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California: “Legal Aspects of Real Estate” Chapter 1 quiz with no answers

         

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1 of 25 In the Uniform Commercial Code, negotiable instruments are all of the following EXCEPT

A.    cash.

B.     promissory notes.

C.     drafts.

D.    checks.

2 of 25 Which body of law is designed to protect the public from harm?

A.    Personal Property law

B.     Civil law

C.     Criminal law

D.    Tort law

3 of 25 Rules and regulations enacted by various federal agencies are important to real estate because

A.    they are laws passed by congress.

B.     many are listed in the constitution.

C.     several of the agencies involve housing and/or financial transactions.

D.    they are considered guidelines rather than laws.

4 of 25 The Bill of Rights protects the rights of individuals by

A.    dividing power into three main branches.

B.     laying out the organization and powers of the federal government.

C.     making sure all laws agree with the US Constitution.

D.    limiting government power.

5 of 25 Which federal court reviews IRS rulings?

A.    U.S. Tax Court

B.     Claims Court

C.     U.S. Bankruptcy Court

D.    Appeals Court

6 of 25 What kind of appeal cases go straight to the California Supreme Court?

A.    Civil

B.     Murder

C.     Death penalty

D.    Fraud

7 of 25 What does not occur during a pre-trial conference?

A.    A trial plan is prepared.

B.     Attorneys and parties will revisit the financial costs and unpleasantness of going to trial.

C.     Parties may or may not consider settlement.

D.    The court enters a pre-trial order.

8 of 25 All of the following are types of monetary damages EXCEPT

A.    restitution.

B.     passive.

C.     compensatory.

D.    nominal.

9 of 25 In a civil case, the party bringing suit for injury is called the

A.    plaintiff.

B.     attorney.

C.     defendant.

D.    judge.

10 of 25 In the United States, the primary source of the law comes from

A.    civil law.

B.     statutes.

C.     case precedents.

D.    state regulations.

11 of 25 Which state court is known as the “people’s court?”

A.    Family Court

B.     Small Claims Court

C.     Court of Appeals

D.    District Court

12 of 25 Which of the following is not an equitable remedy?

A.    Liquidated Damages

B.     Rescission

C.     Quiet title

D.    Foreclosure

13 of 25 The law enforces promises through

A.    monitoring our daily activities.

B.     the use of contracts.

C.     the preservation of order.

D.    setting standards.

14 of 25 Certain amendments will be of particular interest to real estate professionals because

A.    they discuss real estate transactions.

B.     they impact property rights.

C.     everyone should know the amendments.

D.    they explain implied powers.

15 of 25 Another name for common law, which is the overall accumulation of judicial decisions is what?

A.    Constitutional law

B.     Case law

C.     Administrative law

D.    Contract law

16 of 25 In a typical civil case, the burden of proof is on the

A.    judge.

B.     officer of the court.

C.     defendant.

D.    plaintiff.

17 of 25 Which of the following is NOT an important source of law in the United States?

A.    International law

B.     United States Constitution

C.     Local ordinances

D.    Rulings of federal, state, and local agencies

18 of 25 The individual state’s common laws of torts and contracts are unique because

A.    they are the same as federal contract laws.

B.     they can be enforced on a federal or state level.

C.     the powers of these belong exclusively to the state.

D.    they are considered universal.

19 of 25 What is another term given to case law?

A.    State law

B.     Common law

C.     Property law

D.    Civil law

20 of 25 During jury selection, parties may not use preemptory challenges because of an individual’s

A.    bias.

B.     race.

C.     age.

D.    economic status.

21 of 25 Mary and Ben were having a dispute over an employment contract. They agreed to allow a third party to listen to their issues and help them come to a resolution. This is a description of what type of dispute resolution?

A.    Arbitration

B.     Litigation

C.     Mediation

D.    Estoppel

22 of 25 In a civil case, pleadings refer to

A.    counter-claims filed by the defendant.

B.     each party’s side of the dispute.

C.     gathering relevant evidence.

D.    filing suit.

23 of 25 Which of the following is NOT a purpose of laws in our society?

A.    To make associations between individuals and governments

B.     To set standards

C.     To settle disputes

D.    To safeguard liberties and rights

24 of 25 In a civil case, the primary goal is to compensate the injured party for the damage done to him or her by

A.    establishing a case precedent.

B.     awarding either a legal remedy or equitable remedy.

C.     not providing an equitable remedy.

D.    requiring a specific performance from the plaintiff.

25 of 25 It is key for agents to learn about the laws because

A.    they need to be able to memorize them.

B.     they should be able to give their clients legal advice.

C.     they have too many laws that apply to their transactions.

D.    they need to know the origination and support for those rules.

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1.      The law serves as a guide for what in our society?

2.      What is the formal method the law offers for settling disputes?

3.      The law protects our numerous liberties and rights from what?

4.      How does the law enforce promises?

5.      What is the basis of law in the United States?

6.      What do we call the overall accumulation of judicial decisions?

7.      What did the Romans contribute to the legal system?

8.      Why did Spanish civil law form the basis for California’s early legal system?

9.      What is a substantive law?

10.  What is a procedural law?

11.  Define civil law and criminal law.

12.  What are four areas of difference between civil law and criminal law?

13.  Name three important sources of United State law.

14.  How does the Bill of Rights protect individual rights?

15.  What is due process?

16.  What are the implied powers that the Constitution gives to Congress?

17.  What power do federal administrative agencies have?

18.  What laws belong exclusively to the states and not to the federal government?

19.  Why was the Uniform Commercial Code enacted?

20.  What are local ordinances?

21.  What are the two main courts in the United States?

22.  What are judicial circuits?

23.  What are the two types of courts in California?

24.  What do appellate courts do?

25.  Who are the parties involved in a civil lawsuit?

26.  What are the main steps in a civil case?

27.  What happens during discovery?

28.  If a defendant does not have insurance to cover a judgment, what avenues are available for collection?

29.  What are liquidated damages?

30.  What is meant by reformation?

31.  What is mediation?

32.  What is arbitration?

California: “Legal Aspects of Real Estate” Chapter 2 quiz with no answers

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1 of 25 Tangible property is physical, visible, and

A.    abstract.

B.     conceptual.

C.     material.

D.    imperceptible.

2 of 25 What term means the right to mortgage a property as collateral for debt?

A.    The right to exclude

B.     The right to encumber

C.     The right to finance

D.    The right to rescind

3 of 25 The metes and bounds description always identifies an enclosed area by starting at an origination point called

A.    point of beginning.

B.     base point.

C.     base point.

D.    conception.

4 of 25 Items of personal property are also called

A.    appurtenances.

B.     fodder.

C.     chattels.

D.    interests.

5 of 25 The three unique characteristics of land are immobility, indestructibility, and

A.    production.

B.     heterogeneity.

C.     function.

D.    cultivation.

6 of 25 The north-south area between consecutive meridians is called a

A.    lot.

B.     tier.

C.     section.

D.    range.

7 of 25 What is the conversion of real property to personal property by detaching it from the real estate called?

A.    Assignment

B.     Severance

C.     Fasten

D.    Allocate

8 of 25 What type of survey locates and verifies all property corners and boundaries, shows the location of all improvements in relation to the property lines, includes an area of the overall property and shows any existing encroachments?

A.    A location survey

B.     A construction survey

C.     A boundary survey

D.    A site planning survey

9 of 25 What type of surveys use portable receiving antennas to gather data transmitted from satellites which are used to calculate the position of the object being located on the surface of the earth?

A.    TA/AC surveys

B.     ALTA surveys

C.     GPS surveys

D.    ALTA/SM surveys

10 of 25 What type of survey is a boundary survey with the additional location of all the interior improvements?

A.    A topographic survey

B.     A location survey

C.     A site planning survey

D.    A construction survey

11 of 25 What did the federal government develop to simplify and standardize property descriptions as a replacement for the cumbersome and often inaccurate metes and bounds method?

A.    The lot and block method

B.     The rectangular survey system

C.     The recorded plat method

D.    The public survey system

12 of 25 What type of survey includes a topographic survey of a parcel of land which will be divided into two or more smaller tracts, lots or estate divisions?

A.    A location survey

B.     A construction survey

C.     A site survey

D.    A subdivision survey

13 of 25 What describes real estate and the bundle of rights associated with owning the real estate?

A.    Personal estate

B.     Community property

C.     Personal property

D.    Real property

14 of 25 What type of property is ownership of anything that is not real estate and the rights associated with owning the item?

A.    An emblement

B.     Real property

C.     A datum

D.    Personal property

15 of 25 Property rights that are said “to run with the land” and includes things such as air rights, surface rights and subsurface rights are called

A.    fixtures.

B.     emblements.

C.     appurtenances.

D.    chattels.

16 of 25 What describes items of a tenant’s personal property that the tenant has temporarily affixed to a landlord’s real property in order to conduct business?

A.    Datums

B.     Accessories

C.     Personal devices

D.    Trade fixtures

17 of 25 What type of rights apply to the real estate contained within the surface boundaries of the parcel?

A.    Littoral rights

B.     Water rights

C.     Encumbrance rights

D.    Surface rights

18 of 25 What is the act of converting personal property to real property by attaching it to the real estate called?

A.    Affixing

B.     Severing

C.     Appending

D.    Detaching

19 of 25 What term describes a personal property item that has been converted to real property by attachment to real estate?

A.    A feature

B.     A component

C.     A fixture

D.    A fitment

20 of 25 The term “metes” refers to distance and direction and the term “bounds” refers to

A.    course.

B.     variable landmarks.

C.     fixed reference points.

D.    latitude.

21 of 25 What describes a portion of land delineated by boundaries?

A.    A section

B.     A parcel

C.     A tier

D.    A plot

22 of 25 What refers to support provided by the adjacent property, such as a landowner having a right to demand that a neighboring property owner does nothing to cause the land to collapse?

A.    Material support

B.     Lateral support

C.     Central support

D.    Littoral support

23 of 25 Air, water, land and everything affixed to the land is a definition of

A.    intangible property.

B.     chattel.

C.     real estate.

D.    community property.

24 of 25 What system uses physical features of the local geography, along with directions and distances, to define and describe the boundaries of a parcel of land?

A.    Lot and block method

B.     Rectangular survey system

C.     Recorded plat method

D.    Metes and bounds

25 of 25 What type of rights concern properties abutting bodies of water that are not moving, such as lakes and seas?

A.    Inlet rights

B.     Littoral rights

C.     Real property rights

D.    Riparian rights

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1.      Define a parcel.

2.      What is the definition of a legal description?

3.      What situations require a legal description?

4.      When did the Public Land Survey System begin?

5.      What does a metes and bounds legal description do?.

6.      In the rectangular survey method, how large is a township in square miles and how large is a township section?

7.      For what kinds of properties is the lot and block method most often used?

8.      What other ways of describing property are legal?

9.      What does a boundary survey do?

10.  How does a location survey differ from a boundary survey?

11.  When are property surveys most often conducted?

12.  What are datums?

13.  What does the legal concept of land encompass

14.  What are the three physical characteristics of land?

15.  What does the legal concept of real estate encompass?

16.  What are the two classifications of property?

17.  What are the four important rights associated with owning a parcel of real estate?

18.  Land can be laterally divided into what classifications of rights?

19.  How are air rights delineated?

20.  What do water rights concern?

21.  What is the definition of a fixture?

22.  How is a trade fixture different from a fixture?

23.  Growing plants may be either real or personal property. How are they differentiated?

24.  Which government entity is the primary regulatory entity of the real estate business?

California: “Legal Aspects of Real Estate” Chapter 3 quiz with no answers

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1 of 25 A lien is put on a property by

A.    creditors.

B.     owners.

C.     lessees.

D.    sellers.

2 of 25 What is the purpose of forming a syndicate?

A.    To create an LLC

B.     To pool financial resources for a certain investment

C.     To be protected from taxes

D.    To test out a business idea

3 of 25 How does a cooperative differ from condominiums?

A.    The costs are relatively higher in cooperatives.

B.     In cooperatives, a person owns shares in a corporation as opposed to having a mortgage.

C.     The cooperative has less potential problems than condominiums.

D.    In cooperatives, the owner owns the land associated with their unit.

4 of 25 Which of the following is NOT a superior lien?

A.    Special Assessment

B.     Federal and State Inheritance Tax

C.     Federal Income Tax

D.    Real Estate Tax

5 of 25 If a couple has a one year lease that changes over to a month to month lease after the one year term expires, the property is what kind of leasehold estate?

A.    Estate at Will

B.     Estate from Period to Period

C.     Estate for Years

D.    Estate at Sufferance

6 of 25 What is a sole proprietorship?

A.    When two people own a business together

B.     When the business is a separate legal entity under state law

C.     When a single person owns the whole business

D.    When two people own the business, but it has limited liability.

7 of 25 Government entities can create easements through the exercise of eminent domain, which is

A.    when government agents reside in properties of their choice.

B.     when the government condemns a portion of a property and causes it to be sold “for the greater good.

C.     when easements reach the 5 year statutory period.

D.    when the government helps owners keep their property.

8 of 25 Which of these is considered separate property in a marriage?

A.    A $5000.00 check given as a wedding gift

B.     A home purchased after a couple marries

C.     A vehicle owned by one spouse prior to marriage

D.    A business purchased during a marriage

9 of 25 What is undivided interest?

A.    Interest in a property where there is a single owner

B.     Interest determined by possession of the property

C.     Interest in a property where two or more parties share ownership

D.    Interest determined by intended use of the property

10 of 25 Escheat occurs when

A.    the local government changes zoning.

B.     property of a deceased person with no heir is given to the state.

C.     a public utility company takes private property for public use.

D.    private property is seized by the state for non-payment.

11 of 25 What does a writ of attachment do?

A.    It stops a debtor from selling or concealing property.

B.     It forces the sale of a property.

C.     It protects certain property from being sold.

D.    It determines the sale price of a property.

12 of 25 A life estate is a freehold estate that is

A.    passed to an heir.

B.     given to the state upon the owner’s death.

C.     transferred to another person for permanent ownership.

D.    limited in duration to the life of the owner or other named person.

13 of 25 What does it mean for a corporation to be closely held?

A.    It has only a few shareholders.

B.     It is not a public corporation.

C.     The shareholders plan for it to stay a small company.

D.    It doesn’t pay taxes.

14 of 25 What is the main difference between condominiums and planned unit developments (PUD)?

A.    PUD owners own the land where the unit is, not just the airspace around it.

B.     PUD’s cannot be owned jointly, while condominiums can be.

C.     PUD owners are not individually taxed as condominium owners are.

D.    PUD’s can be individually sold by owners, while condominiums cannot.

15 of 25 Which type of estate is the most desirable?

A.    Determinable

B.     Fee excusatory interest

C.     Fee simple absolute

D.    Condition subsequent

16 of 25 An easement may be created by all of the following EXCEPT

A.    by prescription.

B.     voluntary.

C.     in gross.

D.    necessity.

17 of 25 What is the elective share statute?

A.    A statute that enables a surviving spouse to make a minimum claim to the deceased spouse’s property in lieu of provisions in a will

B.     A statute that assures a wife’s life estate interest in the husband’s property

C.     A statue that protects family members against losing their homes to general creditors attempting to collect on debts

D.    A statute that allows surviving spouses definitive rights to all family property after a spouse’s death

18 of 25 Which of the following lien types is subject to the homestead law?

A.    Child Support Debts

B.     Extensions of Credit on the Homestead

C.     Signature Loan Debts

D.    Tax Debts on the Homestead

19 of 25 Jennifer and Mark’s home has had a lien placed on it by the state for failure to pay state income tax shortfalls. What kind of lien is it?

A.    General Involuntary

B.     Specific Voluntary

C.     General Voluntary

D.    Specific Involuntary

20 of 25 A common interest development, or CID, is a development characterized by the individual ownership of either a housing unit or parcel coupled with

A.    its relative size.

B.     its proximity to other units.

C.     the potential value.

D.    the right to use shared common areas and facilities.

21 of 25 Which of the following is NOT a way a property may be held?

A.    In Co-ownership

B.     In Trust

C.     In Severalty

D.    In Agreement

22 of 25 Which of the following is a kind of tenancy not recognized in California?

A.    Joint Tenancy

B.     Tenancy in Common

C.     Tenancy by the Entirety

D.    Tenancy in Severalty

23 of 25 Interests are individually owned in tenancy in common. What does that mean?

A.    Tenants decide what percentage of the property each will own.

B.     Tenants have distinct and separable ownership of their interests.

C.     One of the tenants is a beneficiary.

D.    Tenants have tenancy in severalty.

24 of 25 Many states have enacted their own homestead laws that specify

A.    foreclosure timeframe.

B.     exemption amounts for individuals and families.

C.     minimum sale price.

D.    payment for selling costs.

25 of 25 An encumbrance is

A.    a law that assures a property owner’s rights.

B.     a way of zoning residential property.

C.     a type of estate.

D.    a right of another to use or take possession of a legal owner’s property or limit the owner’s rights.

Bonus  Chapter3 questions with NO answers

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1.      What is meant by the term “undivided interest”?

2.      For what reasons might the government or a public utility take private property for public use and what is this called?

3.      What is the highest form of ownership interest one can acquire in real estate?

4.      What are the two forms of fee simple estate and what do they mean?

5.      What is a life estate?

6.      What are the major forms of legal life estate?

7.      What are leasehold tenants entitled to?

8.      What are the four types of leasehold estates and which of the four has no definite expiration date?

9.      What is an encumbrance?

10.  What are the primary differences between an easement appurtenant and an easement in gross?

11.  What is an easement by necessity?

12.  How are easements created?

13.  What is a lien?

14.  What are four legal features of a lien?

15.  List four types of liens not subject to the homestead exemption.

16.  What additional benefits does a California homeowner gain by recording a homestead declaration?

17.  What two factors primarily determine lien priority?

18.  What types of liens are considered superior liens?

19.  A court-ordered lien against all real or personal property of a parent who defaults on child support is an example of what kind of lien?

20.  What does a mechanic’s lien do?

21.  What are the three main forms of ownership?

22.  What four types of co-ownership does California recognize?

23.  What does a living trust do?

24.  What are the four unities needed to create a joint tenancy?

25.  What happens to community property upon the death of a spouse?

26.  What form of ownership is a condominium?

27.  What is the main ownership difference between condominiums and planned unit developments?

28.  What is timeshare ownership?

29.  In a limited partnership, what is the liability difference between a general partner and a limited partner?

30.  List four key things about corporations.

31.  What is a limited liability company (LLC)?

32.  What is the major benefit of Real Estate Investment Trusts (REITs)?

California: “Legal Aspects of Real Estate” Chapter 4 quiz with no answers

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1 of 25 What are limitations placed on the use of land by the developer of a residential subdivision?

A.    Adverse possession

B.     Easements

C.     Restrictive covenants

D.    Development controls

2 of 25 What describes a regulation enacted by the local government for zoning a city or county?

A.    A mandate

B.     A special use permit

C.     An injunction

D.    A zoning ordinance

3 of 25 The three most common types of zoning classifications are residential, commercial and

A.    agricultural.

B.     industrial.

C.     recreational.

D.    public.

4 of 25 What type of property restriction places limits on how a property may be used?

A.    An encumbrance

B.     A lien

C.     An easement

D.    A deed restriction

5 of 25 Property owners can enforce covenants by taking a court action known as

A.    an affidavit.

B.     an injunction.

C.     a complaint.

D.    a decree.

6 of 25 What describes legal rights that are attached to the ownership of a parcel of real estate?

A.    Ownership rights

B.     Parcel rights

C.     A bundle of rights

D.    Legal property rights

7 of 25 If a California homeowner does not pay his or her full property tax amount by June 30th, the property is considered

A.    intestate.

B.     escheat.

C.     nonconforming.

D.    in default.

8 of 25 What describes a fungus that grows in the presence of moisture and oxygen on virtually any kind of organic surface?

A.    Carbon monoxide

B.     Radon

C.     Asbestos

D.    Mold

9 of 25 The most favorable management of real property usage must take into account both the interests of the individual and the interests of

A.    the subdivision.

B.     the surrounding community.

C.     the government.

D.    the HOA.

10 of 25 What authorizes a use that is not consistent with the zoning ordinance in a literal sense, yet is clearly beneficial or essential to the public welfare?

A.    An accessory use

B.     A special use permit

C.     A zoning ordinance

D.    A deed restriction

11 of 25 What term describes when a property owner dies with a valid will in place?

A.    Escheat

B.     Intestate

C.     Moratorium

D.    Testate

12 of 25 What allows a use that differs from the applicable ordinance for a variety of justifiable reasons?

A.    A proposed variance

B.     An area variance

C.     A zoning variance

D.    A use permit

13 of 25 The two most important environmental disclosure requirements for licensees to be aware of are the Natural Hazards Disclosure Act and

A.    the Clean Air Amendment.

B.     the Coastal Zone Conservation Act.

C.     the Lead-based Paint Act.

D.    the Alquist-Priolo Earthquake Faulting Zone Act.

14 of 25 What type of taxes are levied on properties to pay for improvements, that will ideally increase the overall value of the property?

A.    Personal property taxes

B.     Improvement taxes

C.     Special assessments

D.    Rollback taxes

15 of 25 In 1848, courts in the United States recognized and enforced restrictive covenants to regulate land use in

A.    public areas.

B.     parks.

C.     agricultural areas.

D.    residential subdivisions.

16 of 25 Properties which are owned by the government are

A.    called domains.

B.     not exempt from the payment of property taxes.

C.     exempt from the payment of property taxes.

D.    required to pay a usury tax.

17 of 25 What gives a government entity the ability to fulfill its responsibility to provide for the health, safety, and welfare of the public?

A.    Official enforcement

B.     Police power

C.     Jurisdiction

D.    Civil courts

18 of 25 Property taxes that are not paid result in a

A.    deed restriction.

B.     property lien.

C.     property assessment.

D.    tax lien.

19 of 25 What refers to a method for protecting land by transferring the “rights to develop” from one area and giving them to another?

A.    Land acquisition transfer

B.     Fee simple development

C.     Transfer of development rights

D.    Right of refusal

20 of 25 What does a developer submit for approval that contains surveyed plat maps and comprehensive building specifications?

A.    An inspection report

B.     A survey

C.     A building plan

D.    A plat of subdivision

21 of 25 What 1969 Act created the Environmental Protection Agency (EPA) and the Council for Environmental Quality, giving them a mandate to establish environmental standards for land use planning?

A.    The Water Pollution Control Act

B.     The National Environmental Policy Act

C.     The Water Quality Improvement Act

D.    The Resource Recovery Act

22 of 25 What describes a powdery mineral once commonly used as a fireproof insulating material around pipes, in floor tiles and linoleum, in siding and roofing, in wallboard, joint compound and many other applications?

A.    Radon

B.     Asbestos

C.     Formaldehyde

D.    Lead

23 of 25 What type of use is one that clearly differs from current zoning and usually occurs when zoning change leaves existing properties in violation of the new ordinance?

A.    Special use

B.     Conforming use

C.     Nonconforming use

D.    Restrictive use

24 of 25 In order to qualify for FHA financing insurance, what type of requirements must a subdivision meet?

A.    HUD requirements

B.     FHA requirements

C.     HOA requirements

D.    Minimum standard requirements

25 of 25 What type of zoning allows more restrictive zoning uses to be allowed in less restrictive zones?

A.    Noncumulative zoning

B.     Incentive zoning

C.     Cumulative zoning

D.    Recreational zoning

Bonus  Chapter4 questions with NO answers

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1.      What limits does Section 110.0 of California’s Revenue and Taxation Code outline regarding property tax amounts?

