Unit quiz 17 Flashcards
A couple listed their home for $237,000. They accepted an offer of $230,000 from a buyer who is obtaining financing with a $46,000 down payment. The seller has agreed to pay the agent a commission of 5.5%, which would be
$12,650.
$230,000 × 5.5%, or $12,650.
The “bring down” is the second title search and is made
after the closing and before any new documents are filed.
The title insurance company may be able to sue the sellers on the basis of any false or incorrect statements provided by them in the
A) affidavit of title.
B) title verification certificate.
C) title search certificate.
D) certificate of title.
A) affidavit of title.
The first title search shows the status of the seller’s title on that date. The second search is made after closing and is called a
bring down.
At closing, a prepaid item by the seller is
A) credited to the seller.
B) evenly divided between the buyer and the seller.
C) debited to the seller.
D) credited to the buyer.
A) credited to the seller.
Prepaid items are expenses that have been paid by seller but are not fully used up, such as fuel oil. These items are prorated and appear as a credit to the seller.
Accrued interest on an assumed mortgage loan is entered on the closing statement as a
A) debit to both the seller and the buyer.
B) credit to both the seller and the buyer.
C) debit to the seller and a credit to the buyer.
D) credit to the seller and a debit to the buyer.
C) debit to the seller and a credit to the buyer.
The Real Estate Settlement Procedures Act (RESPA) is a federal statute administered by the
Department of Housing and Urban Development (HUD).
The Real Estate Settlement Procedures Act (RESPA) applies in a loan assumption if the
A) terms of the assumed loan are modified by the lender.
B) lender charges less than $50 for the assumption.
C) seller does not want to be liable for the loan in the future.
D) buyer must be approved by the lender for the assumption to occur.
A) terms of the assumed loan are modified by the lender.
If the terms of the assumed loan are modified or the lender charges more than $50 for the assumption, then the transaction is subject to
RESPA regulations.
A mortgage servicing transfer statement is executed by
A) an attorney.
B) a lending institution.
C) an abstract company.
D) a grantor.
B) a lending institution.
A mortgage servicing transfer statement, issued by the seller’s lender, tells the borrower
whether the lender intends to service the loan or transfer it to another lender for servicing.
An informational booklet prepared by the CFPB must be given to the borrower under TRID at the time of application or provided
A) within three days of loan application.
B) within seven days of loan application.
C) prior to closing.
D) prior to signing loan documents.
A) within three days of loan application.
At closing, the principal amount of a purchaser’s new mortgage loan is a
A) debit to the seller.
B) credit to the seller.
C) debit to the buyer.
D) credit to the buyer.
D) credit to the buyer.
The purchasers see to it that money is available in the form of a mortgage loan for the purchase of the property. They are given credit for getting this money to the table.
The Real Estate Settlement Procedures Act (RESPA) does not apply to loans on
A) cooperatives.
B) two-unit residential properties.
C) properties located on more than 25 acres.
D) condominiums.
C) properties located on more than 25 acres.
The closing agent will deduct the balance due on the seller’s loan at closing plus any accrued interest. The unpaid balance is $115,400 with a rate of 4%. Based on a closing date of June 15, the amount deducted will be
$115,592.33.
. $115,400 × 4% = $4,616; $4,616 ÷ 360 = $12.82 daily interest; $12.82 × 15 days to closing = $192.33 accrued interest. $115,400 + $192.33 = $115,592.33.
