Section 13 TF Quiz

Question 1

With an amortized Mortgage, as the loan is paid off, the amount applied to the principal decreases and the amount applied to the interest increases.

Answer 1

A. True
[A] B. False

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[Section 13A, Slide 81]; With an amortized Mortgage, as the loan is paid off, the amount applied to the principal increases, and the amount applied to the interest decreases.

Question 2

To qualify for a Reverse Annuity Mortgage a homeowner must be 62 years old or older and have a significant amount of equity built up in their house.

Answer 2

[A] A. True
B. False

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[Section 13B, Slide 32]

Question 3

A conventional loan is a mortgage loan that is not guaranteed or insured by the government.

Answer 3

A. True
[A] B. False

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[Section 13A, Slide 26]

Question 4

The Real Estate Settlement Procedures Act (RESPA) requires that prospective buyers get a special information booklet within three business days of submitting a loan application information on closing costs to be given to loan applicant.

Answer 4

[A] A. True
B. False

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[Section 13D, Slide 108]

Question 5

Disintermediation is the normal flow of money into financial institutions from the public in the form of deposits.

Answer 5

A. True
[A] B. False

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[Section 13D, Slide 14] Intermediation is the normal flow of money into financial institutions from the public in the form of deposits. Disintermediation occurs when depositors take their money out of financial institutions because they can earn more money in other investments.

Question 6

All Savings Associations are insured by The National Credit Union Administration (NCUA)

Answer 6

A. True
[A] B. False

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[Section 13C, Slide 88]; All Savings Associations are insured by the FDIC up to $250,000 per depositor per account.

Question 7

Because an applicant needs to be able to prove that they can pay a mortgage payment for the entire life of a loan, lenders are allowed to factor in someone’s age when approving or denying them for a loan.

Answer 7

A. True
[A] B. False

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[Section 13D, Slide 81]; The Equal Credit Opportunity Act (ECOA) prohibits discrimination in loan underwriting on the basis of sex, marital status, race, religion, age, or national origin. Plus, it prohibits discriminatory treatment of income from alimony, child support, public assistance, or part-time employment. And it prohibits inquiry about, or consideration of, childbearing plans or potential for childbearing

Question 8

Straw buyers are people who consent to the use of their names and personal details by companies or people who will obtain mortgage loans but do not intend to live in the homes. This is considered mortgage fraud and is illegal.

Answer 8

[A] A. True
B. False

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[Section 13D, Slide 56]

Question 9

The Federal Reserve System was established to provide a safer and more stable monetary system and to influence the availability and cost of money and credit

Answer 9

[A] A. True
B. False

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[Section 13A, Slide 49]

Question 10

Negative amortization arises when the payment made by the borrower is less than the interest due and the difference is added to the loan balance.

Answer 10

A. True
[A] B. False

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[Section 13A, Slide 108]