2.      What happens if property taxes have not been paid in full after the redemption period?

3.      What is a special assessment?

4.      How is the documentary tax value determined?

5.      Define “as of right zoning”.

6.      What are the core purposes of land use control?

7.      What are the two levels of approval a California general plan must pass?

8.      List three types of public and private land use controls.

9.      What do deed restrictions do?

10.  What are restrictive covenants?

11.  Describe an injunction.

12.  What is the Doctrine of Laches?

13.  What are some examples of the exercise of police power?

14.  What does eminent domain allow a government to do?

15.  What is a “taking?”

16.  What do building codes address?

17.  What are the three most common zoning classifications?

18.  What is the difference between cumulative and noncumulative zoning and which one is more common?

19.  List types of regulations found in aesthetic zones.

20.  What is cluster zoning and what is its benefit?

21.  Explain transfer of development rights?

22.  What is a moratorium?

23.  What do sunshine laws require of planning meetings?

24.  What does the Interstate Land Sales Full Disclosure Act say that developers must give to potential purchasers and lessees?

25.  Give an example of a legal and illegal nonconforming use.

26.  Describe a special use permit.

27.  What is the difference between a use variance and an area variance?

28.  List two reason zoning laws are often the basis of court cases?

29.  If more than one environmental law pertains to a property, which one applies?

30.  What is meant by CERCLA’s innocent landowner defense?

31.  What does the California Environmental Quality Act require project developers to do?

32.  According to the California Natural Hazards Disclosure Act, what zones or areas must be disclosed about a property for sale?

California: “Legal Aspects of Real Estate” Chapter 5 quiz with no answers

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1 of 25 Which fiduciary duty requires an agent to be accountable for all monies, documents, and other property he or she receives from the principal?

A.    Loyalty

B.     Disclosure of notice

C.     Care

D.     Accountability

2 of 25 If a real estate agent fails to exert reasonable efforts to represent his or her client’s interests, the agent could be found guilty of

A.    misrepresentation.

B.     perjury.

C.      negligence.

D.    fraud.

3 of 25 When there is no buyer representation agreement in place, who actually represents a seller in a real estate transaction?

A.    The licensee

B.     The listing broker

C.      The selling broker

D.    An escrow officer

4 of 25 What term refers to the person who hires a real estate agent and delegates to the agent the responsibility of representing his or her interests?

A.    Consumer

B.      Principal

C.     Customer

D.    Purchaser

5 of 25 When a licensee realizes that an agency has been undisclosed to someone, the problem can be corrected with

A.    a chain of title.

B.     power of attorney.

C.      the proper disclosure.

D.    a listing agreement.

6 of 25 Who can allow a listing to be cancelled during the term of the listing agreement?

A.    The seller

B.     The licensee

C.     A cooperating broker

D.     The broker

7 of 25 What term refers to a relationship established between a principal and a real estate agent?

A.    Fiduciary

B.     Brokerage agreement

C.      Agency

D.    Ministerial

8 of 25 If a seller lists his or her property at a particular broker’s office, who has the job of obtaining the best possible transaction for the seller?

A.    The broker

B.      Everyone in the office

C.     The licensee

D.    The listing agent

9 of 25 What informational handout should the listing agent provide the seller before a seller signs a listing agreement with the agent?

A.    A Real Estate Agent Agreement Form

B.     A Property Brokerage Form

C.     A Listing Assignment

D.     A Disclosure Regarding Real Estate Agency Relationships

10 of 25 What term describes duties a broker has to a client to meet the needs of the client above the needs of everyone else, including him or herself?

A.     Fiduciary duties

B.     Representation duties

C.     Client duties

D.    Disclosure duties

11 of 25 When a lawsuit or complaint is filed against a real estate agent, who must determine whether or not an agency relationship has been created?

A.    A broker

B.     A judge

C.     A member of the Commission

D.     A hearing officer

12 of 25 All real estate must be performed under the supervision of

A.    a judge.

B.     an attorney.

C.     an express agency.

D.     a broker.

13 of 25 What does an agent demonstrate by being honest as he or she can be with a customer while at the same time attempting to get his or her client the best transaction possible?

A.    Honesty

B.     Accountability

C.      Fairness

D.    Care

14 of 25 A licensee cannot give legal advice unless he or she

A.    has permission from the broker.

B.     is asked to by the client.

C.     speaks with an attorney.

D.     has a separate license to do that.

15 of 25 What type of agency is created between the broker and salespeople?

A.    A special agency

B.      A general agency

C.     A universal agency

D.    An employee agency

16 of 25 What is it called when a broker wants to end a listing but the client does not?

A.    Rescission

B.      Broker renunciation

C.     Client revocation

D.    Recession

17 of 25 What is the best way to end agency?

A.    Let the time limitation expire

B.     Cancellation

C.      To close the deal

D.    Rescission

18 of 25 A customer is not a client until

A.    disclosures are signed.

B.      a representation agreement is signed.

C.     it is mutually and orally agreed upon.

D.    the broker signs an agency form.

19 of 25 In what type of agency relationship does the principal empower the agent to perform any and all actions that may be legally delegated to an agency representative?

A.    Specific agent

B.     Special agent

C.     General agent

D.     Universal agent

20 of 25 Which fiduciary act requires that an agent act in good faith and obey the principal’s directions as outlined in the contract?

A.    Care

B.      Obedience

C.     Loyalty

D.    Accountability

21 of 25 Most of the sales of residential property involve two licensees-a listing broker and a

A.    sales agent.

B.      selling broker.

C.     transaction broker.

D.    dual agent.

22 of 25 In what type of agency does a person or court give an agent full control over someone’s life and belongings to meet a specific need?

A.    A general agency

B.     A specific agency

C.      A universal agency

D.    A special agency

23 of 25 What term describes when both the client and the broker agree to end the relationship that they are in?

A.    Contingency

B.      Rescission

C.     Termination

D.    Cancellation

24 of 25 What type of agency representation refers to one broker representing the seller and another broker representing the buyer?

A.    Implied agency

B.      Single agency representation

C.     Express agency

D.    Dual agency representation

25 of 25 If a broker is representing a buyer-client, he or she must negotiate on behalf of the

A.    seller.

B.     broker.

C.      buyer.

D.    lien holder.

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1.      What is the definition of agency?

2.      What do we call a relationship in which one party places special trust, confidence, and reliance in another

3.      Real estate brokerage is based on what kind of agency?

4.      Under what circumstances would a client be responsible for misrepresentation committed by his or her real estate agent?

5.      What gives consumers the idea that real estate professionals have a high level of expertise in real estate?

6.      These days, how do consumers often view a home purchase?

7.      In a home sale involving 2 licensees, absent a buyer representation agreement, who do the brokers represent?

8.      What is the primary reason that you need to have a clear understanding of agency concepts?

9.      A general agency exists between the broker and the salesperson. If the salesperson violates the licensing act, who besides the salesperson would also be held responsible?

10.  If a licensee leaves his or her broker, how many listing agreements and buyer agency agreements is the salesperson allowed to take to the next broker?

11.  If a broker has a multitude of tasks to perform for a client, the broker would be considered which type of agent?

12.  Name the three components of written agreements that create agency.

13.  What is the broker’s responsibility to a client?

14.  What is a licensee’s responsibility to a client?

15.  What types of things is a broker NOT authorized to do for a client?

16.  Under what conditions might a broker be responsible for something someone else in a transaction stated to a client or customer?

17.  What are the five fiduciary duties an agent has to his or her principal?

18.  What actions demonstrate exercising care when representing a buyer?

19.  What exception exists to the duty of obedience when working with a client?

20.  An agent’s fiduciary responsibilities to a client usually end when the transaction closes. This is not true of which duty?

21.  What is a customer?

22.  What can a licensee not provide to a customer?

23.  What is a material fact?

24.  Why should a customer be told to be careful what he or she says around the listing agent?

25.  What is the best way to end agency?

26.  Generally, is it possible to collect a commission after the listing expires?

27.  What might sellers do if they are not happy with the progress the agent is making in showing and selling their home?

28.  With the death of the owner, what happens to the listing agreement?

29.  What should an agent do if he or she realizes there is agency that has not been properly disclosed to someone?

30.  Although legal in California, why is dual agency not encouraged?

31.  What informational disclosure form must be provided to both sellers and buyers before they sign agency agreements with a broker?

32.  How must confirmation of agency relationships be done?

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1 of 25 A meeting of the minds where parties freely agree to the terms of a contract, exactly as the contract is written, is called

A.    separate assent.

B.     reciprocal agreement.

C.     bilateral assent.

D.     mutual assent.

2 of 25 What consists of both common law and statutory rules that govern the creation, interpretation, and enforcement of contracts?

A.    Common law

B.     Statute law

C.      Contract law

D.    Civil law

3 of 25 If a contingency was not met by the date outlined in the contingency, the contract is

A.    abdicated.

B.     revised.

C.     waived.

D.     void.

4 of 25 In contract language, what means to do what one agreed to do?

A.    Action

B.      Performance

C.     Exchange

D.    Attainment

5 of 25 What restricts the time period for which an injured party in a contract has the right to bring a lawsuit against the other party?

A.    The Statute of Frauds

B.     An exclusion clause

C.     A limitation clause

D.     The Statute of Limitations

6 of 25 What type of contract is one that has been fully performed and fulfilled?

A.    An open contract

B.     An executory contract

C.      An executed contract

D.    An indefinite contract

7 of 25 What type of suit is an attempt to force the defaulting party to comply with the terms of the contract?

A.    A suit for damages

B.     Rescission

C.      A suit for specific performance

D.    Forfeiture

8 of 25 What term describes when damages were within the contemplation of the contract when made?

A.    Accountability

B.     Computability

C.     Predictability

D.     Foreseeability

9 of 25 What term describes the failure to do something required by law or duty?

A.    Transgression

B.     Breach

C.     Noncompliance

D.     Default

10 of 25 What should every contingency have so that there is “reasonable time” for the fulfillment of the contingency?

A.    Limitations of liability

B.     Selling restrictions

C.      A specific deadline

D.    A clear description

11 of 25 What describes a failure to perform according to the terms of an agreement?

A.    Failure of privilege

B.      Breach of contract

C.     Failure of performance

D.    Breach of faith

12 of 25 Which one of these contracts is a unilateral agreement?

A.    An Independent Contractor Agreement

B.     A Listing Agreement

C.      An Option to Purchase

D.    A Buyer Representation Agreement

13 of 25 Discharging a contract by mutual agreement is called

A.     rescission.

B.     initiation.

C.     revocation.

D.    retraction.

14 of 25 What do many states have that protects consumers who enter into the types of contracts in which fraud is most likely to occur?

A.    Consumer law

B.     Common law

C.      The Statute of Frauds

D.    The Breach of Performance

15 of 25 What type of contract is one that cannot be fully understood because important terms are missing?

A.     An indefinite contract

B.     An inferred contract

C.     An ambiguous contract

D.    A presumed contract

16 of 25 What term describes the exchange of promises offered by one party to another to do or not to do something?

A.    Deliberation

B.     Application

C.     Omission

D.     Consideration

17 of 25 What type of contract describes a sales contract prior to closing?

A.    An executed contract

B.     An implied contract

C.     An express contract

D.     An executory contract

18 of 25 What are described as the legal agreements that underlie the transfer and financing of real estate, as well as the real estate brokerage business?

A.    Property contracts

B.      Real estate contracts

C.     Legal contracts

D.    Performance agreements

19 of 25 What type of performance describes when a defendant has failed to complete performance of an agreement according to its terms and where the plaintiff may recover damages to compensate him or her to the same extent as though the contract had been completely performed?

A.    Sufficient performance

B.      Partial performance

C.     Defective performance

D.    Residual performance

20 of 25 What type of contract is one in which both parties promise to perform their respective parts of an agreement in exchange for performance by the other party?

A.    An express contract

B.     A unilateral contract

C.     An implied contract

D.     A bilateral contract

21 of 25 What type of contract is one in which all the terms and conditions of the agreement have been clearly stated and agreed to by all parties, whether verbally or in writing?

A.    An executed contract

B.     An implied contract

C.      An express contract

D.    A bilateral contract

22 of 25 The full consent of all parties to a contract is called

A.    memorandum of understanding.

B.     cooperative agreement.

C.      mutual agreement.

D.    service agreement.

23 of 25 Real estate contracts aren’t enforceable unless the parties have exchanged something of value called

A.    commerce.

B.      consideration.

C.     interchange.

D.    transposition.

24 of 25 At least how many people are needed to form a bilateral contract?

A.    1

B.      2

C.     4

D.    0

25 of 25 What type of contingency gives the buyer time to apply for and obtain financing?

A.    A Preliminary Title Contingency

B.      A Buyer Financing Contingency

C.     A Sale of Buyer’s Property Contingency

D.    A Home Inspection Contingency

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1.      List the six elements required of a valid contract.

2.      Define consideration.

3.      If deliberate deception, fraud, or false information is present, the agreement is what?

4.      What are the two commonly used legal descriptions in a contract?

5.      Explain performance and forbearance in contracts.

6.      Define express and implied contracts.

7.      List three types of contracts that California’s Statute of Frauds does NOT allow to be made orally.

8.      What is needed to establish the existence of an implied contract?

9.      Define bilateral and unilateral contracts.

10.  The same criteria need to be proven to enforce a bilateral or unilateral contract in court. The four criteria needed are what?

11.  In its simplest terms, unilateral contracts involve what?

12.  Are options always unilateral or bilateral contracts?

13.  Define executed contract.

14.  Explain executory contract and give one example.

15.  When all the requirements of an executory contract have taken place, the contract becomes what?

16.  How can contract interpretation issues be avoided?

17.  In terms of validity and enforceability, a court may construe the legal status of a contract in one of four ways. What are the four ways?

18.  Real estate contracts aren’t enforceable unless the parties have exchanged something of value. This value is called what?

19.  A voidable contract is one which initially appears to be valid, but is subject to what?

20.  Explain the Doctrine of Laches.

21.  What are contingencies?

22.  What must parties to a contract do when a contingency is removed or satisfied?

23.  List the four questions licensees should ask themselves to clearly understand a contingency?

24.  What does California law require the parties of a contract to do in order to fulfill a contingency?

25.  A contract terminates when fully executed by the parties. This is called what?

26.  Parties to a contract can agree to terminate, or renounce, the contract. What is the term for this action?

27.  Explain assignment of a contract.

28.  If an assignor does not receive a novation, what does this mean in regards to his or her obligations to a contract?

29.  Define breach of contract.

30.  What is the Statute of Limitations to sue for breach of contract in California?

31.  What is a tort?

32.  List five common tort claims made against real estate licenses.

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1 of 25 Which of these is an advantage of an exclusive buyer agency?

A.    Earning commissions from both the listing and selling side of the business is not possible.

B.      Buyers have greater confidence that they will see all the properties available from every source.

C.     A potential conflict of interest arises if 2 clients want to make offers on the same property.

D.    The exclusive buyer broker will not take listings.

2 of 25 In a broker-associate relationship, where a licensee is an employee, who controls the hours, schedule, and workload an agent has?

The licensee

The board secretary

The real estate board

The broker

3 of 25 Which offers is the broker required to present to the seller?

A.    The offers that are within 20% of asking price

B.     Negotiable offers

C.      All offers

D.    Prequalified offers

4 of 25 What is a database of properties for sale and is available for all real estate agents and brokers?

A.    Index of housing

B.      MLS

C.     GFD

D.    National home sales

5 of 25 What term describes when a buyer has the right to contract with other brokers for representation in the purchase of a property during the term of the agreement?

A.    Exclusive

B.     Exclusion

C.     Agency

D.     Non-exclusive

6 of 25 The most widely used listing agreement is the

A.    open listing.

B.     exclusive agency listing.

C.     net listing.

D.     exclusive right to sell.

7 of 25 What paragraph in a CAR Residential Listing Agreement states the broker is not responsible for damage to personal or real property or persons in association with the showing and sale of the property?

A.    Seller Representations

B.     Deposit

C.     Agency Relationships

D.     Security and Insurance

8 of 25 A written employment agreement between a broker and a licensee must be signed by

A.    the broker.

B.     the real estate board.

C.      both parties.

D.    the licensee.

9 of 25 An agent who ultimately caused a buyer to purchase a home and earned the commission is called

A.    a subagent.

B.     a transaction broker.

C.     a dual agent.

D.     the procuring cause agent.

10 of 25 Which section in a CAR Residential Listing Agreement contains a list of duties for the broker and seller?

A.    Seller Representations

B.      Broker’s and Seller’s Duties

C.     Agency Relationships

D.    Management Approval

11 of 25 What agreement authorizes a broker to represent an owner or landlord?

A.    An agency agreement

B.      An owner listing

C.     A tenant representation agreement

D.    A transaction agreement

12 of 25 A buyer’s agent is held to the same standard of performance in dealing with the buyer that the listing broker is held to in dealing with the

A.    title company.

B.     lender.

C.      seller.

D.    customer.

13 of 25 In a CAR Buyer Representation Agreement, who agrees to pay for reports, inspections, and meetings arranged by the broker on the buyer’s behalf?

A.    The broker

B.      The buyer

C.     The seller

D.    The lender

14 of 25 What provision in a CAR Exclusive Buyer Representation Agreement allows the broker to provide the agreement to an escrow agent, and the buyer authorizes buyer’s funds from escrow to pay the agreed upon compensation?

A.    Timing of Compensation

B.     Payments and Credits

C.      Escrow Assignment

D.    The Broker Right to Compensate

15 of 25 What section, in a CA residential listing agreement, states that the seller is granting the broker the exclusive and irrevocable right to sell or exchange the property described?

A.    Listing terms

B.     Items excluded and included

C.     Compensation to broker

D.     Exclusive right to sell

16 of 25 What section in a CAR Exclusive Buyer Representation Agreement states that the buyer understands that properties may be marketed online?

A.    Definition of Buyer

B.      Internet Advertising; Internet Blogs; Social Media

C.     Escrow Assignment

D.    Broker Right to Compensation

17 of 25 Under Agency Relationships, in a CAR Residential Listing Agreement, if a buyer is found through the broker or associate at the brokerage, the seller agrees to allow the broker to act as

A.    a transaction broker.

B.     a listing agent.

C.      a dual agent.

D.    a selling agent.

18 of 25 Most brokers prefer working with licensees as

A.    employees.

B.      independent contractors.

C.     subagents.

D.    other brokers.

19 of 25 Who is ultimately responsible for a licensees business related actions?

A.    The licensee

B.      The broker

C.     The real estate commission

D.    The brokerage franchise

20 of 25 What provision, in an independent contractor agreement, states that the broker and licensee will comply with all Federal and State Fair Housing laws?

A.    Compensation

B.     Non-employment Federal Tax Purposes

C.      Regulatory compliance

D.    Indemnification

21 of 25 In a CAR Exclusive Buyer Representation Agreement, how many days from the date of the agreement does a buyer have to provide the broker proof that he or she has the financial capability to purchase a property described in the agreement, if it’s not written in the agreement?

A.    7

B.     10

C.      5

D.    15

22 of 25 What section in a CAR Exclusive Buyer Representation Agreement states that the terms of an offer a buyer makes to a seller may be shared to others by the seller and/or listing agent?

A.    Confirmation

B.     Other Potential Buyers

C.     Broker Authorization

D.     Non Confidentiality of Offers

23 of 25 What provision, in an independent contractor agreement, includes the name of the broker and licensed real estate agent participating in the employment contract and the term of the agreement?

A.    Independent contractor relationship

B.     Obligations and duties

C.     Associates authority

D.     Parties and terms

24 of 25 What type of an agreement gives a broker the right to exclusively search for a home for a buyer and represent the buyer in the purchase?

A.    A nonexclusive representation agreement

B.     A residential purchase agreement

C.      An exclusive buyer representation agreement

D.    An open listing

25 of 25 What agreement authorizes a broker to represent a buyer or tenant in the search for a property to rent or purchase?

A.    A representative agreement

B.     A buyer compensation agreement

C.      A buyer agency

D.    A listing contract

Bonus  Chapter7 questions with NO answers

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1.      What type of contract will a new real estate licensee likely first experience?

2.      List three characteristics of licensees who are independent contractors?

3.      Although it’s usually easier for brokers to hire licensees as independent contractors rather than employees, what is the trade-off?

4.      What are the conditions of the IRS safe harbor test?

5.      What provision of an independent contractor agreement allows an agent to enter into agency agreements on behalf of the broker?

6.      What does a provision discussing employee benefits typically state in an independent contractor agreement?

7.      What are the typical conditions for terminating an independent contractor agreement?

8.      What is the main difference between the two CAR Independent Contractor Agreements?

9.      What is an important thing to remember about the enforceability of listing agreements?

10.  What is the major difference between an exclusive right to sell listing and an exclusive agency listing?

11.  Describe an open listing.

12.  How does a net listing create a conflict of interest for a broker?

13.  How must the listing price be written on the Exclusive Right to Sell Agreement?

14.  Which specific issues are discussed in the Compensation provision?

15.  If the sale of the property is prevented by someone other than the seller, when is compensation due to the broker?

16.  What does a seller acknowledge if the seller chooses to opt out of using a MLS?

17.  List the three specific tasks a broker is authorized to perform in order to achieve the duties outlined in the contract.

18.  How many days after an associate enters into an agreement with a seller does the broker have the option to cancel the listing agreement?

19.  What is the first course of action for the parties to resolve a dispute arising in regards to the compensation terms of the agreement?

20.  What does the Ownership, Title and Authority provision state?

21.  The buyer’s agent should mention the potential for the buyer to consult with whom?

22.  Agents know that an exclusive-right-to-sell or exclusive-right-to-buy agreement provides what?

23.  Define procuring cause agent.

24.  List three common misconceptions concerning buyer agency.

25.  According to the agreement, what is the definition of “buyer”?

26.  List three activities the buyer authorizes the broker to do during the term of the agreement.

27.  List three items regarding the scope of the broker’s duty that the buyer acknowledges when signing the agreement.

28.  As outlined in the provision discussing the buyer’s obligations, what is the buyer expected to do in regards to finding and purchasing a property?

29.  What are the parties agreeing to by initialing Paragraph 11B(2)?

30.  What is the main difference between the two CAR buyer representation agreements?

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1 of 25 What paragraph in a CAR Residential Purchase Agreement states the contract represents the final terms of the agreement unless the parties make changes in writing?

A.    Assignment

B.     Selection of Service Providers

C.      Time of Essence; Entire Contract; Changes

D.    Expiration of Offer

2 of 25 What term refers to a lessee’s ownership of a temporary right to exclusively possess land or property?

A.    Specific use

B.      Leasehold estate

C.     Term of lease

D.    Tenant activity

3 of 25 What is not a primary provision typically found in a residential sale contract?

A.    Parties

B.      Boundaries

C.     Legal description

D.    Price and terms

4 of 25 What financing term in a CAR Residential Purchase Agreement states that the buyer’s qualification of the loan is a contingency of the agreement?

A.     Loan Contingency

B.     Loan Contingency Removal

C.     Lender Limits on

D.    Loan Contingency Buyer Credits

5 of 25 In a CAR Residential Purchase Agreement,the four sections that follow the confirmation of acceptance are real estate brokers, escrow holder acknowledgement, presentation of offer and

A.    contingencies.

B.      rejection of offer.

C.     appraisals.

D.    counteroffer.

6 of 25 How many days does a seller have after acceptance, if not specified, to disclose if the property is a condominium or planned development?

A.    10

B.      7

C.     14

D.    21

7 of 25 What type of clause refers to conditions attached to either an offer to purchase property or a counteroffer to purchase a property?

A.    A demising clause

B.     A release clause

C.     An earnest clause

D.     A contingency clause

8 of 25 What clause in a CAR Residential Purchase Agreement states the agreement is contingent on a written appraisal of the property at no less than the purchase price?

A.    Verification of Loan Payment

B.      Appraisal Contingency and Removal

C.     All Cash Offer

D.    Buyer Deposit with Agent

9 of 25 What clause in a sales contract states under what conditions the buyer can cancel the contract without default and receive a refund of the earnest money?

