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Real Estate National > Unit 8-Govt Loan Programs, Income Taxes, Fair Housing > Flashcards

Unit 8-Govt Loan Programs, Income Taxes, Fair Housing Flashcards

1
Q

This type of loan is a mortgage loan that is not insured or guaranteed by a government agency.

A

Conventional

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2
Q

A borrower/mortgagor pays PMI when the LTV is above _________.

A

80%

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3
Q

FHA-insured loans provide its own mortgage _______ ________.

A

Default Insurance–insures the LENDER against default from the borrower

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4
Q

In an FHA insured loan, funds come from approved ______, NOT the FHA.

A

Lenders–interest rates are set by the lender not the FHA, properties must be owner occupied

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5
Q

FHA loans usually allow a higher _______ ratio than conventional loan programs.

A

LTV

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6
Q

FHA loans have no _______ penalty.

A

Prepayment

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7
Q

FHA loans have an _______ clause(contingency clause) that offers a refund provision(if loan cant be obtained, buyer can cancel)

A

Escape

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8
Q

FHA loans are always _________, no due-on-sale clause–lender approval is required for assumption, and it does not need an appraisal.

A

Assumable

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9
Q

VA guaranteed loans guarantee _______ against losses on loans to eligible veterans.

A

Lenders

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10
Q

In this loan no down payment is required and the LTV could be up to 100%.

A

VA Guaranteed–must contain an escape clause too

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11
Q

Who regulates the supply of money and interest rates in the US?

A

The Federal Reserve

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12
Q

This is the market where loans are made.

A

Primary Mortgage market

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13
Q

Mortgage bankers provide _______, they are direct lenders.

A

Financing

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14
Q

What loan requires a Certificate of eligibility/entitlement and a Certificate of reasonable value (CRV)?

A

VA loan

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15
Q

This is who brings together borrowers and lenders and act as an intermediary?

A

Mortgage Brokers

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16
Q

This is where loans are bought and sold.

A

Secondary Market

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17
Q

In the _______ market, loans are originated.

A

Primary

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18
Q

In the secondary market, _____ ______ _______ are sold to investors

A

Mortgage-backed securities

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19
Q

Government sponsored corporation that buys all types of mortgages.

A

FNMA–Federal National Mortgage Association

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20
Q

This agency is within HUD and buy FHA and VA mortgages.

A

GNMA–Government National Mortgage Ass.

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21
Q

This government sponsored corporation mainly buys conventional mortgages from savings and loans associations and commercial banks.

A

FHLMC–Freddie Mac

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22
Q

If a loan meets the standards of FannieMae and GinnieMae and can be readily sold in the secondary market it is ___________.

A

A Conforming loan

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23
Q

This loan is sometimes called a “jumbo loan” and is larger than Fannie Mae standards, may be more difficult to sell on the secondary market.

A

Non-conforming loan

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24
Q

The true cost of credit and lender costs is the ______.

A

APR–Annual % Rate

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25
Q

This act covers all consumer lending, not just Real estate.

A

TILA–Truth in Lending Act

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26
Q

This standardizes closing practices for 1 to 4 family residential properties financed by federally related loans.

A

RESPA–includes FHA and VA loans

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27
Q

This helps restrict the amount of advance escrow payments and prohibits kickbacks.

A

RESPA

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28
Q

Federal Reserve Regulation Z is also the _______.

A

TILA

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29
Q

The true cost of obtaining credit is expressed as a loan’s ______.

A

APR

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30
Q

T or F: TILA applies to all real estate loans except loans to corporations, seller financed(purchase money mortgage and contract for deed), and business or commercial loans.

A

True

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31
Q

this is the 3 day requirement for refinances of owner-occupied, 1 to 4 unit properties and Home Equity loans.

A

3 day right of recission

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32
Q

This is the only specific terms allowed in advertising without triggering a full disclosure requirement.

A

Asking price or APR

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33
Q

TILA is for _______.

A

Lender’s Costs

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34
Q

RESPA is for ________.

A

All costs

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35
Q

An integrated disclosure that combines TILA and RESPA is _____.

