property ownership #5 Flashcards
Real estate professionals handle many documents related to real estate transactions. Which one of the items listed below is one of the most important in detecting mortgage fraud?
The original sales agreement and any addenda
Celia was obtaining a conventional loan, and she put $50,000 down as a down payment. Why might her lender also require her to obtain private mortgage insurance?
Her down payment of $50,000 isn’t at least 20% of the purchase price.
Upon examination of his mortgage document, Jared finds a clause stating he will owe additional interest if he pays off his loan within one year of the loan origination date. What type of penalty does this describe?
Prepayment
Your buyer client, Percy, wants to start searching for his dream house and knows he needs to obtain financing to accomplish that. What’s his first step?
Obtain a pre-qualification letter.
Traditionally, lenders’ qualifying mortgage rules use a range of percentages to qualify for both the housing debt-to-income ratio and the total debt-to-income ratio. What are those ratio ranges?
25% to 28% for housing; 33% to 36% for total debt
When the lender gathers all kinds of information about the borrower’s assets, debts, income, employment history, and pulls their credit report, the buyer is ___________________.
Making an application for a loan
Manuel is selling his home to Selena. He has an existing loan that he’ll continue to make payments on, and he’s extending credit to Selena for the balance of the purchase price. She will make monthly payments to him. What type of financing are the parties using in this transaction?
Wrap-around loan
Which practice involves talking the consumer into refinancing over and over so a lender can charge fees?
Loan flipping
In the eyes of a lender, when financing a residence, what advantage does an investor have over owner-occupied borrowers?
Investors can use rental income to qualify.
Lawrence is a buyer closing on a home for which he’s obtaining financing. Which document will give Lawrence an estimate of the costs he’ll likely pay at closing?
Loan Estimate
Elaina and Allen just purchased a home using a deed of trust. Which of the following is most likely true about their home loan?
A trustee will hold the title until the loan is paid.
When considering loan risk, which two items will lenders consider in equal measure?
Borrower and property
Fred is an agricultural lender who helps the ranchers and farmers in his community by providing credit for purchasing land, making repairs to their buildings and improving their agricultural property. He’s able to do this in part because of the ______ offered by the USDA Farm Service Agency.
Guaranteed loans
An inflated appraisal
occurs when an appraiser intentionally submits a misleading report to a lender that indicates an inflated property value. Inflated appraisals are illegal and can get both of these guys in trouble.
Mike’s been friends with Tim since college. They often work together: Mike flips houses and Tim’s an appraiser that he uses frequently. It works out great for both friends and Mike definitely gets a better appraised value on the flips Tim handles. For every appraisal Tim handles for him, Mike gives him a $100 gift card. In what illegal practice does it sound like they’re engaging?
Falsely inflating appraisals
Which entity services rural development loans?
FSA
The Farm Service Agency, an agency of the USDA, administers this program.
Tanner, a property owner, wants Gina, a real estate licensee, to manage the property he owns while he’s living out of state for a few years. In return, Tanner will pay Gina a flat monthly fee. What type of agreement must be in place between Tanner and Gina?
property management agreement
is a short-term loan used to bridge the gap between buying a home and selling your previous one. Sometimes you want to buy before you sell, meaning you don’t have the profit from the sale to apply to your new home’s down payment.
a bridge loan
addendum
modifies an original lease or purchase agreement. Items in the addendum could reflect a change in the agreed-upon price, what is included in the transfer of property, what improvements must be made before the home is paid for, or any other agreed-upon requests or responsibilities
is an employment contract between a property owner and a real estate broker. It allows the broker to act as a listing agent and find a buyer for the property on the seller’s terms.
a listing agreement
is a legal, binding contract outlining the terms under which one party agrees to rent property owned by another party. The lease guarantees the tenant (also known as the lessee) use of the property and guarantees the lessor—the property owner or landlord—regular payments for a specified period in exchange
a lease aggreement
is a contract of…., usually written, between the owner of a property and a renter who desires to have temporary possession of the property; it is distinguished from a lease, which is more typically for a fixed term.
rental agreement
Who are the parties to a property management agreement?
The property manager and property owner
means that a licensee or brokerage firm uses trust funds for personal or operating purposes
Conversion
Hal and Sara own a 212-acre farm. Their property is landlocked, but they have permitted water rights to use the stream located six miles away for irrigation purposes. What kind of water rights do they hold?
Prior appropriation
he doctrine of prior appropriation grants water rights based on need, not adjacency. Hal and Sara likely live in the western part of the U.S. where many states subscribe to this doctrine.
What’s the best definition of land?
The earth’s surface, extending downward to the center of the earth and upward to infinity, including permanently attached natural objects
Harmony is looking at the legal description on her purchase contract. It mentions that the plat of her property is recorded in Map Book 12, page 14, at the county courthouse. What type of legal description is this?
lots and block
Which of these is the best definition of real estate?
Land, plus all things permanently attached to it naturally or artificially
Clay is interested in purchasing a condo about a mile from the city center. He went to the city records office to review everything that was filed by the condo developer. In the condominium declaration, he saw how ownership of the common areas is shared among the ______.
Unit owners
What forms the boundaries of a township?
Township lines and range lines
A lot measuring 108,900 square feet is for sale. How many acres is this?
Two-and-a-half
Sheila owns a timeshare that gives her ownership of the property for a certain number of weeks per year in perpetuity. What type of timeshare is this?
his is a timeshare estate, which conveys ownership, not simply the right to use a property.
What’s the best definition of real property?
Real estate, plus all of the interests, benefits, and rights included in ownership
A professional, on-site measurement of the lot lines and dimensions of a property is known as ______.
a survey
Stan and Emile are arguing over their shared lot line, since Stan thinks that Emile planted a privet hedge on Stan’s property. Stan filed a civil legal action against Emile. Which of these would the court use to determine the actual lot line?
Legal descriptions of both properties
Ashton, an appraiser, is estimating value using the sales comparison approach. He applies more weight to two comparables over several others he used. What process is he utilizing?
Reconciliation
What’s the role of the mortgage contingency in a sales contract?
Documents the type of and timeline for financing, and outlines what to do if financing falls through.
Which of these statements about the homeowner’s right of redemption is true?
Rights of redemption window with REOs may have expired.
Which of the following features is most likely to be the cause of an adjustment to a comparable when preparing a CMA?
Busy street
Rhonda and her husband filed for bankruptcy five years ago. They want to purchase a new house but don’t have the best credit score. They’ve decided to buy the home using an FHA loan. Which of these is a true statement?
A minimum down payment of 3.5% is required