A.     A financing contingency clause

B.     An earnest money deposit clause

C.     An escrow clause

D.    A closing clause

10 of 25 Which section in a CAR Residential Purchase Agreement provides information regarding registered sex offenders and includes a website for the buyer to search?

A.    Buyer’s Investigation of Property

B.      Megan’s Law Database Disclosure

C.     Natural and Environmental Hazards

D.    Statutory and Other Disclosures

11 of 25 What provision in a sales contract is the seller’s written summary of the property’s condition at the time of contracting for sale?

A.    Seller’s representations

B.     Right of rescission

C.      Residential property condition disclosure

D.    Broker’s representation and commission

12 of 25 Under Acceptance of Offer in a CAR Residential Purchase Agreement, which section states that brokers are not parties to the agreement?

A.    Escrow Holder Acknowledgement

B.     Presentation of Offer

C.     Non-participating Parties

D.     Real Estate Brokers

13 of 25 What type of contingency protects the buyer by ensuring that the property is valued at a price that is close to what is being offered by the buyer?

A.    A financing contingency

B.      An appraisal contingency

C.     A kick-out clause

D.    A house sale contingency

14 of 25 What type of contingency gives the buyer the right to have the home inspected within a specified period of time?

A.    A house sale contingency

B.     A specified contingency

C.      An inspection contingency

D.    An appraised contingency

15 of 25 What needs to happen to an offer in order for it to become a contract?

A.    The offer must be delivered.

B.     The offer must be received.

C.      The offer must be accepted.

D.    The counteroffer must be made.

16 of 25 What clause talks about how a landlord is leasing a property and a tenant is taking possession of a property?

A.    A possession clause

B.     A leasehold clause

C.      A demising clause

D.    A regulation clause

17 of 25 What action could a seller take if he or she cannot make a decision regarding an offer?

A.    An acceptance

B.     A rejection

C.     A counteroffer

D.     A failure to act

18 of 25 What type of contingency can be put in place when a buyer has already accepted an offer on their current home, but has not closed?

A.    A kick-out clause

B.      A settlement contingency

C.     A financing contingency

D.    A sale and settlement contingency

19 of 25 What section in a CAR Residential Purchase Agreement includes information regarding the first, second, VA or FHA loans?

A.    Deposit

B.     Financing

C.      Loans

D.    Balance of Down Payment

20 of 25 Within how many days after delivery of a disclosure can buyer cancel a CAR Residential Purchase Agreement Contract?

A.    7

B.     5

C.     10

D.     3

21 of 25 When a seller receives an offer on his or her property, what action would free him or her to consider other offers and also frees the buyer to consider other properties or to make another offer on the same property?

A.    A counteroffer

B.      A rejection

C.     An acceptance

D.    A referral

22 of 25 According to the CAR Residential Purchase Agreement, tax bills issued after close of escrow will be handled directly between

A.    seller and broker.

B.      seller and buyer.

C.     broker and buyer.

D.    lender and seller.

23 of 25 What section under the Dispute Resolution provision of a CAR Residential Purchase Agreement states that if mediation does not solve a dispute, the parties agree to use a neutral, binding arbitration to decide the matter?

A.    Additional Mediation and Arbitration Terms

B.     Mediation

C.     Conflict Resolution

D.     Arbitration and Disputes

24 of 25 What paragraph in a CAR Residential Purchase Agreement has five sections that outline the joint instructions of the buyer and seller to the escrow holder and defines the roles of the parties in the transaction?

A.     Joint Escrow Instructions to Escrow Holder

B.     Prorations of Property Taxes and Other Items

C.     Brokers

D.    Representative Capacity

25 of 25 What governs the making, interpretation, and enforcement of leases?

A.    The Residential Tenant Act

B.     Landlord Tenant Law

C.     The Law of Possession

D.     The Law of Contracts

Bonus  Chapter8 questions with NO answers

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1.      Describe the process of making an offer.

2.      What four options does a seller have when presented with an offer?

3.      Why is it in a buyer’s best interest to make the best offer possible?

4.      When does an offer become a contract?

5.      What information is included in the price and terms provision?

6.      What does the escrow clause in a sales contract do?

7.      What does a right of rescission clause set forth?

8.      What does a due-on-sale clause say?

9.      List the three topics discussed in the Agency paragraph.

10.  In CAR Residential Purchase Agreement, What does a buyer agree to do in Paragraph 3J(1) of the loan terms section?

11.  How does a buyer indicate the purchase agreement is contingent on the sale of his or her current property?

12.  What specific costs are addressed in Paragraph 7D in CAR Residential Purchase Agreement?

13.  What three options do the parties have on the purchase agreement for when the buyer will receive possession of the property?

14.  What does Paragraph 10A provide the buyer in regards to disclosure cancellation rights?

15.  List three topics addressed in the Time Periods; Removal of Contingencies; and Cancellation Rights paragraph.

16.  Describe the Final Verification of Condition provision.

17.  If a seller agrees to repair items on the property, when must they be completed?

18.  According to the Prorations paragraph, how will tax and other prorations be made?

19.  Describe what the parties are agreeing to by initialing under Paragraph 21B.

20.  How do the parties agree to resolve a dispute arising from the purchase agreement?

21.  What does the Selection of Service Providers paragraph state?

22.  List two items included in the Terms and Conditions of Offer paragraph.

23.  Who is responsible for initialing the Presentation of Offer section on Page 10 of the CAR Purchase Agreement?

24.  List the four paragraph titles on the CAR Counter Offer.

25.  What is a contingency clause?

26.  What are the two ways to write a “sell” contingency?

27.  What is a “kick-out” clause?

28.  List two general guidelines to follow when working with contingencies.

29.  What does the term “leaseholder estate” refer to?

30.  When does the Statute of Limitations require leases be in writing?

31.  List three provisions common in lease agreements.

32.  Describe the maintenance and repairs provision.

California: “Legal Aspects of Real Estate” Chapter 9 quiz with no answers

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1 of 25 How many days does a buyer have to conduct a lead-based paint inspection in a sales transaction?

A.    3

B.     15

C.      10

D.    30

2 of 25 What is a form that describes the physical condition of a property, including the presence and working condition of appliances and other features, any defects or issues with the physical property, and any possible encroachments and easements?

A.    A Home Inspection Form

B.      A Real Estate Transfer Disclosure Statement (TDS)

C.     A Property Inspection Report

D.    A survey

3 of 25 In what type of deed does the grantor warrant only against title defects or encumbrances not noted on the deed that may have occurred during the grantor’s period of ownership or trusteeship?

A.    An ownership deed

B.      A special warranty deed

C.     A quitclaim deed

D.    A special purpose deed

4 of 25 What must a seller or listing agent complete if there is actual knowledge of a property being in a natural hazard zone?

A.    An Energy Conservation Disclosure

B.     A Right to Home Inspection Disclosure

C.     An Environmental Disclosure Statement

D.     A Natural Hazards Disclosure Statement

5 of 25 California law outlines the distribution of real property through a process called

A.    lis pendens.

B.     life estate.

C.      intestate succession.

D.    quiet title.

6 of 25 When a licensee completes a TDS, the three main areas he or she will visually inspect includes the exterior of the property, the interior of the property and

A.    the land.

B.     utility markings.

C.      environmental hazards.

D.    encroachments.

7 of 25 What prevents a person from claiming a right or interest that is inconsistent with the person’s previous statements or acts?

A.    Title

B.     Entitlement

C.     Conveyance

D.     Estoppel

8 of 25 When the transfer of title to real estate uses a written instrument, the transfer is called

A.    acknowledgement.

B.      conveyance.

C.     consideration.

D.    habendum.

9 of 25 What written disclosure is required when a property is located within one mile of an area previously used for military training?

A.    A Live Ammunition Disclosure

B.      A Military Ordinance Location Disclosure

C.     A Service Training Disclosure

D.    A Governmental Risk Disclosure

10 of 25 What is the most common type of will used in California and is a formally written document usually prepared by an attorney?

A.    A holographic will

B.     An approved will

C.      A witnessed will

D.    A nuncupative will

11 of 25 What describes someone who enters, occupies, and uses another’s property without the knowledge or consent of the owner, or with the knowledge of an owner who fails to take any action over a statutory period of time?

A.    A settler

B.      An adverse possessor

C.     A squatter

D.    An illegal tenant

12 of 25 What does California law require the delivery of, before the transfer of title, on homes built before January 1, 1960, that are one-to-four units?

A.    A Lead-based Paint Disclosure

B.     Notice Regarding the Availability of Title Insurance

C.      A Homeowner’s Guide to Earthquake Safety

D.    A Disclosure of Death on Property

13 of 25 What type of deed offers the greatest protection of any deed?

A.    A grant deed

B.     A special warranty deed

C.      A full covenant and warranty deed

D.    A quitclaim deed

14 of 25 What percentage of the gross sales price must a buyer withhold and send to the IRS if the seller of real property is a “foreign person”?

A.     15%

B.     20%

C.     12%

D.    10%

15 of 25 What describes an unforced transfer of title by sale or gift from an owner to another party?

A.    Constructive notice

B.     Chain of title

C.     Act of acceptance

D.     Voluntary alienation

16 of 25 What is a legal written instrument used by an owner to transfer title to real estate voluntarily to another party?

A declaration

Fee simple

A deed

An easement

17 of 25 What term describes knowledge of a fact that a person could have or should have obtained?

A.    Hindsight

B.     Occurrence

C.     Realization

D.     Constructive notice

18 of 25 What results when a grantee has obtained defective title, or received title by defective means, but occupies the property as if he or she were the legal owner?

A.    Succession of title

B.     Acquisition

C.      Color of title

D.    Exclusive access

19 of 25 What is a court proceeding that generally settles a descendant’s estate, whether the person has died testate or intestate?

A.     Probate

B.     Deposition

C.     Codicil

D.    Action

20 of 25 What is a map, drawn to scale, of the division of land?

A.    A survey

B.      A plat

C.     A chart

D.    A plan

21 of 25 If a decedent died with a valid will, he or she is said to have died

A.    habendum.

B.     intestate.

C.     with heirs.

D.     testate.

22 of 25 What requires certain documents to be in writing to be enforceable?

A.    The Statute of Limitations

B.     The Law of Documentation

C.      The Statute of Frauds

D.    Habeas Corpus

23 of 25 Various government and public entities can transfer private property to the public sphere by the power of

A.    escheat.

B.      eminent domain.

C.     riparian rights.

D.    encumbrance.

24 of 25 What type of deed transfers real and potential interests in a property, whether an interest is known to exist or not?

A.    A limited deed

B.     A special warranty deed

C.     A fiduciary deed

D.     A quitclaim deed

25 of 25 What describes a transfer of title to real property without the owner’s consent?

A.    Indemnity

B.     conveyance.

C.     Chain of title

D.     Involuntary alienation

Bonus  Chapter9 questions with NO answers

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1.      What is voluntary alienation?

2.      What does the granting clause of a deed do?

3.      What action is necessary for a title to a property to pass to the grantee?

4.      Why is an acknowledgement important if it is not needed to make a deed valid?

5.      What two warranties are implied in a grant deed?

6.      What is important to know about a full covenant and warranty deed?

7.      What is the negative aspect of a bargain and sale deed with covenants?

8.      What is a quitclaim deed and what is probably its most common use?

9.      Define a will.

10.  Explain a nuncupative will.

11.  What does a probate proceeding do?

12.  What happens if a person dies intestate?

13.  What is involuntary alienation?

14.  What does condemnation refer to?

15.  Explain the process of escheat.

16.  List the four types of geological processes associated with accession due to natural causes.

17.  What is adverse possession?

18.  How can an owner prevent involuntary alienation by adverse possession?

19.  Define Estoppel.

20.  Why might property owners not want their property annexed?

21.  Where is a deed recorded?

22.  What is constructive notice?

23.  The best method of disclosing constructive notice is what?

24.  How can plat maps be beneficial to buyers and sellers?

25.  What is the purpose of the Real Estate Transfer Disclosure Statement (TDS)?

26.  What three areas of a property are licensees required to visually inspect when completing their section of the Transfer Disclosure Statement?

27.  When is the Natural Hazards Disclosure Statement required?

28.  What information does a seller confirm when providing the Smoke Detector Compliance Statement?

29.  List three situations where the Lead-Based Paint Disclosure is NOT required by Federal law.

30.  Although not mandated by federal or state law, who may require the Structural Pest Control Inspection and Certification Report?

31.  Explain the Military Ordinance Location Disclosure.

32.  How does the IRS define a foreign person as it relates to the Foreign Investment in Real Property Tax Act?

California: “Legal Aspects of Real Estate” Chapter 10 quiz with no answers

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1 of 25 How many years are attachment liens valid from the date of the writ of attachment?

A.    4 years

B.     7 years

C.     5 years

D.     3 years

2 of 25 A creditor who places a lien on a property is called

A.    the lienee.

B.     the mortgagor.

C.     the mortgagee.

D.     the lienor.

3 of 25 California law requires a lien filer to be a licensed contractor unless the homeowner knows the worker was unlicensed and the work performed was less than how much?

A.    $700.00

B.     $1,000.00

C.      $500.00

D.    $1,200.00

4 of 25 What describes involuntary, specific liens against real property by a local government entity such as street or sewer improvements?

A.    An HOA lien

B.     A state tax lien

C.      A special assessment

D.    A judgment lien

5 of 25 For how long can a California income tax lien be in force?

A.    A maximum of 10 years

B.      A maximum of 30 years

C.     A maximum of 20 years

D.    A maximum of 5 years

6 of 25 What type of lien is also known as a construction lien?

A.    A vendor’s lien

B.     A federal lien

C.      A mechanic’s lien

D.    An involuntary lien

7 of 25 What type of lien occurs when someone loses a lawsuit and a judgment is placed against real property to pay for the judgment?

A.    A real estate tax lien

B.     A franchise lien

C.      A judgment lien

D.    A state inheritance tax lien

8 of 25 What type of lien is one that a legal process places against a property which the property owner did not agree or consent to?

A.    A statutory lien

B.      An involuntary lien

C.     An equitable lien

D.    A judgment lien

9 of 25 What is a nonfinancial encumbrance that restricts the use of a property itself and enables others to use the property, regardless of the owner’s desires?

A.    A lien

B.     A profit encumbrance

C.      An easement

D.    A restriction

10 of 25 What type of superior lien does local government entities place against certain properties to ensure payment for local improvement projects such as new roads, schools, sewers or libraries?

A.    An ad valorem tax lien

B.      A special assessment lien

C.     A mechanic’s lien

D.    A judgment lien

11 of 25 What type of lien exists when the IRS sends a taxpayer a bill entitled “Notice for Demand and Payment” and the bill is either ignored or not paid in full?

A.    An equitable lien

B.     A statutory lien

C.     A general lien

D.     A federal lien

12 of 25 The two types of homestead exemptions in California are the automatic homestead exemption and the

A.    implied homestead exemption.

B.      declared homestead exemption.

C.     express homestead exemption.

D.    equitable homestead exemption.

13 of 25 What homestead law term describes the discontinued use of property?

A.    Discarded

B.     Uninhabited

C.     Revoked

D.     Abandoned

14 of 25 What type of lien secures a purchase money mortgage, a seller’s loan to a buyer to finance the sale of property?

A.    A federal lien

B.     An involuntary lien

C.      A vendor’s lien

D.    A judgment lien

15 of 25 A lien is put on a property by

A.     creditors.

B.     owners.

C.     lessees.

D.    sellers.

16 of 25 Once a lien is placed on a property, the most common way to remove it is for the property owner to

A.    request a release.

B.     file for bankruptcy.

C.      pay the debt.

D.    retain an attorney.

17 of 25 Many states have enacted their own homestead laws that specify

A.    foreclosure timeframe.

B.      exemption amounts for individuals and families.

C.     minimum sale price.

D.    payment for selling costs.

18 of 25 What is the term used to describe an interest in and a right to real property that limits the legal owner’s freehold interest?

A.    An encroachment

B.      An encumbrance

C.     A deed restriction

D.    A license

19 of 25 What is an option a creditor can obtain to receive payment by forcing the sale of attached property and collect a debt?

A.     A writ of execution

B.     A constructive notice

C.     A right of rescission

D.    A credit assessment

20 of 25 What puts a mechanic’s lien on the balance of funds from a sale?

A.    A lien release

B.      A stop notice

C.     A notice of responsibility

D.    A notice of cessation

21 of 25 What does a writ of attachment do?

A.     It stops a debtor from selling or concealing property.

B.     It forces the sale of a property.

C.     It protects certain property from being sold.

D.    It determines the sale price of a property.

22 of 25 What is not one of the four ways a judgment lien can be terminated?

A.    Lien payment

B.     Lien expiration

C.      Discharge by exemption

D.    Discharge by creditor

23 of 25 What type of laws protect family members against losing their homes to general creditors attempting to collect on debts?

A.    Land use laws

B.     Familial laws

C.      Homestead laws

D.    Real estate laws

24 of 25 Once a mechanic’s lien has been paid, what must be recorded to show the lien has been discharged and satisfied?

A.    A deficiency judgment

B.     Equitable title

C.     An expense report

D.     A lien release

25 of 25 Which of the following is NOT a superior lien?

A.    Special Assessment

B.     Federal and State Inheritance Tax

C.      Federal Income Tax

D.    Real Estate Tax

Bonus  Chapter10 questions with NO answers

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1.      Define an encumbrance.

2.      List three types of nonfinancial encumbrances.

3.      What is the purpose of deed restrictions?

4.      What is a lien?

5.      What are four legal features of a lien?

6.      List the two main differences between a deed of trust and mortgage.

7.      What is an involuntary lien?

8.      Compare general and specific liens.

9.      What two factors primarily determine lien priority?

10.  Give an example of when lienholders may subordinate their liens.

11.  What types of liens are considered superior liens?

12.  Which tax liens are junior liens?

13.  Define a judgment lien.

14.  List the four ways a judgment lien can be terminated.

15.  The homestead exemption does not apply to which two specific types of judgment liens?

16.  What is the purpose of a writ of attachment?

17.  What does a mechanic’s lien do?

18.  What is the purpose of a preliminary notice?

19.  If a notice of completion or cessation is filed by a homeowner, how long do general and subcontractors have to file a mechanic’s lien against the property?

20.  What happens if a lienor does not enforce a mechanic’s lien within 90 days of it being recorded?

21.  Describe a property tax lien.

22.  List the four ways a federal income tax lien can be removed.

23.  How long is a California income tax lien valid?

24.  What is a municipal utility lien?

25.  What is the purpose of homestead laws?

26.  List four types of liens not subject to the homestead exemption?

27.  When a homestead property is foreclosed by a judgment creditor, who is the first to receive sale proceeds?

28.  What additional benefits does a California homeowner gain by recording a homestead declaration?

California: “Legal Aspects of Real Estate” Chapter 11 quiz with no answers

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1 of 25 What was passed by Congress in 1977 to prevent redlining and to encourage banks and thrifts to help meet the credit needs of all segments of their communities, including low-and moderate-income neighborhoods?

A.    The Economic Recovery Act

B.     The Equal Opportunity Act

C.     The Tax Relief Act

D.    + The Community Reinvestment Act

2 of 25 What transfers legal title to a lienholder and something a defaulting borrower may use to avoid court actions and costs by voluntarily deeding the property to the mortgagee?

A.    Voluntary assignment

B.     A strict foreclosure

C.     + Deed in lieu of foreclosure

D.    Conveyance

3 of 25 The primary method of foreclosure in California is the

A.    strict foreclosure.

B.     judicial foreclosure.

C.     voluntary foreclosure.

D.    + non-judicial foreclosure.

4 of 25 What type of mortgage loan is the most common and generally viewed as the most secure?

A.    An FHA loan

B.     + A conventional mortgage

C.     A government backed loan

D.    A rural housing loan

5 of 25 What type of clause requires a borrower to pay a penalty or late charge for any payments that are considered to be late?

A.    A graduated payment clause

B.     + A late payment penalty clause

C.     A lender clause

D.    A pay off clause

6 of 25 In an adjustable rate loan, index plus the margin establishes the

A.    adjustment period.

B.     initial rate.

C.     amortization period.

D.    + calculated rate.

7 of 25 Which of these regulates how borrowers apply for credit and how lenders evaluate income and grant credit?

A.    The Federal Trade Commission

B.     + The Equal Credit Opportunity Act

C.     The Department of Housing and Urban Development

D.    The Department of Fair Housing

8 of 25 What describes the right of a mortgagor who has defaulted on a note to redeem or get back the title to the property by paying off the entire mortgage note before the foreclosure sale?

A.    + The right of redemption

B.     The right of rescission

C.     The right of action

D.    The right of payment

9 of 25 What conveys title rights in a property over to an assigned trustee?

A.    A right of assignment

B.     A subordination clause

C.     + A deed of trust

D.    A release of deed

10 of 25 What authorizes an official, such as the county sheriff, to seize and sell a foreclosed property?

A.    A right of redemption

B.     A right to sell

C.     + A writ of execution

D.    A power of sale

11 of 25 What refers to all calendar days except Sundays and holidays specified in 5 U.S.C. 6103 or the observed legal holiday?

A.    A weekday

B.     + A business day

C.     A nautical day

D.    A bank day

12 of 25 What term describes a measure of economic conditions?

A.    Margin

B.     Rate

C.     + Index

D.    Deficit

13 of 25 What involves the transfer of an interest in land as security for a loan or other obligation?

A.    A deed

B.     + A mortgage

C.     A transaction

D.    A lease

14 of 25 What describes a legal procedure in which the property that is used as security for a debt is sold to satisfy the debt in the event of a default?

A.    An eviction

B.     A seisen

C.     A repossession

D.    + A foreclosure

15 of 25 What type of mortgage loan allows a borrower who has an existing loan to get another loan from a second lender without paying off the first loan?

A.    + A wraparound mortgage

B.     A swing loan

C.     A bridge loan

D.    A construction mortgage

16 of 25 What Act requires each of three nationwide credit reporting companies to give consumers a free copy of their credit report, at their request, once every 12 months?

A.    The Credit Reporting Act

B.     The Home Mortgage Disclosure Act

C.     + The Fair Credit Reporting Act

D.    The Mortgage Choice Act

17 of 25 In a graduated payment mortgage the interest owed and not paid in the initial months is added back to the principal causing what is referred to as

A.    indemnification.

B.     recompensation.

C.     graduated subsidy.

D.    + negative amortization.

18 of 25 What clause, in a non-judicial foreclosure, enables a mortgagee to order a public sale without a court decree?

A.    A due-on-sale clause

B.     + A “power of sale” clause

C.     A subordination clause

D.    A release clause

19 of 25 What covenant in a deed of trust document states that if the borrower violates any of the covenants of the contract, the beneficiary may call for payment of the loan in full and the trustee may sell the property after he or she has filed all the proper notices?

A.    Reconveyance

B.     + Acceleration

C.     Assignment of rents

D.    Expenditures

20 of 25 What describes an interest-only note, whereby the borrower agrees to pay the interest periodically and to pay the entire principal when the note comes due?

A.    An installment note

B.     A periodic note

C.     A rate note

D.    + A straight note

21 of 25 What clause in a standard mortgage states that if the borrower repays the debt when due, the words “of grant” are void, the mortgage is canceled, and the title is given back to the borrower?

A.    An acceleration clause

B.     A seisen clause

C.     + A defeasance clause

D.    A granting clause

22 of 25 What was created in 1974 to ensure that the buyer and seller in a residential real estate transaction, involving a new first mortgage loan, have knowledge of all settlement costs?

A.    The Consumer Financial Disclosure Act

B.     The Real Estate Protection Agency

C.     The Department of Housing and Urban Development

D.    + The Real Estate Settlement Procedure Act

23 of 25 With what type of loan does the monthly payment for principal and interest gradually increase by a certain percentage each year for a certain number of years and then it levels off for the remaining term of the mortgage?

A.    A purchase money mortgage

B.     A package mortgage

C.     + A graduated payment mortgage

D.    An ARM

24 of 25 What acceleration clause requires the borrower to pay off the entire mortgage debt when the property is sold?