A

TRID–shows APR and all estimated loan costs, must be provided no less than 3 days after the loan application is accepted

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36
Q

This must be provided to the borrower 6 days prior, 3 days in person, before closing.

A

CD–Closing Disclosure

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37
Q

Should brokers advise on tax advantages or disadvantages?

A

NO–consult a qualified tax consultant

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38
Q

Deductions on a first or second residence can be remembered as POIT, which stands for…

A

Points Origination Interest Taxes

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39
Q

Insurance, HOA dues, repairs, and capital improvements (are/are not) deductable on 1st or second morgage?

A

Are Not

40
Q

Capital gains from a short-term gain of less than 12 months is taxed at a taxpayer’s ______ income tax rate.

A

Ordinary

41
Q

Long-term gains on properties held longer than a year are taxed at a _________ rate than ordinary income.

A

Different

42
Q

Gains from the sale of a ________ residence is excluded from tax, 250,000 max for single, 500,000 for filing jointly.

A

Principal–must own and occupy 2 of last 5 years

43
Q

With capital gains, you are taxed on your ________, NOT equity.

A

GAIN–Take your adjusted basis from the sales price and that is your capital gain, not equity

44
Q

Adjusted basis=Acquisition cost + improvements and the Sales Price - selling expenses = Adjusted _____ ______.

A

Sales Price

45
Q

Adjusted Sales price - Adjusted Basis = Realized _____ _____

A

Capital Gain

46
Q

This is used as a way to have cost recovery for taxes.

A

Depreciation

47
Q

Depreciation helps offset the fact that real estate is not a _______ asset.

A

Liquid

48
Q

The _______ property allowance is depreciation over 27.5 years.

A

Residential–straight-line method

49
Q

The _______ property allowance is 39 years of depreciation.

A

Commercial

50
Q

1031 tax-deferred exchanges are also called _________ exchanges.

A

Like-kind exchanges–used by investors and business property owners to DEFER capital gains taxes on investment properties

51
Q

1031 exchanges defer payment of capital gains until the sale of the _________ property.

A

Second

52
Q

Are personal or second residences eligible for 1031 exchanges?

A

No

53
Q

This act prohibits discrimination based on race in the sale and rental of all property.

A

Civil Rights Act of 1866–no exceptions to this federal act

54
Q

This added the protected classes of race, religion, color, sex, national origin, familial status.

A

Federal Fair Housing/Civil Rights Act of 1968

55
Q

T or F : Familial Status was added in 1988, and protects families with dependent children, pregnant women, and those fighting for custody.

A

True–can only refuse to rent based on zoning

56
Q

Are these protected classes under the Fair Housing law? Sexual orientation, Age, Marital Status, and Occupation

A

No

57
Q

T or F: Real Estate brokers and sales people May NOT discriminate for any reason in any situation.

A

True

58
Q

T or F: Fresh Corn helps remember the protected classes you cant discriminate against.

A

True

59
Q

FSBO, For sale by owner, is one way discrimination is ________.

A

Allowed–as long as not a real estate professional and no discriminatory advertising

60
Q

This is channeling potential buyers to or away from particular areas as a means of discrimination.

A

Steering

61
Q

Panic selling based information and scare tactics of people moving in or out.

A

Blockbusting

62
Q

Refusing to offer financing or limiting loans because of crime or ethnic backgrounds in an area.

A

Redlining

63
Q

Any physical or mental impairment that substantially limits one or more major life activities.

A

Disability–includes HIV/Aids

64
Q

Do you have to allow a disabled person to modify units to accommodate themselves?

A

Yes–tenant must return unit to original state, cant charge extra damage deposit–bot DON’T have to rent to disabled tenants with history of violence

65
Q

If a complaint is filed with HUD for discrimination, the first step is to _________the complaint.

A

Investigate

66
Q

HUD does testing studies and DOES NOT consider a salesperson’s/broker’s __________.

A

Intentions

67
Q

Registration of sex offenders is required under _________ ________.

