt service as a criterion.
As the size of the building increases, the loan ratio is generally reduced.
Loan fees for large buildings are usually lower than for single-family residences.

As the size of the building increases, the loan ratio is generally reduced

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What is one of the primary purposes of the secondary mortgage market?

Issue second mortgages.
Lend money to banks.
Pay off defaulted loans.
Cycle back money to primary lenders.

Cycle back money to primary lenders

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Which of the following statements is not true about a note?

A note establishes legal evidence of the debt incurred.
It can be secured or unsecured.
A note must be tied to a mortgage to be legal.
It can be interest-only or installment.

A note must be tied to a mortgage to be legal

Which type of property is most benefited by the income capitalization approach to estimating value?

Single-family home
School
Duplex
Apartment building

Apartment Building

What percent of the REIT’s assets must be made up of cash, real estate, mortgage notes, or government securities?

30
50
75
95

The Consumer Financial Protection Bureau (CFPB) requires the use of the Closing Disclosure (CD) for which types of transactions?

Commercial transactions
All real estate transactions
Residential transactions financed by a federally-related loan
Only FHA and VA loan transactions

Residential transactions financed by a federally-related loan

Alex bought a property valued at $850,000 which has an annual net operating income of $102,500. What is the capitalization rate? 0. 09 0. 10 0. 11 0. 12

0.12

Which of the following lease options would be the least favorable to the tenant? Right of first refusal Equity participation Lease renewal Tenant relocation

Tenant relocation

The cost recovery period for land improvements is how long? 15 years 25 years 27.5 years 39 years

15 years

Jim Smith wants to purchase a vacation home and have it double as an investment. What is the maximum amount of time per year that Jim and his family can stay in the home and still be able to take the depreciation? 14 days 30 days 45 days 60 days

14 days

Which of the following would probably not be a use of a junior loan? Purchase of property through the VA Home improvement Down payment on conventional loan Land improvement

Purchase of property through the VA

The successful bidder at a judicial foreclosure sale receives which of these documents? Deed in Lieu of Foreclosure Certificate of Sale Trustee’s Deed Warranty Deed

Certificate of Sale

Which of the following is typically not a short-term mortgage loan? Single-family home loan Construction loan Home improvement loan Manufactured home loan

Single family home loan

Which of the following default types would be considered a technical default? Failure to make payments of principal and interest Failure to pay taxes Failure to keep property in good repair Failure to make hazard insurance premiums

Failure to keep property in good repair

Which statement about syndication is FALSE? Most investors belonging to syndicates invest a lot of their own money. Syndication offers small investors the opportunity to invest in real estate ventures that would otherwise be outside their financial means. A typical real estate syndicate combines the money of individual investors with the management of a sponsor. A syndicate is able to acquire real estate that could not be purchased by an individual alone.

Most investors belonging to syndicates invest a lot of their own money.

What is the most important aspect of a credit report? It shows how many accounts a person has. It shows the number of late payments. It shows the outstanding balances on all the borrower's accounts. It shows the borrower's attitude about handling credit and debt.

It shows the borrower's attitude about handling credit and debt.

Fannie Mae and Freddie Mac are able to replenish their own funds by doing what? Borrowing from the Federal Reserve Bank Borrowing from each other Selling mortgage-backed securities Requesting grant funds through HUD

Selling mortgage-backed securities

How is the payoff of a construction loan normally accomplished? With a takeout loan With cash flow generated from an income property Through the sale of the completed project By floating a bond

With a takeout loan

Sam Frank is a retired Army officer who wants to purchase a new home using a VA loan. In 2000, Sam used his VA guarantee of $36,000 when he purchased his current home. Based on the VA’s maximum guarantee of $104,250 and his partial eligibility, how much of a loan can Sam get with no money down? $68,250 $155,000 $208,500 $273,000

$273,000

The type of estate that has a definite beginning and ending date is known as what? Estate at will Estate from year to year Life estate Estate for years

Estate for years

n Texas, what is the maximum late payment penalty allowed? 10% 5% 15% no restrictions

No restrictions

Mary is getting a $120,000 loan at 6.5 percent and will pay 3 discount points. What will the effective interest rate be? 0. 0665 0. 0675 0. 06875 0. 0695

0.06875

Which statement is not true about the Farm Credit System? It is designed to serve the needs of farmers and ranchers. FCS banks lend money from their deposits. It helps people buy rural homes. FCS banks offer crop insurance.

FCS banks lend money from their deposits

Why do lenders collect reserve funds at the property closing? To get a higher yield on their investment To be sure money will be available for tax and insurance payments To have extra money that will accrue interest To hedge against increases in taxes or insurance premiums

To be sure money will be available for tax and insurance payments

What are the steps in the sales comparison approach to estimating value? Select nearby comparables, adjust the subject property for the differences and estimate the value. Obtain price data, apply the collected data to the subject and estimate the value. Choose appropriate comparable properties, adjust the comparables for the differences and estimate the value. Identify sale prices, apply an appreciate rate and estimate the value

Choose appropriate comparable properties, adjust the comparables for the differences and estimate the value

What is the term used for an agreement between the borrower and a permanent lender relative to future delivery of a takeout loan upon completion of construction? Construction contract Building loan agreement Take-out commitment Tri-party agreement

Take-out commitment

Who is the person who grants approval for the loan, rejects the loan, or in some cases, agrees to approve the loan if certain conditions are met? Lender Seller Processor Underwriter

Underwriter

What is a disadvantage of a graduated-payment loan? The borrower has no control over the payment increases. This plan could result in negative amortization. Graduated payment loans cannot be refinanced. A borrower cannot sell the property until the loan is converted.

This plan could result in negative amortization

After analyzing the neighborhood, an appraiser will study all of the physical aspects of the specific property being appraised except for which of the following? Highway accessibility Arrangement and design Visual appeal Physical durability

Highway accesibility

Commercial banks participate in real estate finance though all but which of the following methods? Trust department operations Secondary mortgage market Mortgage banker activities Ownership of other lending enterprises

Secondary mortgage market

With which kind of lease does the tenant not know the actual change in the rent amount in advance? Flat Step-up Percentage Indexed

Indexed

What is the maximum annual amount a single taxpayer can give to a person without incurring a gift tax liability? $10,000.00 $12,000.00 $14,000.00 $26,000.00

$14,000.00