A.    A subordination clause

B.     A “subject to” clause

C.     + A due-on-sale clause

D.    A “power of sale” clause

25 of 25 What type of prepayment clause prohibits the borrower from paying the mortgage loan in full before a specific date?

A.    A lienholder clause

B.     A lender clause

C.     A due-on-sale clause

D.    + A lock-in clause

Bonus  Chapter11 questions with NO answers

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1.      Define leverage.

2.      What document is a real estate promissory note attached to?

3.      List three provisions that are common to most notes.

4.      What does the covenant of seisin provision of a mortgage document state?

5.      What is a deed of trust?

6.      List two reasons that lenders prefer to use the deed of trust when making loans.

7.      Define acceleration.

8.      List two differences between a mortgage and a deed of trust.

9.      What is California’s position regarding late payments on a loan?

10.  Describe a lock-in clause.

11.  What is the main advantage and what is the main disadvantage to a borrower to purchase a property “subject to” the mortgage?

12.  What types of transactions often include a release clause?

13.  Define foreclosure.

.

14.  What three types of foreclosure processes enforce mortgage liens?

15.  Explain when a judicial foreclosure is used and how a lender files a suit.

16.  What is a deficiency judgment?

17.  What does a “power of sale” provision in a deed of trust or mortgage allow a lender to do?

18.  Describe a Notice of Default.

19.  In a non-judicial foreclosure sale, the new purchaser will receive a trustee’s deed to the property. But what potential problem exists?

20.  What is the main problem with a strict foreclosure?

21.  Most conventional loans require the borrower to make how much of a down payment?

22.  List two advantages of conventional loans over government-backed loans.

23.  What are the two distinct features of fixed-rate, fully-amortized loans?

24.  What is a payment cap?

25.  Why might a graduated payment mortgage be appealing to someone who is just starting a career?

26.  What is a release clause and in what type of mortgage would you find this clause?

27.  Describe a reverse annuity mortgage.

28.  Define a purchase money mortgage.

29.  What is the purpose of the Real Estate Settlement Procedures ACT (RESPA)?

30.  List three types of loans that do not require compliance with the TRID rule?

31.  When must the Loan Estimate be delivered to the borrower?

32.  Who is generally responsible for ensuring the Closing Disclosure is delivered to a buyer no later than 3 business days before closing?

33.  What does the Truth in Lending Act require lenders to disclose to buyers?

34.  Who does Regulation Z apply to?

35.  Why was the Community Reinvestment Act passed?

36.  List three warning signs of predatory lending

California: “Legal Aspects of Real Estate” Chapter 12 quiz with no answers

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1 of 25 Who must sign and acknowledge escrow instructions?

A.    The buyer

B.     The broker

C.      The seller and buyer

D.    The seller

2 of 25 Escrow doesn’t officially close until the deed has been

A.    signed.

B.      recorded.

C.     transferred.

D.    conveyed.

3 of 25 Within how many days is a creditor generally required to provide the Loan Estimate of the receipt of the consumer’s loan application?

A.    10 business days

B.     30 business days

C.     7 business days

D.     3 business days

4 of 25 What type of special title insurance policy is used when a property is being purchased through a land sales contract, purchase money mortgage, or purchase money trust deed?

A.    A leaseholder policy

B.     An early issue endorsement

C.      A vendee policy

D.    An oil and gas interest policy

5 of 25 What settlement process refers to signing and transferring all documents and distributing funds?

A.    Commitment

B.     Conveyance

C.     Servicing

D.     Closing

6 of 25 Who is RESPA administered by?

A.    The Office of Fair Housing (OFH)

B.      The Consumer Financial Protection Bureau (CFPB)

C.     The Office of Equal Opportunity (OEO)

D.    The Department of Housing and Urban Development (HUD)

7 of 25 When can licensees recommend specific individuals or companies to their clients and accept a referral fee?

A.    When there is a dual agency created

B.      Never

C.     When the licensee is also acting as an escrow agent

D.    When the licensee is acting as a transaction broker

8 of 25 What was created in 1974 to ensure that a buyer and seller in a residential real estate transaction have knowledge of all settlement costs?

A.    The Real Estate Acquisition Act (REAA)

B.     The Residential Real Estate Act

C.      The Real Estate Settlement and Procedures Act (RESPA)

D.    The Settlement and Real Estate Transaction Act

9 of 25 What term describes the process in which a disinterested third party holds all money and documents relating to a transaction until all terms and conditions have been satisfied?

A.    Transference

B.     Recording

C.      Escrow

D.    Modification

10 of 25 Interest is always paid

A.    in advance.

B.     by the lender.

C.      in arrears.

D.    before closing.

11 of 25 Which section of a Closing Disclosure includes names and addresses for both the borrowers and sellers and the lender’s name?

A.    The closing information

B.     The loan information

C.     The summary information

D.     The transaction information

12 of 25 What describes written authorization and instructions for how an escrow agent will perform in a transaction?

A.    Escrow analysis

B.     Performance instructions

C.     Agent authorization

D.     Escrow instructions

13 of 25 Items that are paid in advance such as property taxes are called

A.    credits.

B.      prepaid expenses.

C.     prorations.

D.    advancements.

14 of 25 Which section of a Closing Disclosure shows the actual payments the borrower will make for principal and interest and mortgage insurance, an estimated amount for the escrow payment, and the total estimated monthly mortgage payment?

A.    Loan terms

B.     Calculations

C.      Projected payments

D.    Descriptions

15 of 25 What refers to the succession of property owners of record dating back to the original grant of title from the state to a private party?

A.    Deed-in-lieu

B.     Clouded title

C.     Eminent domain

D.     Chain of title

16 of 25 A quiet title suit is also called a suit to remove

A.    an assignment.

B.     a defect.

C.      a cloud.

D.    a contingency.

17 of 25 Which part of a Loan Disclosure indicates whether or not the lender will allow a loan assumption on a future sale or transfer?

A.    Demand feature

B.      Assumption

C.     Escrow Account

D.    Other disclosures

18 of 25 What refers to money that the buyer or seller needs to pay at closing?

A.    A fee

B.     A credit

C.     A settlement

D.     A debit

19 of 25 What type of deed transfers title from the seller to the buyer?

A.    A deed of reconveyance

B.     A deed of trust

C.      A grant deed

D.    A specific deed

20 of 25 In a real estate transaction what party chooses the escrow holder?

A.    The seller

B.      Either party

C.     The buyer

D.    The lender

21 of 25 What is an extended title coverage policy that insures against many of the items excluded in the CLTA standard policy?

A.    The Mortgage Title Insurance Policy

B.      The American Land Title Association (ALTA)

C.     The Real Property Title Association (RPTA)

D.    The California Title Association

22 of 25 What is a contract of indemnity where an insurance company agrees to compensate the insured, either a homeowner or a lender, for financial losses that the insured has incurred because of defects to the title of the property?

A.    A transfer of ownership

B.      A title insurance policy

C.     A title report

D.    Hazard insurance

23 of 25 What describes expenses that the seller incurred but have not yet been billed for at the time of closing?

A.    Settlement expenses

B.     Mortgage expenses

C.      Accrued expenses

D.    Estimated expenses

24 of 25 The two methods that are typically used when closing agents and lenders calculate items that need to be prorated are the 12-month/360 day method and the

A.     365 day method.

B.     half year method.

C.     prorated calculation method.

D.    6-month/180 day method.

25 of 25 What is the standard title policy in California?

A.    The California Home Title Policy

B.     The First American Land Title Policy (FALTP)

C.     The American Title Association

D.     The California Land Title Association (CLTA)

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1.      What is escrow?

2.      Describe an escrow agent.

3.      When can a broker act as an escrow agent?

4.      List the five basic steps of the escrow process.

5.      What are escrow instructions?

6.      What activities are all escrow agents prohibited from doing?

7.      Besides the escrow agent, who else has responsibilities to ensure the closing occurs smoothly and on time?

8.      List three duties of real estate agents during the escrow process.

9.      Explain marketable title.

10.  What is the purpose of the preliminary title report?

11.  Describe a title insurance commitment.

12.  Who needs title insurance and why?

13.  Explain why title insurance is unlike other forms of insurance.

14.  Who typically pays for the homeowner’s title insurance at closing?

15.  What is the difference between CLTA and ALTA policies?

16.  What items are not covered by any title insurance policy?

17.  Although it’s not required, why is it a good idea for agents to attend escrow closings?

18.  What are closing costs?

19.  When does an escrow close?

.

20.  What is the Foreign Investment in Real Property Tax Act?

21.  What does prorated mean?

22.  Name three items that are prorated for closing.

23.  How are prorated items shown on the closing statement?

24.  Closing agents and lenders typically use one of two methods when calculating items that need to be prorated. Name the two methods.

25.  Explain the Real Estate Settlement and Procedures Act (RESPA).

26.  What types of closings must follow the TRID rule?

27.  When must the Closing Disclosure be delivered to the borrower?

28.  Define consummation.

29.  Which pages of the Closing Disclosure will always look the same regardless of the loan type?

30.  What information does the Loan Terms section of Page 1 provide?

31.  What does the Other Costs section include on Page 2 of the Closing Disclosure?

32.  What is a borrower affirming by signing the Confirm Receipt section of the Closing Disclosure?

California: “Legal Aspects of Real Estate” Chapter 13 quiz with no answers

         

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1 of 25 Who enforces fair housing laws?

A.    The Department of Community Development

B.     The Secretary of State

C.     The Office of Equal Opportunity

D.    + The Department of Housing and Urban Development

2 of 25 What 1959 Act provides protection from discrimination by all business establishments in California, including housing and public accommodations?

A.    The Housing and Community Development Act

B.     The Rehabilitation Act

C.     + The Unruh Civil Rights Act

D.    The Architectural Barriers Act

3 of 25 If a seller chooses not to follow fair housing laws the agent should

A.    refer the listing.

B.     + refuse the listing.

C.     take the listing anyway.

D.    sue the seller.

4 of 25 How much time does a person have to file a complaint with the Department of Fair Employment and Housing?

A.    Within 3 years from the incident

B.     + Within a year from the incident

C.     Within 2 years from the incident

D.    Within 2 years from the incident

5 of 25 What Act added sex to the list of protected classes in 1974?

A.    The Fair Housing Amendment Act

B.     The Housing Discrimination Act

C.     + The Housing and Community Development Act

D.    The Community Reinvestment Act

6 of 25 In what landmark case did the Supreme Court prohibit racial segregation of public schools?

A.    Buchanan v. Warley

B.     Plessy v. Ferguson

C.     + Brown v. Board of Education

D.    Shelley v. Kraemer

7 of 25 When HUD receives a complaint, how many days may pass to determine if there is reasonable cause to charge discrimination?

A.    30

B.     60

C.     75

D.    + 100

8 of 25 If a seller refuses to consider an offer because the prospective buyer is a member of a protected class the listing should be

A.    referred to the broker.

B.     extended.

C.     offered at a lower price.

D.    + terminated.

9 of 25 What is defined as advertising that indicates a preference, limitation or discrimination based on race, color, religion, handicap, sex, familial status or national origin?

A.    + Discriminatory advertising

B.     Behavioral advertising

C.     Predatory advertising

D.    Corporate advertising

10 of 25 If a licensee lists a home in a predominantly minority neighborhood, how can he or she avoid steering when advertising in newspapers?

A.    Advertise the property as multi-cultural.

B.     + Advertise in a city-wide newspaper.

C.     Have the Equal Opportunity slogan in the advertising.

D.    Advertise in the minority neighborhood’s newspaper.

11 of 25 If an agent is faced with questions outside the realm of his or her expertise it is best for the agent to refer such questions to

A.    an inspector.

B.     an appraiser.

C.     + an expert.

D.    a broker.

12 of 25 Title VIII of the Civil Rights Act of 1968 is also known as

A.    the Equal Opportunity Act.

B.     + the Fair Housing Act.

C.     the Familial Status Act.

D.    the Protected Classes Act.

13 of 25 What is an example of discrimination in lending?

A.    Denying membership to MLS

B.     Telling a person that a property is not for sale

C.     + Refusing to purchase a loan

D.    Stating a property is restricted

14 of 25 Testers who encounter fair housing discrimination have the legal ability to

A.    fine a licensee.

B.     + file complaints under federal or state agencies.

C.     revoke a real estate license.

D.    negotiate a listing contract.

15 of 25 What Act was passed in 1977 to prevent redlining and to encourage banks and thrifts to help meet the credit needs of all segments of their communities?

A.    The Housing Mortgage Act

B.     The Equal Credit Act

C.     + The Community Reinvestment Act

D.    The Fair Credit Reporting Act

16 of 25 How long does a lender have to inform an applicant that he or she was rejected for a home loan?

A.    60 days

B.     + 30 days

C.     90 days

D.    120 days

17 of 25 What term describes when HUD attempts to resolve a complaint by getting assurance from the person against whom the complaint was filed that he or she will remedy the alleged violation?

A.    Condonation

B.     Arbitration

C.     + Conciliation

D.    Intervention

18 of 25 What Act prohibits lenders from discriminating against applicants on the basis of race, color, religion, national origin, sex, marital status, age or dependency on public assistance?

A.    The Real Estate Settlement Procedures Act

B.     The Fair Credit Reporting Act

C.     The Truth in Lending Act

D.    + The Equal Credit Opportunity Act

19 of 25 What 1977 Act prohibits financial institutions from discriminating in loan activities on the basis of race, color, religion, marital status, national origin ancestry or sex?

A.    The Home Mortgage Act

B.     The Equal Credit Act

C.     The Fair Lending Act

D.    + The Housing Financial Discrimination Act

20 of 25 What is defined as a simulated housing transaction designed to obtain evidence of different treatment based on an individual’s protected class status?

A.    Measuring

B.     Streaming

C.     + Testing

D.    Blockbusting

21 of 25 Communities view licensees as their real estate

A.    appraisers.

B.     board.

C.     inspectors.

D.    + experts.

22 of 25 What describes the channeling of home buyers toward or away from homes in certain neighborhoods in order to preserve or alter the makeup of that neighborhood?

A.    Blockbusting

B.     Filtering

C.     Redlining

D.    + Steering

23 of 25 What should be prominently displayed in all broker’s offices to comply with fair housing policies?

A.    The Housing Discrimination Act

B.     Title VIII of the Civil Rights Act

C.     The office anti-discrimination policies

D.    + The Equal Opportunity Poster

24 of 25 When a licensee induces someone to sell his or her property by telling him or her that persons of a certain protected class are moving into the neighborhood it is called

A.    steering.

B.     + panic selling.

C.     redlining.

D.    protecting classes.

25 of 25 What term describes the act of restricting the number of loans in certain areas of a community because its racial or ethnic makeup?

A.    Steering

B.     + Redlining

C.     Blockbusting

D.    Filtering

Bonus  Chapter13 questions with NO answers

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1.      What are civil rights laws in the real estate industry designed to do?

2.      What is significant about the Fair Housing Amendments Act of 1988?

.

3.      Describe the exemption that exists for familial status discrimination?

4.      If a person feels like he or she has been discriminated against, how long does that person have to file a complaint?

5.      What was the significance of the Plessy v. Ferguson Supreme Court decision of 1896?

6.      Why is it important for licensees to understand the Americans with Disabilities Act?

.

7.      Salesperson Sally tells her senior citizen buyers that the home they want to view is located in a neighborhood with several small children and loud teenagers. She tells them they would not be comfortable in this home and she shows them a list of homes in other neighborhoods she thinks would be more appropriate. What would you say about Sally’s behavior?

8.      List three examples of discrimination that still occur in the real estate industry today.

9.      What is the definition of discriminatory advertising?

10.  In general terms, what kind of advertising would be considered acceptable and what would be considered discriminatory?

11.  Give four examples of words or phrases that would be considered discriminatory, and three that would not, with regard to handicap when writing an ad.

12.  When doing newspaper advertising, how could you avoid an impression of racial steering?

13.  What does the Equal Credit Opportunity Act prohibit?

14.  Why was the Community Reinvestment Act passed?

15.  According to the Fair Credit Reporting Act, from whom must a lender seek authorization to get a consumer’s credit report?

16.  What does the Home Mortgage Disclosure Act require?

17.  Which additional discriminatory classes does the California Fair Employment and Housing Act include that the Federal Fair Housing Act does not?

18.  Describe the Unruh Act.

19.  What remedies does the Department of Fair Employment and Housing provide to victims of fair housing discrimination?

20.  What does the Holden Act prohibit?

21.  List three examples of discriminatory practices in real estate.

22.  Describe panic selling.

23.  List two steps a broker should take to ensure compliance with fair housing laws.

24.  Why is it important for licensees to know fair housing laws?

25.  If a client asks a licensee’s opinion about a home or neighborhood, how should the licensee respond?

26.  What information should a listing agent discuss with a seller before taking the listing?

27.  What must an agent tell a seller if he or she asks about the color, religion, ethnicity, familial status, or other “protected class” characteristics of the buyer?

.

28.  How should an agent respond if a seller says he or she wants to wait for another offer because the buyers with the current offer “aren’t a right fit for the house”?

29.  What is testing?

30.  How can testing be beneficial?

31.  Because the Supreme Court has ruled testing is legal, how should agents view the practice of testing in real estate?

32.  What is the best way to avoid fair housing complaints?

California: “Legal Aspects of Real Estate” Chapter 14 quiz with no answers

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1 of 25 Which of these is not a type of leasehold estate?

A.    Estate for Years

B.     Estate at Will

C.     Estate at Sufferance

D.     Estate at Conveyance

2 of 25 What type of lease conveys a leasehold interest to an owner of a cooperative?

A.    A land lease

B.     A percentage lease

C.     An index lease

D.     A proprietary lease

3 of 25 What describes the transfer by a tenant, the sub lessor, of a portion of the leasehold interest to another party, the sublessee, through the execution of a sublease?

A.     Subletting

B.     Renting

C.     Owner financing

D.    Assumption

4 of 25 If a tenant is in default what can the landlord file to repossess the property and evict the tenant?

A.    A suit for default

B.     A breach of contract

C.     An order of removal

D.     A suit for possession

5 of 25 What describes a guarantee that a property meets the minimum health and housing codes?

A.    A home warranty

B.     A tenancy guarantee

C.     A home service warranty

D.     A warranty of habitability

6 of 25 How much notice must a landlord give a tenant to enter a rental property in most situations?

A.    2 days

B.      24 hours

C.     12 hours

D.    8 hours

7 of 25 What describes a report that is filled out by the landlord stating the condition of a property upon the tenant’s moving in and moving out of the property?

A.    An inspection report

B.     A housing report

C.     A residential property form

D.     A statement of property condition

8 of 25 What Act is a model law enacted as a blueprint for state laws to regulate leasing and management practices of landlords with residential properties?

A.    The Residential Community Act

B.     The Property Accommodations Act

C.      The Uniform Residential Landlord and Tenant Act

D.    The Tenancy Regulation Act

9 of 25 What refers to a government regulation of the amount of rent a landlord may charge a tenant?

A.    A cap

B.     Lease regulation

C.     Income stabilization

D.     Rent control

10 of 25 In what type of lease does the landlord pay the property’s operating expenses, including utilities, repairs, and maintenance?

A.    A graduated lease

B.      A gross lease

C.     A net lease

D.    An index lease

11 of 25 What describes money that a tenant deposits with the owner, in advance of possession, for the repair of any damages for which the tenant is responsible?

A.    A lease deposit

B.     A partial payment

C.      A security deposit

D.    An escrow deposit

12 of 25 In a lease arrangement the owner is the landlord and the renter is the

A.    lessor.

B.      tenant.

C.     proprietor.

D.    freeholder.

13 of 25 What is a lease provision that gives the tenant the right to extend the lease for an additional period of time and sets forth the terms for the renewed lease?

A.    An extension

B.      An option to renew

C.     A recommence clause

D.    A time revision

14 of 25 What term describes the giving up of a lease or other estate, thereby ending any further obligations?

A.    Breach

B.     Condemnation

C.      Surrender

D.    Voluntary agreement

15 of 25 How many days notice to terminate must a tenant be given in a mobile home lease agreement?

A.    15 days

B.     45 days

C.      60 days

D.    30 days

16 of 25 If both parties agree to terminate a lease it is called what?

A.    Term expiration

B.      Voluntary agreement

C.     Condemnation

D.    Abandonment

17 of 25 What type of suit compels the defaulting party to perform the contract obligation that was breached?

A.    A suit for breach of duty

B.      A suit for specific performance

C.     A suit for possession

D.    A suit for misrepresentation

18 of 25 What refers to the right a tenant has to exclusively have possession of a rental property?

A.    Possessor rights

B.     Tenancy rights

C.      Exclusive use

D.    Specific use

19 of 25 How many days notice, before the date of increase, must be given to homeowners in a mobile home lease agreement, regarding the increase of rent?

A.    30 days

B.      90 days

C.     45 days

D.    60 days

20 of 25 When using the repair-and-deduct option, how long should a tenant wait for a landlord to fix items before choosing to fix them him or herself if the problem is not severe?

A.    7 days

B.     21 days

C.      30 days

D.    60 days

21 of 25 What option allows a tenant to arrange and pay for repairs, then deduct the amount from rent payments?

A.    The tenant repair option

B.      The repair-and-deduct-option

C.     The right of refusal

D.    The landlord settlement option

22 of 25 Who is responsible for maintaining a residential property in a condition fit for human occupancy?

A.    The city

B.     The tenant

C.     The lessee

D.     The landlord

23 of 25 What describes a lease where the rent is based on a percentage of the monthly or annual gross sales made on the site?

A.    A proprietary lease

B.     An index lease

C.      A percentage lease

D.    A net lease

24 of 25 What is an oral or written agreement that creates and governs, by express or implied terms, a landlord-tenant relationship?

A.    An agency

B.     A sales contract

C.     A listing

D.     A lease

25 of 25 What lease clause talks about the landlord leasing the property and the tenant taking possession of the property?

A.    Capacity to contract

B.     Rent

C.      Demising clause

D.    Description

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1.      What is theUniform Residential Landlord and Tenant Act (URLTA)?

2.      Describe a lease.

3.      Which type of leasehold estate is commonly referred to as periodic tenancy?

4.      What is estate at sufferance?

5.      What is a lease agreement?

6.      When is a California lease required to be in writing?

7.      What does Megan’s Law require lease agreements include?

8.      List three covenants that are common in a lease.

9.      Define a gross lease.

10.  With what type of lease does the tenant agree to pay all the taxes, insurance, maintenance, and repairs?

11.  Describe how rent is calculated on a percentage lease.

12.  How do residential leases differ from commercial and other types of leases?

13.  Define a security deposit.

14.  What is the maximum allowed security deposit in California?

15.  Within what timeframe must a landlord refund the security deposit on a residential lease?

16.  What are the main differences between subleasing and assignment?

17.  List the obligations a landlord has in a lease agreement.

18.  What type of notice must a landlord give to enter a rental property?

19.  Explain the quiet enjoyment right a tenant has when renting a property.

20.  List three obligations a tenant has when renting a property.

21.  List three examples of what a landlord must do to ensure the implied warranty of habitability.

22.  What is the monetary limit on what a tenant can deduct from the rent for a repair the tenant made?

23.  How long is a “reasonable time” between when a tenant provides notice to a landlord and when a tenant actually makes repairs?

24.  What can happen if a landlord retaliates against a tenant who filed a complaint regarding unacceptable living conditions?

25.  List three causes of lease termination.

26.  What are the most common causes of tenant default?

27.  What is the most common form of landlord default?

28.  What is an unlawful detainer action requesting?

29. What is rent control and how does it affect a city?

30. What two types of rent control ordinances does California have?

31. List three topics California Mobile home Residency Law outlined in Civil Codes 798-798.88 addresses.

32. If the use of a mobile home park changes and management decides to evict tenants, how much notice is management required to provide?

