Unit 1

Question 1

CMA - Comparative Market Analysis

Answer 1

CMAs are developed
By collecting information concerning real estate activities in the area, including recent sales of similar properties, currently offered for sale and recently expired listings. CMA is a marketing tool and may not be referred to or presented as an appraisal.

Question 2

Mortgage loan Originator

Answer 2

Anyone who takes residential mortgage loan applications or offers to negotiate the terms of residential mortgage loan applications for compensation must be licensed as a mortgage loan originator (MLO). A real estate licensee may not operate as a mortgage loan originator unless the real estate licensee also holds a mortgage loan originator license.

Question 3

DEPRECIATION

Answer 3

The loss in value of a property due to various factors, including wear and tear or changing market conditions. Economic obsolescence, functional obsolescence and physical deterioration are all types of depreciation.

Question 4

HELOC

Answer 4

Home Equity Line Of Credit; a type of revolving loan where homeowners can borrow against the equity in their property. A HELOC is a flexible source of funds that uses the property as collateral as needed, as opposed to a home equity loan, which is a fixed amount.

Question 5

Net Listing

Answer 5

A listing agreement that allows the agent to keep any amount of money that exceeds the desired sale price established by the seller.

Question 6

Superfund

Answer 6

A federal program established to address the cleanup and remediation of contaminated hazardous waste sites across the United States by providing funds to facilitate the cleanup efforts

Question 7

Point

Answer 7

A percentage of the mortgage loan amount, with each point equal to 1% of the total loan, typically paid upfront by the borrower to the lender as a form of prepaid interest in exchange for a reduced interest rate.

Question 8

Eminent Domain

Answer 8

The legal authority of the government to take private property against the owner’s will for public use. It is a constitutional right.

Question 9

Alienation

Answer 9

The act of transferring or conveying ownership rights or interest in a property from one party to another.

Question 10

Fee Simple Absolute

Answer 10

The highest and most complete form of property ownership. It grants the owner unrestricted rights and control over the property with no limitations or conditions.

Question 11

Fee Simple Defeasible

Answer 11

A type of property ownership where the ownership is subject to specific conditions or restrictions. If those conditions are violated, the ownership may be terminated or transferred to another party (either the original owner or a designated third party).

Question 12

Secondary Mortgage Market

Answer 12

A platform where existing home loans and mortgage-backed securities are bought and sold between lenders, investors, and government agencies.

Question 13

Escheat

Answer 13

Escheat is the process by which the government obtains property from someone who dies intestate or without a will.

Question 14

LTV

Answer 14

Loan to Value Ratio; The amount of the mortgage loan compared to the current market value of the property.

Question 15

TRID

Answer 15

TILA-RESPA Itergrated Disclosure; A set of regulations that require lenders to provide clear and standardized disclosure forms to borrowers, outlining key terms, cost, and risks associated with obtaining a mortgage loan. Also called the “Know Before You Owe “ mortgage disclosure rule.