A

Megan’s law

68
Q

ECOA–Equal Credit Opportunity Act, makes credit available with fairness and doesnt allow ________ in all credit transactions

A

discrimination

69
Q

Marital Status, age, and public assistance are added classes with the ________.

A

ECOA

70
Q

This is intended to ensure the equal access to public accommodations for disabled persons.

A

ADA

71
Q

Refusing to give a loan to an 80-year-old is a violation of _______.

A

ECOA

72
Q

Senior housing communities are allowed to discriminate based on ________ ________.

A

Familial Status

73
Q

CFPB is the _________________.

A

Consumer Financing Protection Bureau

74
Q

When one party employs another to act on their behalf.

A

Agency

75
Q

The one who is employed to represent the principal is the _________.

A

Agent/Fiduciary

76
Q

A facilitator or transaction broker is a ______ relationship.

A

Non-agency

77
Q

Common Law of Agency specifies _________ duties to principal(OLD CAR).

A

Fiduciary–Obedience(lawful), Loyalty, Disclosure, Confidentiality, Accounting, Reasonable Care & Skill

78
Q

Agents fiduciary responsibility is to disclose info with their _______.

A

Principal

79
Q

Brokers and sellers still must disclose material facts or known problems when selling _________.

A

As-is

80
Q

This agency is created when an agent is authorized to perform a particular act WITHOUT the ability to bind the principal.

A

Special Agency–No ability to bind, brokerage firm to seller, buyer brokerage firm to buyer

81
Q

This agency is created when an agent is authorized to perform a particular series of acts associated with the continued operation of a particular business…limited ability to bind

A

General Agency–limited ability to bind, salesperson or broker to employing broker, property manager to property owner

82
Q

This agency is created when an agent is authorized to perform in place of the principal, agent has unlimited ability to bind the principal

A

Universal Agency–Authority comes from Power of Attorney, agent legally replaces principal

83
Q

An _______ ________ may also be called a fiduciary agreement.

A

Express Contract–oral or written

84
Q

This agency is created when an agent acts without the principal’s permission

A

Ostensible

85
Q

Conspiring to establish fixed fees or prices for services is known as _________.

A

Price-fixing–not allowed under Sherman Antitrust Laws, all fees are ALWAYS negotiable

86
Q

This is an employment contract that appoints a brokerage firm as an owner’s special agent for the specific purpose of finding a buyer who is ready, willing, and able to buy according to the contract terms.

A

Listing(fiduciary) contract, seller is principal, must have negotiable commission clause, definite beginning and end date, NO automatic renewal allowed

87
Q

This brokerage contract, the brokerage gets paid no matter who finds the buyer, max protection for broker, bilateral contract

A

Exclusive right to sell

88
Q

In this agency, seller has NO liability to pay the brokerage if the seller finds the buyer.

A

Exclusive agency–bilateral contract

89
Q

This listing is called this and can not be put in the MLS, only the brokerage firm that procures the buyer gets paid.

A

Open/nonexclusive–seller can sign multiple with different firms, unilateral contract

90
Q

In a ________ ____________ _________, the buyer is the principal, brokerage firm is agent/fiduciary.

A

Buyer Representation Contract–can be both exclusive right to buy or exclusive agency

91
Q

Should brokers complete a visual inspection of the property to look for material defects?

A

Yes–and ask sellers for property disclosure, point out red flags like sagging floors

92
Q

Do brokers have to use a trust fund when holding other people’s money?

A

Yes–earnest money, security deposits, etc. and must maintain accounting of it—broker associates and salespeople CAN NOT have trust funds

93
Q

Mixing personal and business funds with trust funds is called _____________ funds.

A

Commingling

94
Q

When trust funds are used for personal reasons or given to the wrong people it is called _______.

A

Conversion

95
Q

The main function of property managing is __________.

A

Maintaining the value of the property and generating income

96
Q

In a new home there is a warranty of habitability or suitability, provided by the ________.

A

Builder–covers roofs, structural failure, poor workmanship–but not from outside forces

97
Q

When finding commission, it is Rate x ________.

A

Sales price

Real Estate National (8 decks)

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