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1 of 25 What is the continuing education requirement to renew a real estate license in California?

A.    12 hours every 2 years

B.     15 hours every year

C.      45 hours every 4 years

D.    60 hours every 4 years

2 of 25 What is a tax on the retail sale of tangible personal property in California called?

A.    The California Public Use Tax

B.     An assessment

C.      The California Sales and Use Tax

D.    Real Property Tax

3 of 25 Who enforces the collection of sales and use taxes in California?

A.    The California Board of Realtors

B.      The California State Board of Equalization

C.     The California Bureau of Real Estate

D.    The California Real Estate Commission

4 of 25 What is the main purpose of the DRE?

A.    To collect license and exam fees

B.      To protect the public

C.     To protect licensees

D.    To protect brokers

5 of 25 What describes the right of the state to enact and enforce laws for the order, safety, health, morals, and general welfare of the public?

A.    Law of the land

B.     Eminent domain

C.      Police power

D.    Right of rescission

6 of 25 The rules of the Bulk Sales Act apply when a business is sold that involves

A.    creditors.

B.     appurtenances.

C.     assets.

D.     inventory.

7 of 25 A candidate for an original real estate salesperson license must qualify for and pass a written examination with a score of

A.    60% or greater.

B.     65% or greater.

C.      70% or greater.

D.    50% or greater.

8 of 25 A broker who receives a buyer’s money deposit, that is not in the form of a check, must deposit it in the appropriate account within how many days following receipt of the funds?

A.    10 business days

B.     3 business days

C.     7 business days

D.    5 business days

9 of 25 The maximum liability of the Recovery Account in any one transaction is how much?

A.    $40,000.00

B.     $10,000.00

C.     $15,000.00

D.     $50,000.00

10 of 25 How old must a candidate be in order to obtain a real estate license?

A.    21

B.      18

C.     16

D.    23

11 of 25 California law has held that a post-dated check may be considered the equivalent of a

A.    certificate of deposit.

B.     cash deposit.

C.      promissory note.

D.    cashier’s check.

12 of 25 What do we call the practice of mixing a client’s money with the agent’s personal funds?

A.    Conversion

B.     Disengagement

C.     Dispersement

D.     Commingling

13 of 25 What gives a person the chance to channel his or her private savings into real estate investments for which other financing cannot be obtained or is not available because of the large amount of money involved?

A.    A Money Market Account

B.     Private investment

C.     Economic reinvestment

D.     Real estate syndication

14 of 25 What describes money or other things of value that are received by the broker on the part of another person?

A.    Endowment

B.     Investment capital

C.     Escrow

D.     Trust funds

15 of 25 If an unlicensed person does act as a real estate salesperson or broker, he or she will be

A.    guilty of fraud.

B.      penalized under the law.

C.     required to compensate the injured party.

D.    fined $1,000.

16 of 25 What is an account established as a last resort for a consumer who has obtained a final civil judgment or criminal restitution order against a real estate licensee based on fraud or certain other grounds?

A.    The Real Estate Education Fund

B.     The Real Estate Research Fund

C.      The Recovery Fund

D.    The Real Estate Restitution Fund

17 of 25 A licensee who is 70 years old or older is exempt from the continuing education requirements if that person has been a licensee in good standing in California for at least

A.    25 years.

B.      30 years.

C.     15 years.

D.    20 years.

18 of 25 What is an account that holds all the money collected from license and exam fees and is used for the operating expense of the CalDRE?

A.     The Real Estate General Fund

B.     The Real Estate License Fund

C.     The Real Estate Escrow Fund

D.    The Real Estate Exam Fund

19 of 25 Within how long of an alleged violation does a person have to file a complaint with the Commissioner regarding the actions of a real estate licensee in California?

A.    1 year

B.      3 years

C.     6 months

D.    18 months

20 of 25 If the Commissioner revokes a license, the person affected may not apply for reinstatement of the license until

A.    2 years has passed.

B.     6 months has passed.

C.      1 year has passed.

D.    3 months has passed.

21 of 25 Which one of these parties do not need to be licensed as real estate sales persons or brokers?

A.    A buyer’s agent

B.     A person who solicits real estate listings

C.      A short term vacation rental agent

D.    A seller’s agent

22 of 25 What type of licensing does a person need who is acting on his or her own behalf with respect to his or her own property?

A.    A real estate license

B.     A broker license

C.     An independent contractor license

D.     No license required

23 of 25 All California real estate licenses are issued for a period of

A.    2 years.

B.     6 years.

C.     8 years.

D.     4 years.

24 of 25 What is described as the written instrument that passes the title to the personal property?

A.    A title receipt

B.      A bill of sale

C.     A balance sheet

D.    A transaction record

25 of 25 What does DRE stand for?

A.    California Buyer Representation

B.     California Board of Realtors

C.     California Business Enterprises

D.     California Department of Real Estate

Bonus  Chapter15 questions with NO answers

Answers will be revealed with proper subscription

1.      Explain how the California Department of Real Estate (DRE) protects the public.

2.      How does DRE generate revenue for operating costs?

3.      List three of the California Real Estate Commissioner’s specific duties.

4.      What are the required qualifications to be appointed as Commissioner?

5.      List three parties exempt from real estate licensing requirements in California.

What is California’s policy regarding compensation for an unlicensed person acting in the capacity of a real estate salesperson?

If a broker authorizes an unlicensed person to act in the capacity of a licensed salesperson, including providing compensation for real estate services, who will be disciplined under the law?

What are the penalties for engaging in unlicensed real estate activity?

What is the continuing education requirement for all real estate licensees in California?

What happens if a licensee fails to renew his or her license prior to its expiration?

How would a broker’s license expiring affect the broker’s affiliated licensees?

Describe when a licensee may be issued a restricted license.

What are the Commissioner’s Regulations?

14.  In order for the Commissioner to investigate a complaint, what timeframe must the complaint be filed?

15.  List three situations where the Commissioner may temporarily suspend or permanently revoke a real estate licensee’s license.

What is the Recovery Fund?

What are trust funds?

Within what timeframe is a broker required to deposit a buyer’s money deposit in the appropriate account or provide it to the principal?

Define commingling.

How long must brokers keep all trust account records?

21.  Define business opportunity.

22.  What are the essential elements of a business opportunity sale?

23.  What is real estate syndication?

24.  Describe the two types of Real Estate Investment Trusts (REITs).

California: Real Estate “Legal Aspects” – Sample of Final Course Exam

Answers will be revealed with proper subscription in “ANSWER” pages

Tip: to find a certain word or key term,  press at the same time, the buttons:

( Ctrl and F ) on Windows computers

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to bring up the in-page search box

1 of 100 What accurately locates and identifies boundaries of a subject parcel to a degree acceptable by courts of law in the state where the property is located?

A.    A stake survey

B.     A deed

C.     A legal description

D.    A title search

2 of 100 According to a CAR Residential Purchase Agreement, how long does a buyer have to complete inspections and approve all material provided by the seller in relation to the property, if not specified?

A.    3

B.     21

C.     10

D.    17

3 of 100 The Uniform Commercial Code does all of the following EXCEPT:

A.    allow the expansion of commercial practices.

B.     modernize the law governing commercial transaction.

C.     clarify the law governing commercials transaction.

D.    create local ordinances.

4 of 100 When a seller lists his or her home with a licensee and the property does not go under contract or if the client does not agree to extend the time of the listing, then the listing will:

A.    terminate.

B.     cancel.

C.     expire.

D.    not sell.

5 of 100 What is an additional clause in a sales contract where the seller warrants that there are no undisclosed building codes or zoning violations?

A.    Owner’s association disclosure

B.     Inspections

C.     Survey

D.    Compliance with laws

6 of 100 Which part of a Loan Disclosure states what late fee the lender will charge?

A.    Partial payments

B.     Security interest

C.     Negative amortization

D.    Late payment

7 of 100 The law enforces promises through the use of

A.    laws.

B.     regulations.

C.     contracts.

D.    policies.

8 of 100 What advertising phrase would be considered discriminatory based on handicap?

A.    Fourth-floor walk up

B.     Jogging Trails

C.     Walk-in closets

D.    Able bodied persons only

9 of 100 Which section in a CAR Residential Purchase Agreement shows who will pay the county transfer fees, private transfer fee, city transfer fee, and home warranty?

A.    Items included in sale

B.     Escrow

C.     Note to Buyer and Seller

D.    Other Costs

10 of 100 The collection of Roman law contributed the model for which type of law?

A.    Civil law

B.     Criminal law

C.     Case law

D.    Common law

11 of 100 It is important for a licensee or a broker to remove ambiguity when a seller’s unclear decision could be discriminatory by forcing the seller to

A.    cooperate with the buyer.

B.     renegotiate the contract.

C.     pay the closing costs.

D.    articulate his or her concern.

12 of 100 What lease provision would outline the condition of the property at the time a lease is executed?

A.    Maintenance and repair

B.     Rules and Regulations

C.     Landlord Entry

D.    Condition of the Property

13 of 100 What Act requires that lenders keep all credit information confidential?

A.    The Fair Lending Act

B.     The Unruh Civil Rights Act

C.     The Home Mortgage Disclosure Act

D.    The Fair Credit Reporting Act

14 of 100 In contract law, what term means someone has broken his or her word?

A.    Infringement

B.     Violation

C.     Infraction

D.    Breach

15 of 100 What term describes a person, company , or entity that assigns its right to another?

A.    Assignee

B.     Delegor

C.     Assignor

D.    Delegee

16 of 100 What informs buyers and prospective tenants of registered sex offender database that can be searched to identify if any sex offenders are near property?

A.    Identifying a Registered Sex Offender Pamphlet

B.     Notice Regarding Database of Location if Registered Sex Offenders

C.     A Sex Offender Disclosure Form

D.    A Property Disclosure Statement

17 of 100 In creating a joint tenancy, there are four unities. Which of the following is NOT one of the four?

A.    Unity of Time

B.     Unity of Possession

C.     Unity of Interest

D.    Unity of Origination

18 of 100 Effective October 2015, the two forms that are the primary closing information documents for most real estate transactions are the Loan Estimate and

A.    Payment Schedule.

B.     Closing Disclosure.

C.     Buying Disclosure.

D.    Mortgage Statement.

19 of 100 Which section, in a CAR Counteroffer, states that a binding agreement is created when a copy of a signed acceptance is personally received by the maker of the counteroffer or the person’s authorized agent?

A.    Offer

B.     Acceptance

C.     Expiration

D.    Terms

20 of 100 What describes when a buyer files a claim in situations where the seller has not delivered the title after all other terms of the contract have been satisfied?

A.    An equitable lien

B.     A statutory lien

C.     A vendor’s lien

D.    A vendee’s lien

21 of 100 What is known as water beneath the surface that runs in recognizable underground streams or collects in porous ground layers called aquifers?

A.    Common water

B.     Surface water

C.     Ground water

D.    Water table

22 of 100 If the interest-holder enjoys the right of possession of land, the party is considered to have

A.    eminent domain.

B.     a leasehold estate.

C.     an encumbrance.

D.    an estate in land.

23 of 100 Who is generally responsible for ensuring that the Closure Disclosure is delivered to the buyer no later than three business days before consummation?

A.    The broker

B.     The creditor

C.     The licensee

D.    The title company

24 of 100 What type of variance permits an application to vary one or more of the dimensional or physical requirements of the acceptable zoning law, code or ordinance in connection with some proposed construction?

A.    A zoning variance

B.     A use variance

C.     A code variance

D.    An area variance

25 of 100 What type of an estate is one that continues for a definite fixed period of the time?

A.    Estate from period to period

B.     Estate for years

C.     Estate at will

D.    Estate at sufferance

26 of 100 What do California homeowners receive to protect equity when a court forces the sale of the house to pay for a judgement?

A.    Sole proprietorship

B.     A general exemption

C.     An automatic homestead exemption

D.    A callable loan

27 of 100 If a deed is to be recorded, California requires that it be recorded in the office of the county clerk

A.    in the county where the buyer resides.

B.     in the county of choice determined by the clerk.

C.     at the greed upon location.

D.    in the county in which the property is located.

28 of 100 In a CAR Residential Purchase Agreement, who is responsible for repairing and damages that occur as a result of inspections?

A.    The seller

B.     The broker

C.     The buyer

D.    The inspector

29 of 100 If a person dies with no heirs and no one qualified to receive e property, what power will state use to claim the property?

A.    Escheat

B.     Eminent domain

C.     Sovereignty

D.    Incentive

30 of 100 Which fiduciary duty requires an agent to place the client’s interests above those of all others, including his or her own?

A.    Honesty

B.     Loyalty

C.     Accountability

D.    Disclosure

31 of 100 What term describes the borrower in a mortgage?

A.    A creditor

B.     A mortgagee

C.     A mortgage lender

D.    A mortgagor

32 of 100 What term describes a legal procedure of removing a tenant from a property because there is a breach of the lease or rental agreement?

A.    Notice

B.     Foreclosure

C.     Eviction

D.    Displacement

33 of 100 What describes conditions that must be met in order for a contract to be enforceable?

A.    Terms

B.     Limitations

C.     Contingencies

D.    Restrictions

34 of 100 What Act requires financial institution to maintain and disclose data about home purchases, home purchase pre-approvals, home improvement and refinance applications involving 1 to 4 unit multifamily dwellings?

A.    The Banking Disclosure Act

B.     The Home Mortgage Disclosure Act

C.     The Consumer Protection Act

D.    The Equal Credit Opportunity Act

35 of 100 How many years must a candidate serve as a real estate broker, actively engaged in the real estate business in order to be appointed as Commissioner?

A.    4

B.     1

C.     3

D.    5

36 of 100 What term describes the sudden decrease of land by flowing water or waves  often caused by hurricanes and other storms?

A.    Erosion

B.     Accretion

C.     Reliction

D.    Avulsion

37 of 100 When a person first meets a person, that person is called a

A.    principal

B.     customer

C.     client

D.    buyer

38 of 100 What are unsecured claims that take the place alongside the borrower’s other depts?

A.    Limitation judgements

B.     Deficiency judgements

C.     Sale proceeds

D.    A writ of execution

39 of 100 What provides legal, public, and constructive knowledge to everyone about the ownership of a property?

A.    A contract

B.     The act of recording

C.     Title

D.    Judgement

40 of 100 The discovery step of civil cases is where

A.    the parties use a mediator

B.     the complaint is filed.

C.     each party presents their case.

D.    each party gathers information from each other and third parties.

41 of 100 If a broker is also an escrow agent in a transaction, he or she must put aside any agency relationships with the parties involved and become a

A.    subordinate agent.

B.     transaction broker.

C.     neutral depository.

D.    dual agent.

42 of 100 What is a legal instrument for the volunteer transfer of real and personal property after the owner’s death?

A.    A trust

B.     A will

C.     A deed

D.    A title

43 of 100 All of the following Bill of Rights protection are related to property rights EXCEPT

A.    equal protection.

B.     unreasonable search and seizure.

C.     just compensation.

D.    freedom of speech.

44 of 100 What type of residential survey, also called a drive-by survey, is designed to show the location of the house and other large structures on the property?

A.    A house location survey

B.     A cadastral land survey

C.     A site survey

D.    A boundary survey

45 of 100 All of the following lien types are exempt from the homestead law EXCEPT

A.    refinancing a lien against the homestead.

B.     manufactured home refinancing.

C.     credit card.

D.    purchasing money on the homestead.

46 of 100 When a salesperson says or does something that creates agency such as giving advice to a customer, giving an opinion to a customer, or negotiating on a customer’s behalf the license has

A.    created agency

B.     universal agency

C.     express agency

D.    implied agency

47 of 100 What are all parties required to use, to fulfill contingency requirements, under California law?

A.    An attorney

B.     Consideration

C.     Due diligence

D.    A transaction broker

48 of 100 California requires that deaths that occurred within the past three years be disclosed unless an occupant of the property dies with, or as a result of,

A.    cancer.

B.     leukemia.

C.     environmental factors.

D.    AIDS

49 of 100 Within how many days of providing labor, materials, or services must preliminary notice be given when filing a mechanic’s lien?

A.    30

B.     45

C.     20

D.    25

50 of 100 If a person believes he or she has been discriminated against, within what period of time of the alleged act must a compliant be filed with HUD?

A.    60 days

B.     2 years

C.     1 year

D.    6 months

51 of 100 Joe has a lease that specifies rent and other requirements, but it does not have an expiration date or renewal cycle. What kind of leasehold estate is it?

A.    Estate at Sufferance

B.     Estate at Will

C.     Estate for Period-to-Period

D.    Estate for Years

52 of 100 The U.S. Constitution gives Congress implied power, which is the ability to

A.    alter the Constitution.

B.     levy taxes.

C.     make any laws that they deem necessary.

D.    make laws that are neither prohibited by nor violate the Constitution.

53 of 100 What term describes a temporary suspension of the development of a property?

A.    Marquee

B.     Moratorium

C.     Dedication

D.    Prezoning

54 of 100 The standard measure of loss of bargain damages, for a total breach, would encompass the difference between the agreed contract price and the market value of the property on the date of

A.    contract

B.     title

C.     acceptance

D.    breach

55 of 100 What type of deed is tailored to the requirements of specific parties, properties, and purposes?

A.    A grant deed

B.     A general deed

C.     A special purpose deed

D.    A full covenant and warranty deed

56 of 100 Civil law is different from criminal law in all of the following area EXCEPT

A.    concerns.

B.     rights.

C.     parties filing.

D.    goals.

57 of 100 When a spouse dies, how does community property get divided?

A.    All of the property goes to the heirs.

B.     Half of the property goes to the surviving spouse and half to deceased’s heirs.

C.     All of the property goes to the surviving spouse

D.    The game goes to the surviving spouse and all other property goes to the deceased heirs.

58 of 100 What type of contract contains vague terms that can be interrupted and understood in more than one way?

A.    A contingent contract

B.     An ambiguous contract

C.     An indefinite contract

D.    An explicit contract

59 of 100 What is a legally enforceable contract where an agent or owner of a property gives the exclusive right of possession for a specific amount of time in exchange for money?

A.    A purchase agreement

B.     An option to buy contract

C.     A lease agreement

D.    An assumption agreement

60 of 100 What is Real Estate Investment Trust (REIT)?

A.    A syndicate of working real estate professionals

B.     A syndicate of people looking for their first home

C.     An unincorporated trust that holds a large number of real estate investments

D.    A syndicate of few investors with large sums of investments capital

61 of 100 What clause describes the type of estate being conveyed and reaffirms the extent of ownership that the grantor is transferring?

A.    A caveat emptor clause

B.     An ownership clause

C.     A habendum clause

D.    A contingency clause

62 of 100 What have lenders established to protect borrowers from unlimited increases in the interest rate?

A.    Mortgage caps

B.     Rate caps

C.     Payment caps

D.    Amortization caps

63 of 100 A licensee can provide actual factual knowledge to a customer but does not provide

A.    property improvements.

B.     square footage.

C.     sale’s price.

D.    advice.

64 of 100 Which of the following in NOT a specified federal court?

A.    U.S. Claims Court

B.     U.S. Supreme Court

C.     U.S. Tax Court

D.    U.S. Bankruptcy Court

65 of 100 What type of property is abstract, having no physical existence in itself, other than as evidence of one’s ownership interest?

A.    Representational property

B.     Tangible property

C.     Real Estate

D.    Intangible property

66 of 100 Who can file a discriminatory complaint?

A.    A buyer

B.     A seller

C.     Anyone

D.    A broker

67 of 100 What can a plaintiff file essentially telling potential buyers that the property is subject to a judgement of a pending lawsuit by putting a cloud on the title?

A.    A writ of attachment

B.     A chain of title

C.     A lis pendens

D.    A writ of execution

68 of 100 Any last minute changes to a contract that are done by hand should be initialed by

A.    the seller

B.     the buyer

C.     all parties to the contract

D.    the broker

69 of 100 Who is charged with the responsibility of making sure that the owners do not use their property in a way that will harm the public?

A.    The Real Estate Commission

B.     The HOA

C.     The government

D.    The zoning committee

70 of 100 What rules should you follow to decrease the possibility of lawsuits?

A.    Property inspection rules

B.     Office policy rules

C.     Licensing rules

D.    Agency Disclosure Rules

71 of 100 In partnership, a general partner

A.    has limited liability.

B.     shares equal liability with other partners.

C.     has no liability.

D.    has unlimited personal liability.

72 of 100 The purpose of restrictive covenents is to preserve and protect the quality of land in subdivisions and maximize

A.    incentive zoning.

B.     land improvements.

C.     land values.

D.    recreational use.

73 of 100 What is something an escrow agent should never do?

A.    Receive money from lenders.

B.     Offer legal advice.

C.     Obtain title insurance.

D.    Prepare closing documents.

74 of 100 Arbitration is an out of court settlement procedure where

A.    the third party has the power to make a binding decision.

B.     the third party attempts to make a compromise.

C.     the third party conducts a discovery.

D.    the third party consults with a judge.

75 of 100 What describes when some expense paid at closing are divided proportionally between the buyer and the seller?

A.    Assign

B.     Disseminate

C.     Withhold

D.    Prorated

76 of 100 What type of mortgage is one that includes all the personal property and appliances that are installed on the property?

A.    A purchase money mortgage

B.     A blanket mortgage

C.     A graduated mortgage

D.    A package mortgage

77 of 100 A buyer Representation Agreement is bilateral because it defines the obligations and responsibilities of

A.    the broker.

B.     both parties.

C.     the buyer.

D.    the licensee.

78 of 100 In what type of listing does an owner set a minimum amount that he or she wants to receive from the sale of the property and let the broker have a commission any amount above set minimum?

A.    An exclusive agency listing

B.     A net listing

C.     A one-time show listing

D.    An open listing

79 of 100 Which part of a Closing Disclosure details the total amount of all the payment on the loan, the dollar amount of the finance charges over the life of the loan, the amount financed, the APR and the TIP?

A.    Contact information

B.     Confirm receipt

C.     Loan calculations.

D.    Other disclosures.

80 of 100 The agency relationship between the buyer, seller and broker(s) must be confirmed in writing in either the C.A.R. Standard Form AC-6 or

A.    the inspection notice.

B.     the real estate listing.

C.     the transaction form.

D.    the purchase contract.

81 of 100 If a seller declines to show a property to a minority he or she can be sued for violating

A.    HUD.

B.     fair housing laws.

C.     the Equal Opportunity Act.

D.    RESPA.

82 of 100 Who sets the amount of rate of real estate commissions?

A.    The real estate board

B.     The escrow agent

C.     The lender

D.    The broker

83 of 100 Federal law requires that information, regarding lead-based paint, be given to a buyer or tenant on home built prior to

A.    1980

B.     1984

C.     1978

D.    1990

84 of 100 What system, also called the recorded plat method, is used to describe properties in residential, commercial, and industrial subdivisions?

A.    The rectangular survey system

B.     Metes and bounds

C.     The lot and block system

D.    The Public Land Survey System

85 of 100 What term, in the California Civil Code addressing mobile home residency, describes the right of a homeowner to use the site within a mobile home park?

A.    Leasehold

B.     Specific Use

C.     Tenancy

D.    Propriety

86 of 100 How much of a property exemption is a totally disabled war veteran, making over $40,000 annually and living  in California , entitled to?

A.    $50,000

B.     $100,000

C.     $40,000

D.    $75,000

87 of 100 In a real estate transaction, who is the decision maker on all things?

A.    The broker

B.     The buyer

C.     The client

D.    The seller

88 of 100 What is not one of the 4 choices a buyer can make when a counteroffer is given back to him or her?

A.    The counteroffer could be accepted.

B.     Another counteroffer can be made.

C.     The counteroffer can be rejected.

D.    The counteroffer could become a lease.

89 of 100 California courts have held that if a lease is written, then it must be signed by the

A.    leaseholder.

B.     lessee.

C.     tenant.

D.    lessor.

90 of 100 What is pur autre vie life estate?

A.    It endures over the lifetime of the owner, then passes to an heir.

B.     It ends with the death of the life estate owner and may pass back to the original owners or their heirs or to a named third party.

C.     It ends with the death of the original grantor, then passes to a third party.

D.    It endures over a lifetime of a third person, after which the property passes from the tenant holder to the original grantor.

91 of 100 What is a second step in a civil case in district court?

A.    Pleadings

B.     Discovery

C.     Post trial

D.    Pre trial

92 of 100 What is a type of company that sells securities specializing in real estate ventures, and requires a minimum of 100 investors?

A.    A real estate corporation

B.     A limited liability corporation

C.     A real estate investment trust

D.    A partnership

93 of 100 Where must a declaration of homestead be filed?

A.    The district assessor’s office

B.     A title company

C.     The Office of Housing and Urban Development

D.    The county recorder’s office

94 of 100 What term describes the unlawful misappropriation and use of a client’s funds by a licensee?

A.    Continuance

B.     Conversion

C.     Commingling

D.    Laundering

95 of 100 What describes minerals that are deemed real property, such as gold and silver, until they are removed from the earth and become personal property?

A.    Mineral rights

B.     Nutrients

C.     Synthetics

D.    Solid minerals

96 of 100 Which provision in a CAR Residential Listing Agreement states that the property is offered in compliance with federal, state, and local anti-discrimination laws?

A.    Management approval

B.     Ownership

C.     Equal Housing Opportunity

D.    Acknowledgement

97 of 100 Which section of a CAR Residential Purchase Agreement is a provision divided into 3 sections: mediation, arbitration of disputes, and additional terms?

A.    Representative Capacity

B.     Remedies for Buyer’s Breach of Contract

C.     Dispute Resolution

D.    Scope of Duty

98 of 100 The salesperson should always think the first offer the buyer makes should be his or her

A.    worst offer

B.     only offer

C.     best offer

D.    final offer

99 of 100 What describes plants or crops that are considered personal property since human intervention is necessary for planting and harvesting?

A.    Appurtenances

B.     Conservation

C.     Fodder

D.    Emblements

100 of 100 What type of zoning is density determined for an entire area, rather than on a lot by lot basis?

A.    Down Zoning

B.     Incentive Zoning

C.     Cluster zoning

D.    Exclusionary zoning

–00cceshoppFinance00—

1) Which of the following is a description of leveraging?
2) When a lender has a lien on a property via a mortgage, what rights does the lender hold?
3) What is the impact to lenders when mortgage packages are sold?
4) Which of the following is an event that has a direct impact on property?
5) What’s the term for an extended period of time during which banks experience more withdrawals than deposits?
6) During which phase of the real estate cycle does a real estate professional have the most direct impact?
7) River City Bank needs to cut back on lending. For several months, the bank has seen more withdrawals from customers than deposits. This has led to a decrease in deposits typically used for lending. What term can be used to describe what the bank has experienced?
8) Which of the following statements is true about national lending intuitions?
9) When obtaining a mortgage to purchase a home, for what does the borrower use the property?
10) What do loans create for banks and other financiers?
11) What is the general economic impact of mortgage loan payments?
12) In the secondary market, how are mortgages grouped together and sold?
13) The construction of what type of structures is one of the largest indicators on the country’s economy?
14) Which professionals are most utilized by the buyer prior to closing?
15) Which of the following is the best example of the economic principle of leveraging, as it applies to a real estate transaction?
16) Larry obtained a mortgage from State Bank. Larry owns the property, controls it, and has all the rights that come along with real property ownership. State Bank has an interest in the property and one other right. What is that?
17) Which of the following statements best describes disintermediation?
18) Which of the following best describes collateral?
19) Edward is an economic analyst. In his work, he keeps a particularly close eye on this industry, because action or inaction here is a leading indicator of the country’s overall economy. Which industry is this?
20) As interest rates rise, what is the number of buyers in the market likely to do?
21) In a mortgage, the property is used as collateral for the loan. What’s the term for the process of pledging something as collateral?
22) How does the consumer provide economic support to a community in the living phase of the real estate cycle?
23) What would likely happen to the real estate market if there were no lenders?
24) When consumers make a small down payment, borrow the remaining amount of the purchase price from a lender, and reap the rewards off of the full investment value, they are demonstrating what concept?
25) One of the following entities is primarily a secondary market player. Which one?
26) Iris is planning to purchase her first home. Based on what you know about the nature of real estate finance in our country, which approach is she most likely to use?
27) Tonia is buying a new home. She has a down payment of $30,000 and will obtain a $250,000 mortgage from a local bank to make up the remainder of the purchase price. What is this an example of?
28) Which of the following entities commonly acts in the primary market?
29) Which of the following entities support lenders in having adequate cash flow available?
30) How do mortgage lenders acquire income?
31) During which phase of the real estate cycle is local government most directly involved?
32) Real estate professionals keep a multitude of other professionals busy during the buying and selling process. Which of these professionals or entities are most active during the construction phase of real estate?
33) What effect do low interest rates have on borrowing?
34) Which of the following entities generally acts in the secondary market?
35) Suppose you live and work in the north-central U.S. Which of the following factors would have a direct impact on property at the local level?
36) As interest rates fall, what is the number of buyers in the market likely to do?
37) During which phase of the real estate cycle do residents engage with local amenities and services?
38) Which of the following items directly increases the supply of real estate properties on the market?
39) In which phase of the real estate market would you expect to see unemployment and foreclosures remain high but begin to stabilize?
40) The supply of properties available in the market is greater than the number of buyers. What type of market does this describe?
41) In which phase of the real estate market would you expect to see an increase in hiring and employment, increased public confidence, and an increase in buyers in the market?
42) Which of the following best describes a seller’s market?
43) Stabilizing unemployment and foreclosures may signal that we’re in which phase of the real estate market cycle?
44) Which of the following best describes the state of the market during the expansion phase of the real estate cycle?
45) Which generation are children of the Silent Generation and products of the U.S. population explosion after World War II?
46) In what phase of the real estate cycle do foreclosures increase and home prices fall?
47) Robert and Jill purchased a single-family home in the suburbs for $50,000 nearly 40 years ago. Considering historical property value fluctuations, what is the likely value of the property today?
48) Althea is starting her own candle business. Her plan is to rent a space to sell her products for several years, with the hope of expanding. In this scenario, which item represents supply?
49) Which act made some mortgage insurance premium deductions available to certain taxpayers?
50) What step of the real estate cycle generally follows a recession?
51) In which phase of the real estate market would you expect to see unemployment increasing, prices falling, and foreclosures on the rise?
52) Which one of the following best describes the state of the market during the recession phase of the real estate cycle?
53) Which act exempted homeowners from paying taxes on capital gains up to a specified value?
54) Undervalued properties and a surplus of inventory are most likely to occur in what phase of the real estate market cycle?
55) Which one of the following best describes the state of the market during the recovery phase of the real estate cycle?
56) David purchased a house three years ago for $300,000. Considering historical property value fluctuations, what is the likely value of the property today?
57) Which act temporarily removed the requirement that taxpayers whose homes were sold as a result of a foreclosure had to include the loan write-off amount as taxable income?
58) In which phase of the real estate market would you expect to see properties selling for more than they’re worth, many buyers in the market, and lots of new construction?
59) Which of the following items directly influences real estate supply?
60) Which generation financed their homes due to also having other debt obligations?
61) Which of the following best describes a buyer’s market?
62) An increase in foreclosures and a drop in home prices is most likely to occur in what phase of the real estate cycle?
63) In which phase of the real estate market cycle would you expect to see properties sit vacant and prices drop?
64) Which of the following items directly influences real estate demand?
65) John is looking for a home to purchase. If he represents demand, which of the following represents the supply that best fits his needs?
66) Historically, what do property values tend to do over short periods of time?
67) There are fewer properties available in the market than there are interested buyers. What type of market does this describe?
68) A multibillion dollar online retail distributor has decided to set up operations in Ashland. The population of Ashland is 22,000. What is the potential impact to the area?
69) Properties selling for more than they’re worth and a flurry of new construction activity is most likely to occur in which real estate market phase?
70) In which phase of the real estate market cycle would you expect to see property undervalued and a large supply of homes on the market?
71) Historically, what do property values tend to do over long periods of time?
72) Which of the following is a possible result of a community growing too fast?
73) Which act, which was the first act passed to address the subprime mortgage crisis and was also known as “the stimulus package,” sought to create new jobs and save existing ones, spur economic activity and invest in long-term growth, and foster new accountability and transparency in government spending?
74) Which of the following is a true statement about the Hardest Hit Fund?
75) Which of the following sources can provide real estate professionals with important market data?
76) Which of the following is designed to make consumer financial products and services fair and transparent?
77) As foreclosures increased in 2007, what was the response from lenders?
78) Which of the following was created as part of the Homeowner Affordability and Stability Plan?
79) Which governmental legislation established the Consumer Financial Protection Bureau?
80) Which of the following resources are extremely helpful when working with investors?
81) What term is used to describe the housing inventory in default or foreclosure?
82) In response to the increase in foreclosures and losses on their balance sheets, not to mention a reduced market for subprime loans, many lenders slowed their lending activities. What was the impact of this on the overall economy?
83) 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?
84) Which of the following programs broke the normal 80/20 ratio rule usually required as a loan-to-value and offered favorable interest rates?
85) In the early 2000s, before the 2007 financial crisis, how would you characterize the real estate market?
86) What term is used to describe loans that were approved for borrowers with lower incomes and poor credit histories?
87) Store of value, unit of account, and what other factor define money?
88) Store of value, medium of exchange, and what other factor define money?
89) Unit of account, medium of exchange, and what other factor define money?
90) The ease with which an asset is converted to cash is called ______.
91) Which agency is responsible for the production of coins?
92) What agency receives paper currency prior to its distribution but after it’s printed?
93) Which of the following is classified as the least liquid on the scale?
94) Which agency is responsible for the production of paper currency?
95) Roger has a sufficient income, has never missed a loan or credit payment, and has an adequate credit history. His credit score makes him a very creditworthy consumer. When obtaining a loan, which rate will he most likely get?
96) What is the most likely effect when the Fed buys securities on the open market?
97) The amount of money a member bank must keep on deposit at its reserve district bank describes ______.
98) The three-business-day period following the latter of either the date that the transaction is consummated or the date the disclosure is made, during which a borrower can cancel their loan, is called the ______.
99) A standardized measure for interest rates and other costs of the loan is called _______.
100) Which of the following actions did the Federal Reserve take in response to the 2007 financial crisis?
101) Which of the following best describes annual percentage rate (APR)?
102) Which statement most accurately describes the right of rescission?
103) What does it mean if the Fed decreases reserve requirements?
104) The buying and selling of government securities as a way to influence the money supply and balance economic growth describes ______.
105) Which interest rate do banks use to offer consumer loans?
106) Which of the following describes the discount rate?
107) Which was NOT part of the Fed’s program quantitative easing?
108) The rate at which a bank can obtain an overnight loan from another bank without providing collateral is called the ______ rate.
109) Which of the following describes the federal funds rate?
110) What is a potential cause for a decrease in local economy driven by the Fed?
111) What is the most likely effect when the Fed sells securities on the open market?
112) The rate at which a bank can obtain a loan from its Federal Reserve bank when using commercial paper as collateral is called the ______ rate.
113) What is the purpose of the Federal Reserve System?
114) Community Banks is being sued for intentionally violating the Truth In Lending Act. What fines and imprisonment possibilities can the company face?
115) Wendy has been approved for her first mortgage. The lender advertised a 4.6% interest rate. She’s nervous about the terms and fees. What information is the lender required to provide?
116) Which of the following statements is true about the Federal Reserve?
117) Which government entity oversees open-market operations?
118) What does it mean if the Fed increases reserve requirements?
119) Which of the following describes the prime rate?
120) Which of the following is a likely effect when the discount window is closed?
121) Which of the following is a true statement about FHLBanks?
122) Which of the following is a likely result if Federal Home Loan Banks did not exist?
123) What program allowed the U.S. Treasury to spend hundreds of billions of dollars to stabilize our financial system, boost credit markets, help families avoid foreclosure, and promote economic growth?
124) In what situation would the U.S. Treasury be most willing to sell securities?
125) What is one of the ways the U.S. Treasury promotes economic growth and stability?
126) A Treasury bill is a Treasury security ______.
127) Which of the following would the FDIC most likely insure?
128) Which of the following would the FDIC most likely insure?
129) Which of the following would the FDIC most likely insure?
130) Which agency regulates FHLBanks?
131) A Treasury bond is a Treasury security ______.
132) A long-term security issued by the Treasury that has a maturity of 30 years is called a Treasury ______.
133) The FDIC was established as a result of what event?
134) What are securities?
135) Long- and short-term debt instruments are called ______.
136) Which of the following has a direct responsibility to pay the nation’s bills?
137) A short-term security issued by the Treasury that has a maturity term of one year or less is called a Treasury ______.
138) An intermediate-term security issued by the Treasury that has a maturity term of between two and 10 years is called a Treasury ______.
139) If the Treasury encounters a deficit, what actions might it take?
140) Which of the following would the FDIC most likely not insure?
141) Which of the following are unlikely to be insured by the FDIC?
142) In addition to lending money to member banks, FHLBanks also do which of the following?
143) Which of the following results from the Treasury selling securities?
144) Which of the following resources will give you reports and statistics including house price index, foreclosures, and refinancing?
145) What did the Troubled Asset Relief Program allow the U.S. Treasury to do in response to the 2007 financial crisis?
146) The two most common methods used when a bank fails are the payout method and the ______ method.
147) Up to what amount will the FDIC insure?
148) The two most common insolvency methods put in place when a bank fails are the purchase and assumption method and the ______ method.
149) A Treasury note is a Treasury security ______.
150) When the Treasury collects fewer funds than what is needed to pay the government’s bills, what action might it take?
151) Which event led to the establishment of the FDIC?
152) Which U.S. entity has a mission to create strong, sustainable, inclusive communities and quality affordable homes for all.
153) When George is working with buyers who can’t afford a large down payment, he recommends that they look into ______.
154) When HUD pursues actions that are designed to end homelessness and promote the health and housing stability of vulnerable populations, which of its goals is it supporting?
155) Which of these HUD programs allows mortgage lenders to obtain a better price for their mortgage loans in the secondary mortgage market?
156) HUD’s strategic plan outlines the ______ that support its mission.
157) Natalie is a licensee who assists buyers in the purchase of HUD ______ when they’re listed for sale.
158) HUD’s second goal in support of its mission is to meet the need for ______ homes.
159) When HUD pursues actions that are designed to reduce housing discrimination and help communities recover from disasters, which of its goals is it supporting?
160) When HUD pursues actions that are designed to restore the financial health of the Federal Housing Administration, which of its goals is it supporting?
161) Which of the following can help your very low-income clients either purchase or rent housing in the private market?
162) One of HUD’s goals reflects a response to financial issues experienced in the housing market during the 2007 economic crisis. The goal is ______ to bolster the economy and protect consumers.
163) The U.S. ______ is the federal agency with the mission to create strong, sustainable, inclusive communities and quality affordable homes for all.
164) Which HUD program is responsible for protecting individuals against discrimination in housing based membership in a protected class?
165) Fred and Wilma are listing their home for sale with Carl, a licensee. They tell Carl that they’re not interested in selling to people who won’t “fit in with the neighborhood.” Carl advises them about ______ that are developed and enforced within HUD.
166) Lee manages a rental property for her client, and is accepting applications for tenants. Applicants Damian and Maria are young, newly married, and have a baby on the way. They can’t afford a typical rent on a clean, well-maintained two-bedroom home such as the one that Lee has available; but they are recipients of the ______, which Lee knows the property would also qualify for. Lee is glad to accept them as tenants.
167) HUD’s ______ has a goal of increasing the availability of safe and affordable housing to Native American families.
168) Glen is assisting a buyer who makes an offer on a condo in a high-end area of town. The seller refuses the offer, and Glen’s client believes this is discriminatory behavior. How should Glen advise his client in this situation?
169) Which HUD program is responsible for developing and enforcing federal fair housing policies and laws?
170) Which of these HUD programs is primarily responsible for providing mortgage insurance on home loans?
171) Licensees who stay current with ______ can better serve low- to moderate-income clients looking to purchase.
172) Jerome is developing an ad for three properties he has listed in an upscale community. He wants to keep it short and simple. Which of these would NOT trigger full disclosure under TILA?
173) What’s the purpose of the Community Reinvestment Act?
174) The Real Estate Settlement Procedures Act protects consumers by _______.
175) Your buyer clients, the Thompsons, told you about a problem they ran into with the lender that handled their mortgage. The Thompsons, who are African American, were given less favorable loan terms than a white couple they know who used the same lender. You know the Thompsons have excellent credit. Which act should you make them aware of?
176) Lawrence is a buyer closing on a home purchase for which he’s obtaining financing. He receives a Loan Estimate from his lender. What’s one purpose of this document?
177) Maxine is purchasing a small craft shop, including the underlying real estate. She applies for a commercial loan from her federally insured bank to complete the purchase. Is Maxine’s transaction covered by the Real Estate Settlement Procedures Act?
178) The ______ was enacted in 1974 as a response to discriminatory practices by lenders. It was created to help ensure that access to consumer credit was not based on protected class status, but on creditworthiness.
179) In a residential real estate sale involving a federally related loan, what entity is required to provide Real Estate Settlement Procedures Act disclosures to the consumer?
180) About 50% of the borrowers in Neighborhood One are Hispanic, while only 4% in Neighborhood Two are Hispanic. The median home price in both neighborhoods is the same. However, statistics show that there is a significantly greater percentage of minority and low-income borrows who were denied financing for loans on properties in Neighborhood Two and were offered lower rates to live in Neighborhood One. What act is intended to prevent this type of potentially discriminatory lending pattern?
181) Tyler is a developer who renovates a long-abandoned warehouse in a low-income neighborhood into a community center, complete with space for after-school programs, a daycare, and a gym. Tyler is able to complete the renovation with a loan funded by a local bank. Which act requires financial institutions to make credit available for this type of development?
182) The Morgans are about to close on their home. They’re meeting with the lender to complete all the necessary paperwork. They’ve requested that none of their demographic information be shared with anyone. Which act would they need to be made aware of?
183) Under RESPA, a rebate of a licensee’s commission may be offered to a transaction party, provided which of the following is true?
184) A bank that addresses a community development need in its assessment area and donates to recovery efforts of a flooded lower-income area might be an example of the bank supporting what act?
185) The ______ was enacted in 1946 in response to the creation of several new federal agencies. It established a process for how the agencies could propose and establish regulations.
186) Regulation Z codifies the rules of the ______.
187) The ______ was enacted in 2010 to create stricter regulation of the financial services industry to reduce costs for consumers from (for instance), undisclosed kickbacks.
188) The intent of the Consumer Credit Protection Act, which includes the Truth in Lending Act, is to safeguard the consumer by ______.
189) What’s the purpose of the Home Mortgage Disclosure Act?
190) The _______ requires lenders to disclose financing terms to consumers in a manner that’s not misleading or deceitful.
191) The Truth in Lending Act requires lenders to make certain ______ to consumers.
192) Gus has applied for a home equity line of credit from his federally insured bank so that he can make some renovations to his kitchen. The same bank is his lender for his home mortgage. Will this loan be subject to Real Estate Settlement Procedures Act requirements?
193) Which of the following is an acceptable ad based on Regulation Z?
194) The ______ requires specific disclosures and was enacted in 1968 as part of the Consumer Credit Protection Act.
195) What’s the purpose of the Equal Credit Opportunity Act?
196) The neighbors in South Mountain Village got tired of all the drug dealing and criminal activity surrounding a shop, the Mystery Market. The community boycotted the store, which eventually closed, and with the help of local financial institutions, a social services center was added to the area. What act is this an example of?
197) Gregory and Dianne are American citizens of Cuban origin, and when their home loan is denied, they suspect discrimination. Which of the following acts prohibits lender discrimination on the basis of the protected class of national origin?
198) Natalie is a single mother of twins and receives government assistance to help make ends meet. She’s been living with her mother for the last few years but really wants to buy her own home to gain some independence. She’s got a little in savings and has good credit, but when a lender turns her away because she receives public assistance she worries that she’ll never be able to get a loan. What act prevents automatic discriminatory practices by lenders and protects individuals like Natalie?
199) When Stacy’s clients ask her if she can recommend a mortgage broker, she promptly gives them the name of the best mortgage broker she knows, Gary Jones. Later, she always receives a check from Gary as payment for the referral. Is this legal or illegal under the Real Estate Settlement Procedures Act?
200) The Housing and Economic Recovery Act and the American Recovery and Reinvestment Act were enacted in response to ______.
201) Bo’s real estate ad states: “Custom homes for sale with scenic mountain views. Easy financing and low down payments.” What else must be included in the ad in order for it to comply with TILA?
202) A “homes for sale” magazine contains the following ad: “One-bedroom condo. Corner unit with beautiful ocean views. Financing available, 5.25% APR.” Which of these statements is true?
203) The ______ was a response to the practice of redlining and was enacted in 1977.
204) Which of the following is part of the Consumer Financial Protection Bureau’s mission of consumer protection?
205) The American Recovery and Reinvestment Act provided mortgage assistance to ______.
206) The American Recovery and Reinvestment Act provided mortgage assistance to ___________.
207) The CFPB promotes consumer protection in the credit market through a number of strategies, including ______.
208) What’s the acronym for the legislation that regulates closing costs and settlement procedures?
209) Because of the Secure and Fair Enforcement for Mortgage Licensing Act, borrowers can determine if mortgage loan originator is ______.
210) What’s the acronym for the legislation that established processes and procedures for how federal agencies propose and enforce regulations?
211) The Mortgage Disclosure Improvement Act amends ______ in terms of the timing of lender disclosures.
212) The CFPB uses education to accomplish its mission, such as the ______ publications.
213) Hugh works as a loan officer at a bank. Because of the ______, he must be registered with the Nationwide Mortgage Licensing System.
214) Which of the following was created as a result of the Housing and Economic Recovery Act?
215) Joyce and Danny purchased a home in 2009 for $280,000. They received a homebuyer credit of $8,000. Their friends Margie and Scott purchased a home in 2010 for $320,000. Margie and Scott didn’t receive a homebuyer credit. Why not?
216) What’s the acronym for the legislation that requires financial institutions to invest in the communities they serve?
217) Because of the Mortgage Disclosure Improvement Act, the only advance fee that a creditor can charge to a consumer before providing required loan disclosures is a(n) ______ fee.
218) A major component of the Housing and Economic Recovery Act was the HOPE for Homeowners program, which aimed to ______ by helping subprime borrowers refinance into more affordable fixed-rate mortgages.
219) Both the Housing and Economic Recovery Act and the American Recovery and Reinvestment Act funded a program called the ______ program, which provided emergency assistance grants to states to purchase and redevelop foreclosed and abandoned homes and residential properties.
220) The ______ uses education, enforcement, and research to promote fairness and transparency for consumer financial services.
221) The ______ Act was legislation aimed primarily at addressing the effects of the subprime mortgage crisis.
222) The Dodd-Frank Act created the CFPB in part to regulate ______, which were among the largest originators of subprime mortgages prior to the financial crisis of 2007‒2008.
223) What’s the acronym for the legislation that requires lenders to make full disclosure of the terms and conditions of credit?
224) Rules and regulations that protect consumers of financial services are now the responsibility of ______, which was created by the Dodd-Frank Act.
225) Zack and April are purchasing a home. They apply to three different lenders and review the Loan Estimates they receive. Each form includes a field identifying the National Mortgage Licensing System ID number for the lender. What is the act that requires this licensing identification to be available to consumers?
226) Dawn and Steve are planning to purchase a home, but are wary of the commitment of a mortgage. However, they have no other way to make home ownership a reality, so they decide to educate themselves on the process for obtaining a mortgage loan. Where would you recommend they go for clear, consumer-oriented education on this topic?
227) What’s the acronym for the legislation that requires financial institutions to document and publicly disclose lending practices?
228) The Mortgage Disclosure Improvement Act gives applicants a three-day ______ to review and approve the Loan Estimate and Closing Disclosure form.
229) What’s the acronym for the legislation that prohibits lenders from denying credit to applicants on the basis of their protected class status?
230) Danny and Wendy recently relocated to California. They are buying a three-bedroom home in an established neighborhood where they look forward to raising a family. Their real estate agent, Brunhilda, thinks that their income, which is on the low side, and the property could make them eligible for ______, which would offer reduced, fixed interest rates on a loan.
231) A mortgage banker licensed under the ______ may make, sell, and service residential mortgage loans.
232) Jan is a real estate licensee with a mortgage loan originator (MLO) endorsement. When she acts as an MLO, what law limits the amount of commission and fees she can earn for negotiating a loan on behalf of her client?
233) Conrad has purchased a home in California and, as a veteran, he’s been able to take advantage of the CalVet home loan program. How does this loan program work?
234) California’s Seller Financing Disclosure Law requires the arranger of credit to provide both the buyer and seller with disclosures. What’s the timing requirement for this disclosure?
235) Licensing by the California Residential Mortgage Lending Act allows a mortgage banker to ______.
236) The purpose of the Seller Financing Disclosure Law is ______.
237) Brittany is a real estate licensee with a mortgage loan originator endorsement. When she acts as an MLO, the California Real Property Loan Law requires her to give her clients a disclosure that ______.
238) Lenny the lender is reviewing mortgage applications. Applicant Catherine has a good credit history, but the property she wants to buy is in an area of town where home prices have been headed down, and neighborhoods are starting to look grim. Lenny denies Catherine’s loan application. What California legislation makes Lenny’s decision illegal?
239) Lucy is a mortgage banker. Her business is regulated by ______.
240) What does the Unruh Civil Rights Act require of real estate licensees?
241) Adam is a real estate licensee. He gets a call from Brad, who tells him that he’s getting married soon, and that he and his partner, Zeke, will need to buy a home that is between their places of work. The area where Adam has active listings is right where Brad and Zeke need to be. Adam doesn’t agree that gay marriage should be legal, so he tells Brad that he doesn’t have time to help but that he can refer Brad and Zeke to another agent. What California legislation makes Adam’s action illegal?
242) Limited buyer income, property location and price, and a home buying education course are all eligibility requirements for ______.
243) Which of the following statements is true about usury laws in California?
244) Which of these names is also known as the California Real Property Loan Law?
245) Disclosures under the ______ are required when the seller is extending credit to the buyer or anyone other than the buyer or seller is paid in any way to arrange financing.
246) 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.
247) Sylvia is a single mother living in a small town surrounded by ranch and farm land. She would like to buy a house there, but her income level and her status as an independent contractor makes it hard for her to qualify for a conventional loan. What government program might provide her with a direct loan to purchase a home?
248) Which of these individuals may benefit from USDA Rural Development program offerings?
249) The Farm Credit System is ______.
250) Which government program assists rural Americans by offering loans, grants, and loan guarantees for housing?
251) ______ creates a secondary market for agricultural loans by buying the loans, pooling them, and selling them as securities.
252) The ______ can offer direct loans to farmers and ranchers. The loans are funded by congressional appropriation.
253) Robert is a rancher. He was told about the USDA Farm Service Agency offerings. What can he use an approved loan for?
254) How does Farmer Mac support agricultural producers?
255) Randall needs some new equipment for his ranching operation, and he needs a loan to purchase the equipment. When he approaches his local bank and applies for a Farm Credit System loan, how is the loan funded?
256) Farm and Country Bank provides credit to the farmers, ranchers, and other rural residents of its community. What government program helps the bank maintain enough capital to fund those loans?
257) Farmer Mac is an entity that ______ for agricultural property loans, rural utility loans, and certain loans guaranteed by the U. S. Department of Agriculture.
258) Which entity provides disclosures and public information about the financial condition of FCS?
259) The Farm Credit System is overseen by the ______, an agency of the federal government.
260) The Farm Credit System funds are acquired from ______.
261) To be eligible for a ______, an applicant must have participated in farm or ranch management for at least three years.
262) Which type of support does the USDA Rural Development Program offer to its target audience of rural residents?
263) Farmer Mac is supervised by which entity?
264) The ______ is a government-sponsored enterprise that works through a cooperative system to provide agricultural and rural loans.
265) _____ are the most likely benefactors of USDA Rural Development program offerings.
266) Direct farm ownership loans from the ______ may be used to buy farmland, construct and repair buildings, and make farm improvements.
267) Why does the federal government have agricultural lending programs?
268) _____ provides disclosures and public information about the financial condition of the Farm Credit System.
269) Which is one of the benefits of the USDA loan program?
270) The loan amount plus the down payment should equal ______.
271) Under the “Projected Payments” section of the Loan Estimate, the consumer can view what is included in the monthly payment. Which of the following may be part of the total payment other than the principal and interest?
272) Kendra is purchasing a home and is ready to find a lender who will give her terms that she can afford. What lender-issued document can she use to compare loans and find the one that will best meet her needs?
273) Page one of the Loan Estimate includes a section called “Costs at Closing.” The amount shown as estimated cash to close is ______.
274) Information about how the lender will handle assumptions and late payments is included on ______ of the Loan Estimate.
275) Kendra has applied for a loan from Acme Savings and Loan, but when she compares the Loan Estimate the loan officer gave her with the one from Best Bank, where she also applied for a loan, she decides she’d rather go with the loan from Best Bank. Which of the following is a true statement about this situation?
276) The section on the Loan Estimate called “Services You Cannot Shop For” includes fees for services ______.
277) What information is included on the Loan Estimate form so that the consumer can confirm the reputation of lending institution and individual?
278) Betty is purchasing a home and has received Loan Estimates from three lenders. As she compares the terms of the loans being offered, where can she find the section that allows her to make comparisons between loans with different interest rates?
279) Kendra has applied for a mortgage from Best Bank. When is Best Bank required to provide Kendra with a Loan Estimate?
280) Which of the following may cause the Loan Estimate to be revised?
281) On the Loan Estimate under “Loan Costs,” the points, application fee, and underwriting fee are considered ______.
282) Lewis is reviewing his Loan Estimate and notices under “Other Costs” that there are items listed that don’t include an amount. What does this mean?
283) Because the buyer traditionally pays for this, page three of the Loan Estimate includes information about a consumer’s right to receive a copy of the ______ from the lender.
284) Buyer Ed is reviewing the Loan Estimate he received from the lender he’s working with. He notices the loan terms include a prepayment penalty. Because he’s a savvy consumer, which of the following does Ed do?
285) Borrowers Ava and Liam are expecting their first child and want to be sure they’re both comfortable with the monthly payments they’ll be responsible for in the new house. Under the “Projected Payments” section of their Loan Estimate, Ava and Liam can review ______.
286) Which of the following is NOT part of the Other Considerations section of the Loan Estimate?
287) Kendra and her real estate agent are preparing to close on the property she’s purchasing on Thursday. Kendra will sign the paperwork with her lender to close on the loan at the same time. When does the lender need to provide Kendra with the Closing Disclosure form?
288) Natalie and Sam are reviewing the Loan Estimate form to ensure the date, their names, the property address, and sales price is listed accurately. Additionally, the information provided about their loan term, purpose, product, type, and rate lock should ______.
289) Under which section of the Loan Estimate will you find any credits provided by the seller?
290) Margot reviewed page three of her Closing Disclosure to see the amounts she’ll pay and receive, and the total cash amount. She located this information under the “Summaries of Transaction” in the “Seller’s Transaction” table, which is completed by ______.
291) Borrower Max is reviewing his Closing Disclosure to check the amount of prepaid mortgage insurance, taxes, and interest. In addition to itemizing what his borrower-paid closing costs are, the prepaid section includes ______ for each item.
292) Which of the following is part of the Other Disclosures section?
293) Buyers Romy and Steven are looking over closing documents and don’t know if the Loan Estimate matches everything on the Closing Disclosure. Usually, amounts shown on the Closing Disclosure that don’t exactly match the figures on the Loan Estimate will be due to _______.
294) Cassie is helping her buyer client, Gus, prepare for closing. What should she encourage him to verify as soon as he receives the form?
295) Zara is reviewing the “Calculating Cash to Close” table on page three of the Closing Disclosure to see what has changed from her Loan Estimate. She found this extremely helpful and easy to understand because the table explicitly lists _______.
296) The final page of the Closing Disclosure provides loan calculations that tell the consumer how much ______.
297) Under the “Summaries of Transaction” section on page three of the Closing Disclosure, amounts listed for the borrower’s transaction are calculated to result in ______.
298) Page four of the Closing Disclosure lists specific disclosures about the loan, such as the penalty for late payments, whether a demand feature applies, whether the loan can be assumed, and ______.
299) Which of the following could be different from the amount on the initial Loan Estimate and can impact the monthly payment?
300) Closing costs are itemized on page two of the Closing Disclosure, and all amounts are ______.
301) Although the Closing Disclosure lists all amounts as accurately as possible, some costs must be estimated. Why?
302) Which section of the closing disclosure contains the seller’s existing mortgage loan payoff amount that must be paid to complete the transaction?
303) Victor is a buyer reviewing the Closing Disclosure he received from his lender. On the last page of the form, he sees a signature line. By signing the form, Victor has ______.
304) The _______ section contains the seller’s existing mortgage loan payoff amount that must be paid to complete the transaction.
305) Maria is a borrower reviewing her Closing Disclosure. She notices that the appraisal fee is listed under “Paid by Others” and has an L listed with the amount. What does this mean?
306) In addition to itemizing all borrower-paid and seller-paid closing costs, page two of the Closing Disclosure also tells the borrower when each amount is paid by listing it under ______.
307) Cassie is helping her buyer client, Gus. As they discuss preparations for closing, she cautions Gus, “Make sure you review the Closing Disclosure as soon as you receive it and ______.”
308) Page four of the Closing Disclosure includes consumer education about ______.
309) Lendright Home Loans asked a trustee to begin foreclosure proceedings as permitted by the power-of-sale clause in the security instrument. This action does not need to involve the courts. What type of foreclosure ntact her lender about this issue?
310) The ______ table discloses the amounts associated with the transaction that the seller will pay and receive, usually resulting in a total cash to seller.
311) Life insurance companies are more concerned with long-term stability of investments than they are ___________.
312) Which project would a life insurance company be most likely to finance?
313) What does NCUA stand for?
314) Which organization manages and charters credit unions?
315) Life insurance companies participate in real estate in the ______ arena.
316) Which type of loan is meant specifically for improvements, such as additions or renovations?
317) What’s the primary source of funds for commercial banks?
318) Mortgage bankers are mostly what type of enterprise?
319) Why are life insurance companies less concerned with liquidity than long term security of an investment?
320) Construction loans are a type of ______ financing.
321) Which of the following is true about mortgage brokers?
322) What impact did the authorization of the Credit Union Membership Access Act have on credit unions?
323) Commercial banks offer interim financing in the form of ______ loans.
324) Vantagestar Ltd. would like to construct a high-end condominium complex. Where will they likely go for financing this project?
325) Joe works for a life insurance company that funds commercial investment projects and often insures these projects by insisting on an equity position. What type of financing does this describe?
326) Which of the following is a form of commercial bank revenue related to mortgage financing?
327) Which banking-related entity shares similarities with the purpose and function of the NCUA?
328) Who or what entity directs the activities of credit unions?
329) How is a mortgage banker paid?
330) Who originates their own loans?
331) Commercial banks fall into which of the following category of lenders?
332) A local company wants to build a new office building. What type of loan will it most likely be seeking from its commercial bank?
333) A new apartment building is going up downtown. The owner secured interim financing for the job. Which of these loan types is interim financing?
334) Who needs to obtain a mortgage loan originator endorsement and register with the Nationwide Mortgage Licensing System and Registry?
335) What does it mean when a life insurance company uses participation financing?
336) Which of these items is a demand deposit?
337) Which of the following types of residential dwellings do life insurance companies purchase from the secondary mortgage market?
338) Life insurance companies sometimes like to insure their investment in commercial projects by insisting on an equity position. This is known as ______ financing.
339) Which person or entity works with many different lenders to find the best loan for the customer?
340) Which of the following describes mutual savings bank loans?
341) Memoryjet, Inc has developed a new technology for high-volume jump drives. In order to manufacture their new devices they will need to gear up a new production line, which will cost about $85 million. What kind of bond instrument could they use to help secure the funds they need for their new line?
342) Mutual savings banks have limitations on their lending activities, as specified in their ______.
343) Kaycie is a new employee at a mutual savings bank. During orientation, she learned that mutual savings banks have limitations that are set by their ______.
344) Which type of bond is used to pay for community improvements?
345) Mutual savings banks were created to serve ______ during the mid-19th century.
346) Which type of real estate investment trust is designed to deal exclusively in equities?
347) Mark and Nancy purchased a municipal bond to help with the funding of a new school gymnasium. In exchange for their investment, what will they receive?
348) Some countries have banks that issue loans for U.S. real estate purchases. What are the main countries that participate?
349) How much of a mutual savings bank’s assets come from savings accounts?
350) Which of the following best describes an equity real estate investment trust?
351) There are three types of international buyers: those who have work visas and are looking for a home to purchase while they’re in the U.S., those who are looking for a vacation home in the U.S., and those who are looking for ______.
352) Which type of real estate investment trust derives its income from the rent or sale of property and interest dividends?
353) In which U.S. market(s) do foreign lenders participate?
354) Which type of real estate investment trust derives a portion of its income from interest dividends?
355) An industrial development bond is a variety of ______ bond.
356) A local town has been growing and needs a new elementary school. What kind of bond instrument will the town use to finance this project?
357) Secured corporate bonds use ______ as collateral.
358) What does REIT stand for?
359) Mutual savings banks prefer to keep their lending activities in their immediate geographic area. Why?
360) After bonds are ______, their value goes up and down with the market.
361) What did a 2021 National Association of REALTORS® study say about foreign investment in U.S. real estate?
362) More than 70% of the assets of mutual savings banks are derived from ______.
363) The three general groups of international buyers that real estate professionals may encounter are those who ______, those who are looking for a vacation home for when they travel to the U.S., and those who are looking for a luxury property as an investment.
364) Which of the following REITs focuses on lending money for mortgages and investing in mortgage-backed securities?
365) Which type of real estate investment trust derives its income from the rent or sale of property and interest dividends?
366) Which of the following are potential private loan resources that may be willing to finance a home?
367) Private loan companies may charge higher interest, larger fees, and could require ______ to secure a loan.
368) Private loan companies may place a ______ on the property for which the loan is being taken.
369) Anna is selling her home and met a nice young couple she really wanted to sell to, but they couldn’t get financing. If Anna agrees to carry part of the loan for the buyers, what does she need to understand?
370) Who should sellers consult before agreeing to carry part of a loan for a buyer?
371) Ken and Sue are purchasing a home but are short on the down payment required by their lender. Sue’s mother offered to give them cash to help with the down payment. How much can Sue’s mother give under current tax laws?
372) Georgette and Elise are buying a home together, and have taken out a loan with a private loan company. They’ll pay a bit more interest, and larger fees, but they feel it’s worth it to have the home they’ve always dreamed of. What else might the private loan company require?
373) Janie and Sam are newly married and are looking for their first home. They’re fortunate that Janie’s mom set aside some money to help with this purchase. Janie’s mom says it’s a loan, though, and they will have to pay her back. What’s wrong with this?
374) Private loan companies may be found in many places. There are ______, regional, and local lenders, and even individual entrepreneurs who loan money.
375) What’s the most common way that a seller can help a buyer come up with the funds to complete a real estate transaction?
376) Which of the following are ways a private loan company insulates themselves from the risk of lending funds to a borrower who has had problems securing them elsewhere?
377) Though not a loan, buyers may be able to enlist the help of ______, who can give them a tax-free gift to help them with their purchase.
378) What do sellers who agree to carry part of a loan for a buyer need to understand?
379) Pat and Danielle are buying their first home. They don’t have quite enough money saved for the down payment and closing costs. Who could give them a tax-free gift to help with the purchase?
380) Under current tax law, what’s the maximum tax-free gift an individual can give to another individual annually?
381) What entities make up the secondary mortgage market?
382) Dorinda is an investor. She recently purchased shares in a tranche that holds mortgages and mortgage-backed securities. In what did she invest?
383) Institutions that purchase loans, package them into mortgage-backed securities, then sell these to investors may commonly be referred to as ______.
384) What is the most common structure for a CMO?
385) Horace recently purchased 1,000 shares of a security that’s made up of hundreds of mortgages. The principal and interest that borrowers of these underlying mortgages pay are eventually passed through to Horace and the other investors. What did Horace purchase?
386) Which of these is a common activity in the secondary mortgage market?
387) How do falling interest rates impact investors in mortgage-backed securities?
388) When borrowers started missing mortgage payments, how did this affect collateralized mortgage obligations?
389) Which of the following actions is completed by the secondary mortgage market?
390) What’s the term for a group of loans packaged together and then sold to investors on the secondary market?
391) What are the types of institutions that issue loans directly to consumers commonly called?
392) The secondary mortgage market buys loans from the primary market. How does this aid the lending market?
393) Which of the following led to the 2007 financial crisis and negatively impacted investors that purchased properties in the early 2000s?
394) Assuming a CMO uses the sequential pay structure, how is interest passed through from borrowers paid to investors?
395) Why did investors purchase CMOs prior to the 2007 financial crisis?
396) Assuming a CMO uses the sequential pay structure, how is principal passed through from borrowers paid to investors?
397) Of the institutions listed, which of these is viewed only as a secondary mortgage market player?
398) What could be a consequence if there were no secondary mortgage market?
399) When interest rates increase, what is the impact on mortgage-backed security investors?
400) Which of the following is a true statement about tranches?
401) Which of the following made mortgages attractive investments in the early 2000s?
402) Several actions take place on the secondary mortgage market. Which of these is a common activity?
403) What role did CMOs play in the financial crisis of 2007?
404) What is a collateralized mortgage obligation?
405) ______ is regulated by the Federal Housing Finance Agency.
406) Which entity regulates government-sponsored enterprises?
407) Which of the following is NOT a benefit government-sponsored enterprises receive?
408) Which entity sets the requirements for qualified mortgages?
409) Government-Sponsored Enterprises (GSEs) were created by the U.S. Congress for what purpose?
410) What’s the definition of a qualified mortgage?
411) Freddie Mac and Fannie Mae have guidelines for conforming loans. Which of these are qualifying guidelines?
412) Which of these are established by the Federal Housing Finance Agency?
413) What entity sets conforming loan limits for mortgages?
414) ______ sets conforming loan limits for mortgages.
415) Fannie Mae, Freddie Mac, and the Federal Home Loan Bank are regulated by the ______.
416) The Federal Housing Finance Agency established percentage targets and ______ for loans made to low- to moderate-income borrowers.
417) Conforming loan limits vary based on two factors: the number of units being purchased with the property and what else?
418) What is a government-sponsored enterprise?
419) Which of these agencies is a government-sponsored enterprise?
420) Which of the following is regulated by the Federal Housing Finance Agency?
421) When establishing guidelines for conforming loans, Fannie Mae and Freddie Mac use loan limits set by which entity?
422) What must a qualified mortgage’s loan term limit be?
423) Conforming loan limits vary based on two factors: location and what else?
424) Which percentage reflects the top debt-to-income ratio limit for qualified mortgages?
425) Which agency sets the guidelines for qualified mortgages?
426) In 2008, as a response to the 2007 financial crisis, the Federal Housing Finance Agency began acting as conservator over which institutions?
427) Which of the following is an example of a government-sponsored enterprise (GSE)?
428) A buyer with which of the following debt-to-income ratios can obtain a qualified mortgage?
429) What kind of communities does Farmer Mac serve?
430) From a secondary market player, Regional State Bank received an advance in exchange for collateral in the form or mortgages. Which entity likely issued this advance?
431) ______ works with lenders to make long-term credit available to homeowners and businesses in agricultural and rural communities, including farmers and ranchers.
432) When Fannie Mae purchases a loan, they pay the loan originator a(n) ______ fee.
433) Which of the following entities buys primarily conventional loans from large commercial banks?
434) What’s a participation certificate?
435) Synergy National Bank issued a conventional loan that is eligible for purchase by Fannie Mae. When Fannie Mae purchases the loan, what will Synergy National Bank receive in return?
436) Which of the following is a cooperative?
437) Which of the following loan types can be packaged into a mortgage-backed security eligible for guarantee by Ginnie Mae?
438) The Government National Mortgage Corporation was created in 1968 under the Department of Housing and Urban Development (HUD) and is more commonly known as ______.
439) What is the benefit Ginny Mae investors have over those who invest in other MBSs?
440) Conventional loans from large commercial banks are the primary target for which secondary market player?
441) Which of the following types of properties may be eligible for purchase by Freddie Mac?
442) In a loan to purchase which of the following property types is NOT eligible for purchase by Fannie Mae?
443) While Fannie Mae considers total and housing debt-to-income ratios in its underwriting process, Freddie Mac considers ______.
444) Matt owns Pic Bar Ranch and is looking to purchase the adjacent ranch. When he talked to his local lender, the lender offered Matt a loan that will likely be backed by _____.
445) Ginnie Mae only guarantees mortgage-backed securities that contain loans ______.
446) Which institution guarantees mortgage-backed securities with the full faith and credit of the United States?
447) Freddie Mac targets which type of loans to purchase?
448) Which of the following is considered an ineligible property type for which a loan to purchase or refinance wouldn’t be purchased by Fannie Mae?
449) The Federal Agricultural Mortgage Company (FAMC), created in the late 1980s, is more commonly known as ______.
450) If you were a farmer who obtained a loan for your business, it’s most likely that your lender will sell your loan to which of the following entities?
451) Which secondary market player would be interested in purchasing a loan from a commercial bank?
452) Regional State Bank is a member bank of the Federal Home Loan Bank. In exchange for mortgage collateral, Regional State Bank received a loan from the FHLB so it can make additional loans to consumers. What is the loan called that Regional State Bank received?
453) What are advances?
454) Federal Home Loan Bank is regulated by what agency?
455) Which institution was created as the Federal National Mortgage Association in 1938?
456) Which entity guarantees mortgage-backed securities which have the full support of the U.S. government?
457) If Freddie Mac didn’t exist, which of the following would be a likely effect?
458) Regional State Bank has made a lot of loans to consumers in the community and is running low on funds. It seeks a loan from the Federal Home Loan Bank. This loan is called a(n) ______.
459) Freddie Mac’s mission is to provide ______, stability, and affordability in the U.S. housing market.
460) Which of the following is Fannie Mae most likely to purchase?
461) A ______ is a mortgage-backed security issued by Freddie Mac.
462) Which of the following entities buys loans primarily through thrifts?
463) Credit flows to rural communities largely through the actions of ______.
464) A lender benefits from selling loans to Fannie Mae by ______.
465) Jessica hasn’t paid the roofing company that replaced the roof on her home. The contractor placed a mechanic’s lien on her property, which is a(n) ______ lien.
466) Which real estate finance instrument includes the promise to repay and the security instrument within the same document?
467) When a promissory note is sold, how is ownership transferred?
468) Susan’s cat bit and scratched her neighbor, who’s suing Susan. The lawsuit resulted in a judgment against her. Susan does not want to pay the neighbor according to the judgment, so the court placed a lien against her property. How is this lien classified?
469) The three types of finance instruments that can be used when financing a real estate purchase are the note with mortgage, note with deed of trust, and ______.
470) The document that describes the loan amount and the terms for repaying and is attached to a security instrument is called the ______.
471) Which statement correctly describes a contract for deed?
472) Which parties must be identified on the promissory note?
473) Which of the following is a true statement about when a promissory note is sold?
474) Stacy is preparing to sell her home, but learns she can’t transfer the property until she removes an encumbrance. Which of these is encumbering her property?
475) Who holds the promissory note while it’s being repaid?
476) What is an encumbrance?
477) You may see a ______ named as a land contract, real estate contract, contract for sale, agreement for deed, or as articles of agreement.
478) Which of the following is NOT required to transfer ownership of a note?
479) Which of the following is a true statement about the use of a promissory note?
480) The mortgage and the deed of trust are ______ that pledge property as collateral for a loan.
481) Which of the following describes an encumbrance?
482) When a promissory note is sold, what is recorded in county land records?
483) Which of the following is an example of an involuntary, specific, statutory lien?
484) Jody is concerned about the ______ encumbrance that doesn’t allow her to start her gardening greenhouse because it sits next to a nature conservancy.
485) Max has a dog that bit his neighbor. The neighbor sued Max, which resulted in a judgment against him. Max refused to pay the neighbor according to the judgment. The neighbor placed a lien against Max. How is this lien classified?
486) A mortgage lien is a(n) ______ lien.
487) Which of the following describes a mechanic’s lien?
488) A beneficiary, trustor, and trustee are the parties involved when the finance instrument is a ______.
489) Travis made the final payment on his loan according to the loan terms. What must the note holder do to acknowledge that the debt has been repaid?
490) Sean hasn’t paid his property tax. The tax collector places a lien on his property. How is this lien classified?
491) Which of the following statements about liens is true?
492) A homeowner who’s preparing to sell can’t transfer the property until an encumbrance is removed. Which of the following is an encumbrance that would delay the property sale?
493) Financing for a real estate transaction can use a note with a ______ or a note with a deed of trust.
494) What are the effects on a property if it includes an encumbrance?
495) What information is listed on the promissory note?
496) A vendor and vendee are the parties involved when the finance instrument is a ______.
497) A lender and a borrower sign a mortgage agreement, placing a(n) ______ lien against the borrower’s home.
498) What type of lien is placed on a property as a result of a court order?
499) Which of the following entities has the authority to place an equitable lien on a property?
500) Krista is obtaining a loan to buy a home. Her loan agreement consists of one document called a note and one called a deed of trust. What’s the role of the note?
501) Rich wants to add a room to his house, so he takes out a home equity loan. This creates a(n) ______ lien.
502) Which clause is standard in a deed of trust and affects the foreclosure process that can be used if the borrower defaults?
503) Select the choice that best translates this clause into plain English. “Any partial prepayment shall be applied against the principal amount outstanding and shall not postpone the due date of any subsequent monthly installments or change the amount of such installments, unless the Note holder shall otherwise agree in writing.”
504) A developer, Howard, has purchased land with the expectation of constructing an apartment building. He explains to his lender that he’ll need a construction loan as well, so the mortgage they sign includes what kind of clause to allow the construction loan’s lien position to take priority?
505) Select the choice that best translates this clause into plain English. “Upon payment of all sums secured by this Mortgage, Mortgagee shall discharge this Mortgage without cost to Mortgagor. Mortgagor shall pay all costs of recordation, if any.”
506) Bill’s loan is secured by a mortgage. Who holds legal title when this security instrument is used?
507) Which of these is a reason that the deed of trust is the standard security instrument used in California real estate transactions?
508) Which of the following features is shared by the mortgage and the deed of trust?
509) Andrea’s lender has notified her of its intent to foreclose. Her loan is secured with a deed of trust. What rights does she have to redeem her property?
510) Which clause refers to the order of liens on a property?
511) What’s the name of the clause in a promissory note where this language appears: “If the Note Holder has not received the full amount of any monthly payment by the end of ______ calendar days after the date it is due, I will pay a late charge to the Note Holder”?
512) What type of clause is this? “If any monthly installment under this Note is not paid when due and remains unpaid after a date specified by a notice to Mortgagor, the entire principal amount outstanding and accrued interest thereon shall at once become due and payable at the option of the Note holder.”
513) What type of provision is standard with either the mortgage or the deed of trust, but is included in the promissory note rather than the security instrument?
514) The ______ clause allows the borrower to pre-pay principal on the loan at any time without penalty.
515) What’s the name of the clause included in a finance instrument that requires the lender to release a portion of the property from the lien when a part of the debt has been paid?
516) When a borrower has paid off the loan, how is the release handled if the security instrument is a deed of trust?
517) The ______ clause protects the borrower’s assets that aren’t part of the voluntary lien from a deficiency judgment in case of foreclosure.
518) The ______ clause is also known as a due-on-sale clause.
519) In California, how has state law modified the way the deed of trust works?
520) When a borrower has paid off the loan, how is the release handled if the security instrument is a mortgage?
521) Gina’s mortgage payment arrives late one month. What language in the promissory note allows the lender to charge her a fee as a result?
522) Ava is borrowing money to buy some commercial property for her business. The loan agreement she signs includes a lock-in clause. What does that mean?
523) Which clause in the deed of trust is the equivalent of the defeasance clause in the mortgage?
524) What is the trustee’s role when a deed of trust is used to secure property for a loan?
525) The contract Jack is signing has a clause that protects his assets from a deficiency judgment in case of foreclosure. What is this called?
526) Albert wants to sell his house to his cousin, who’s willing to assume his FHA loan. What clause in Albert’s mortgage requires him to obtain the lender’s permission to do this?
527) Which of the following situations would make a borrower ineligible for a loan modification?
528) When is a loan modification considered?
529) In which of the following situations is a lender prohibited from enforcing an alienation clause?
530) How is a loan assumption documented?
531) Stephanie was having trouble making her mortgage payments. Now her payments are lower than they were, and she’s able to pay them each month. This is because her lender ______.
532) Denzel’s loan payments have been reduced because his lender agreed to extend the amortization schedule stated on his note. This is the result of a ______.
533) Violet purchased a house from Nick, and assumed the existing loan. Nick wants to make sure he isn’t liable if Violet ever defaults. What can he do to remove his name from the loan agreement?
534) When a buyer takes over the seller’s original loan with the lender’s permission, this is called ______.
535) Leslie has applied for a loan modification. As part of the process, her lender will likely ______.
536) When a buyer takes over payments on a loan without telling the lender, this is called a purchase ______.
537) Suzy has lost her job and wasn’t able to make last month’s mortgage payment. How is her lender most likely to help Suzy stay in her home?
538) Which one of the following statements is true for a sale that’s subject to an existing mortgage lien?
539) Ronald is having his existing loan modified. During the application process, why will Ronald’s lender perform a title search on his property?
540) Which of the following is one a way a loan may be modified when a borrower is having difficulty making payments?
541) Which of the following statements about an assumption is NOT true?
542) A homeowner was having financial trouble and was worried about having enough money to pay the mortgage. Instead of falling behind, the homeowner met with a representative from the mortgage company servicing the loan. As a result, the mortgage payments are lower, and the homeowner is no longer at risk of missing a payment. Which one of the following options could be a reason the payments are now lower?
543) Maggie has a neighbor, Jim, who is facing foreclosure. She likes Jim and wants to help him out, so they agree to do a “subject to” purchase. What does this mean?
544) A home equity line of credit (HELOC) is based on the homeowner’s available ______.
545) A seller buydown can ______.
546) When a real estate transaction is financed using a contract for deed, what advice should real estate agents give to their clients?
547) A buyer has agreed to purchase a property using a contract for deed. Who holds the legal title to the property during the term of the loan?
548) Babs is buying Kirk’s property. Babs needs help with the down payment, and Kirk offers to supplement Babs’ bank loan with a second loan, allowing her to meet her lender’s down payment requirements. Which finance instrument(s) may be used for the agreement between Babs and Kirk?
549) Your clients, the Nguyens, have signed a contract for deed to purchase a property. What rights do the Nguyens receive?
550) Jacob is selling his unencumbered property to Shem and is acting as lender in the transaction. Which type(s) of finance instrument can Jacob use for the loan agreement?
551) Bob is selling a four-bedroom house that he bought as an investment property. Victoria would like to buy it, but she has a low credit rating and can’t find a bank that will offer her a loan. After reviewing Victoria’s financial situation, Bob feels confident that she’s an acceptable risk. He offers to extend her a line of credit for the purchase in the form of a contract for deed. What issue should Bob be aware of?
552) Gertrude is buying Sam’s house, and Sam has agreed to finance the purchase. Gertrude is aware that a seller-financed transaction creates certain risks for her that a conventional loan wouldn’t. Which of the following is an issue that Gertrude is protected from via her loan agreement?
553) Wendy is buying a house from Tom. Tom helps Wendy out by paying for a 2-1 buydown. The lender has given Wendy an interest rate of 5%. Which of the following describes what the buydown will do to Wendy’s interest rate?
554) Lisa, a seller, is providing Darwin, a buyer, with a seller second on the purchase of her property. Darwin’s conventional lender uses a note with deed of trust to secure the first loan. What instrument is Lisa most likely to use for her second loan with Darwin?
555) How does a 3-2-1 buydown work?
556) Beth needs help with the down payment to buy Mark’s property. Mark is going to supplement Beth’s bank loan with a second loan, allowing her to meet her lender’s down payment requirements. What finance instruments may be used for this agreement?
557) Which of these statements about a buydown is true?
558) Which of the following is a potential concern of a buyer who’s entering into a contract for deed with a seller?
559) Victor is selling his property to Sheila. He’s acting as the lender, and the property is unencumbered. Which of the following options describes the type or types of financial instruments Victor may use for the loan agreement?
560) Ralph and Mort are neighbors. Ralph is selling, Mort is buying, and Ralph is offering a second loan to help Mort with his down payment, using a contract for deed. When Mort presents this idea to his lender, his lender balks. Why might that be?
561) A homeowner has been paying her mortgage for several years and has built up equity. She decides to take out a home equity line of credit because she needs some cash. This credit will create ______.
562) A foreclosure occurs January 1, 2016. Of the following, which lien takes priority?
563) What is the purpose of a lifting clause?
564) The Morris family home went into foreclosure December 15, 2016, and sold January 1, 2017. Their contractor had begun work on May 15, 2015, and was not paid, and finally filed a mechanic’s lien on October 1, 2016. What date will be used for lien priority for the mechanic’s lien?
565) Morris still owes his lender for the financing obtained in purchasing his home. Several years later, Morris took out a home equity line of credit. This means that ______.
566) Which of the following is true about a home equity line of credit?
567) What’s the purpose of a typical subordination agreement?
568) A property has just been foreclosed on. Which of the following describes the rules regarding lien priority?
569) What is the name for a loan that creates a lien against property that already has been pledged as collateral?
570) What is a carryback loan?
571) Brandon’s home has been foreclosed on. He had an outstanding loan balance of $145,000, which he owed to his lender, XYZ Lending for a loan taken out in 2009. There’s also a lien against the property recorded in 2014 for an unpaid student loan of $25,000, and a HELOC established in 2012 of $30,000, of which he’d used $10,000. If his foreclosure nets $150,000, how much will each creditor be paid?
572) What does the concept “first in time” refer to when discussing lien priority?
573) Who’s the mortgagee in a mortgage?
574) The signature lines on the multi-state Fannie Mae promissory note are set up for ______ to sign.
575) In a deed of trust, who is the beneficiary?
576) One difference between a judicial foreclosure and a non-judicial foreclosure is that with a non-judicial foreclosure, ______.
577) In a deed of trust, who is the trustor?
578) Fannie Mae’s multi-state note includes a due-on-sale clause, also known as a(n) ______ clause.
579) What is a statutory right of redemption?
580) Which of the following clauses is included in Fannie Mae’s multi-state note?
581) The ______ clause in a deed of trust allows the lender to foreclose non-judicially.
582) In a deed of trust, who is the trustee?
583) Regina has defaulted on the terms of her mortgage, and now her lender has foreclosed. The property was sold at a sheriff’s sale three months ago. Regina suddenly learns that she has inherited a great deal of money. She wants her property back. Under a judicial foreclosure, what right might allow her to buy her property from the winner of the foreclosure auction?
584) Who’s the mortgagor in a mortgage?
585) By stabilizing and improving the mortgage market, the FHA helped to build ______.
586) What’s a key feature of the Federal Housing Administration’s loan program?
587) Stan builds new homes. He feels good knowing that he’s providing safe and healthy homes for the community and that they are quality structures that will shelter people for many years to come. Which FHA benefit is at work here?
588) Percy is buying a home with an FHA loan. He uses the ______ to borrow enough money to cover the cost of replacing most of the windows in the home, which will improve its energy usage by 15%.
589) Jean is a high school English teacher. With the Good Neighbor Next Door program, she’s able to buy a foreclosed FHA-insured property ______, though she does have to agree to live on the property for three years.
590) Which of the following is true about the Federal Housing Administration’s qualifying standards for a mortgage loan?
591) FHA-insured loan programs cover all of the following EXCEPT ______.
592) Beverly has applied for a loan to purchase a Craftsman-style home for herself and her teenage son. Her mortgage broker helps her find an FHA loan program that accommodates her low down payment. Which program will serve Beverly’s needs?
593) Section 255 of the Title II FHA-insured loan program covers ______ mortgages for borrowers age 62 or older.
594) What is one way that the FHA has helped to stabilize and improve the mortgage market?
595) The Federal Housing Administration is part of the ______.
596) Which of these items did the Federal Housing Administration (FHA) implement to stabilize and improve the mortgage market?
597) The Tierney family obtained their four-bedroom home with an FHA loan 10 years ago. In another 20 years, they will have paid it off. Which FHA benefit applies here?
598) FHA offers a program for loan insurance on adjustable-rate mortgages under ______ of the National Housing Act.
599) Dana and Phil have evaluated their situation, and have decided to purchase a unit in a cooperative housing project. Which FHA loan program might work for them?
600) The Homeownership Voucher Assistance program is available to ______ to help pay monthly homeownership expenses.
601) Since the FHA was established, it has taken strategic action to stabilize the mortgage market. Which of these items is one of the FHA’s strategies?
602) The Federal Housing Administration’s mission includes ______ through the establishment of lending standards and by insuring mortgages.
603) The FHA loan program is designed for borrowers who ______.
604) Lenders who ______ can underwrite and approve FHA loans without requiring the FHA to review each borrower’s qualifications.
605) How does the Federal Housing Administration fund its mortgage insurance program?
606) Special mortgage loan programs for ______ include the FHA248 and HUD 184 programs.
607) The FHA is part of ______.
608) The FHA has helped to significantly improve the mortgage market through ______.
609) The FHA Section 203(h) program assists ______ with an insured mortgage.
610) The Federal Housing Administration’s loan program is designed for borrowers who ______.
611) The interest rate on an FHA Section 251 adjustable rate mortgage will ______.
612) Why might a homebuyer use an FHA 203(k) loan instead of the standard 203(b) loan?
613) When a homeowner has repairs made to a home using an FHA 203(k) loan, HUD requires ______.
614) The FHA ______ program allows a borrower to refinance an FHA loan without verifying income or assets.
615) Carla and Sven have a previous foreclosure, but now they are a few years away from that. They make good money with their jobs, and have about $30,000 available to use for a down payment and closing costs. Why might they consider an FHA 203(b) loan, even if they have sufficient down payment for a conventional loan?
616) The interest rate on an FHA Section 251 loan is adjusted based on ______.
617) Shania is having work done on the house she just purchased using an FHA 203(k) loan. How much time does the contractor have to complete the work?
618) The EEM program insured by the FHA requires an energy consultant to provide the lender with a report listing recommended modifications for energy efficiency, an estimate of the cost for each recommendation, and ______.
619) How and when does a contractor performing work associated with a 203(k) loan receive funds from the lender?
620) The minimum down payment for an FHA 203(b) loan is ______.
621) The FHA EEM program allows modifications such as solar panels as long as ______.
622) The Addams family has an FHA-insured loan. The family’s mortgage payment has a fixed interest rate, but after the first five years, the rate will adjust annually. Which FHA loan insurance program are they using?
623) Lucas would like to be a homeowner, but his low credit score makes lenders unwilling to give him a mortgage. What makes the 203(b) loan a more likely option for Lucas to qualify for a mortgage?
624) On an FHA 203(k) loan, the combined cost of home value and rehab must ______.
625) For borrowers who already have an FHA loan, the Streamline Refinance program offers the benefit of ______.
626) Cindy is buying an older home. It’s in reasonably good shape, but she figures she can reduce her energy bills by replacing some of the windows. If she applies for the FHA Energy Efficient Mortgage program, what step must she take to receive approval?
627) How does the FHA control the use of 203(k) money loaned for repairs to a home?
628) Which of the following statements is true about government loans?
629) To qualify for the FHA Streamline Refinance program, a homeowner must ______.
630) Which of the following applicants fall within the guidelines for an FHA-insured loan?
631) Which of the following statements is true about the annual MIP on an FHA mortgage?
632) Carmen purchased a single-family residence in Monterey County for $480,000 using an FHA loan and FHA’s minimum down payment. At the same time, Yancy made an offer on a single-family residence not far away in Fresno County for $300,000 with FHA’s minimum down payment and was told he could not use an FHA loan for the purchase. Why?
633) Trixie purchased her one-bedroom beach cottage in 1992 with an FHA loan. Now she’s selling it, and the buyer wants to assume her loan. The buyer intends to rent the cottage to vacationers. Will the FHA allow this buyer to assume Trixie’s loan?
634) FHA county loan limits are based on ______.
635) Sandra is a single woman fresh out of college. She hopes to qualify for an FHA loan. Her lender calculates her housing ratio as 31% and her total debt obligation as 43%. Her credit score is 480. Does she qualify under FHA underwriting guidelines?
636) When a buyer obtains an FHA loan, the seller may ______.
637) Read through each of the following pieces of information about buyers’ debt obligations and determine which one will qualify for an FHA loan based on the qualifying ratios.
638) Is a homeowner with an FHA loan allowed to obtain a second mortgage?
639) Ron and Dawn hope to qualify for an FHA mortgage so they can buy a home for their family. Their housing ratio is 28%, their total debt obligation is 45%, and their credit score is 650. Do they qualify under FHA underwriting guidelines?
640) FHA may adjust loan limits for each county ______.
641) When a buyer uses an FHA loan, the down payment amount is calculated ______.
642) Which of the following statements is true about the MIP on an FHA loan?
643) The upfront MIP on an FHA loan is calculated on ______.
644) The annual MIP is recalculated each year using ______.
645) The house payment Tim and Vickie are considering would give them a housing ratio of 34% and a total debt obligation of 40%. Their credit score is 640. What do they need to change to meet the underwriting requirements for an FHA loan?
646) Celeste hopes to qualify for an FHA loan. She calculates her housing ratio as 31%, and her total debt obligation as 42%. Her credit score is 580. Does she qualify under FHA underwriting guidelines?
647) Andy is selling his home to Erika and Doug, who are using an FHA loan for the purchase. To facilitate the purchase, Andy can agree to pay ______.
648) Chris and Nick hope to qualify for an FHA loan. Their lender calculates their housing ratio as 33% and their total debt obligation as 43%. Their credit score is 620. Do they qualify under FHA underwriting guidelines?
649) Your client, Judy, with a credit score of 620, has been approved for an FHA loan for a home with a sales price of $200,000. What is the minimum down payment that will apply?
650) Which of the following is a true statement about FHA financing?
651) How might a borrower avoid paying the mortgage insurance premium required by an FHA loan?
i. +Get conventional financing
652) Which of the following is a true statement about HUD’s Good Neighbor Program?
653) What makes the HECM program safer for borrowers than a traditional reverse mortgage?
654) Lydia put the minimum 3.5% down on her $210,000 home. She’ll have to pay an MIP. What type of loan does Lydia have?
655) Which of the following is a significant drawback to an FHA loan as compared to conventional financing?
656) Your client, Yolanda, is a nurse. Does she qualify for the Good Neighbor Program?
657) Which of the following individuals would qualify to purchase a home under the Good Neighbor Program?
658) Jarod has obtained an FHA loan for which he pays an annual mortgage insurance premium. How will he likely make this payment?
659) Homeowners over the age of ______ are eligible for the HECM program.
660) Your client, Ray, wants to purchase a home listed for $200,000. The home is in a revitalization area, and Ray can purchase it under the Good Neighbor Program. How much will he have to pay for the home?
661) What is the HECM program?
662) Sylvia is shopping for a mortgage. Because she’s a veteran, she compares the VA home loan with the 3.5% down FHA mortgage. If she has only $5,000 available in cash, with all else being equal, which loan will allow her to spend more on a home?
663) When does the need for mortgage insurance end for a borrower who has a VA loan?
664) With a VA loan, the borrower must receive a certificate of eligibility. What must the property receive?
665) When does the mortgage insurance requirement end for a borrower with a VA loan?
666) Molly’s father has a service-related disability. He lives with Molly and her family in a home that she owns. Can funds from a VA-specific housing grant be used to modify Molly’s home to accommodate her father’s disability?
667) Pattie is the widow of Oscar, a member of the Army who was killed in action. When she uses the VA loan to buy her first home, what percentage of her loan amount will be charged as a funding fee?
668) Sissy is a veteran who used her full entitlement to purchase a home. The loan has since been paid off, and Sissy still owns the home. Now, she’d like to buy a second home using another VA loan. Is Sissy allowed to do this?
669) Which of the following statements is true regarding closing costs on a VA loan?
670) Because of the funding fee required for a VA loan, a borrower with no down payment funds saved should ______.
671) Rhoda is a first-time homebuyer. She has applied for a VA loan to buy a house from Phyllis. When the CRV values the home at less than the sale price, Phyllis refuses to come down on the sales price, so Rhoda must either ______ or find a different home to buy.
672) A lender qualifies a borrower for a VA loan based on ______.
673) A borrower who has received a certificate of eligibility will qualify for a VA loan under which of the following circumstances?
674) Fatima is using a VA loan to purchase a home from Sue. Sue agrees to pay Fatima’s closing costs. Which of the following statements is true?
675) When a veteran assumes a VA loan, the ______ agreement can restore the original buyer’s level of entitlement as if the loan were repaid in full.
676) John uses the VA home loan to purchase property. His mortgage is $200,000. Then, two years later, John defaults on his loan. How much will the VA reimburse the lender?
677) Jamal is active military. His cousin, Piper, is in the National Guard. If they both qualify for a VA loan ______.
678) ______ is the term that the VA uses to describe the amount of net income remaining after deduction of debts, obligations, such as utility and phone bills, and monthly shelter expenses.
679) For which of the following programs are veterans not required to submit a COE, get a new appraisal, or verify income?
680) Yancey purchased a home six months ago using a VA loan. Due to an inheritance, he is suddenly able to pay off his mortgage. Will he pay a pre-payment penalty?
681) The ______ is provided by a VA-assigned appraiser.
682) How does the VA fund the mortgage guarantee program so that lenders can be reimbursed for any losses from borrower default?
683) What type of loan can be obtained with no down payment?
684) With a VA loan, the certificate of reasonable value is used to ______.
685) The amount of the ______ a veteran must pay depends on factors such as military status, down payment amount, and whether the veteran’s entitlement is being used for the first time or a subsequent time.
686) A veteran who has received a certificate of eligibility will qualify for a VA loan ______.
687) The funding fee on a VA loan is waived when ______.
688) Which of the following is a true statement about borrower qualification standards for a VA-guaranteed loan?
689) Which of the following is a requirement for veterans who wish to use the Native American Direct Loan?
690) Cathy is hoping to purchase a home using a VA loan. A VA-assigned real estate appraiser is required to provide ______ for the property.
691) Which of the following is a requirement to qualify for a VA loan?
692) The VA loan program offers a basic entitlement amount of ______.
693) Nadia uses a VA loan to buy a house for $125,000. She wants to buy the neighboring property, an empty lot, so she can improve the house using the extra land. The lot is for sale for $135,000. Can she use a VA loan for this purchase?
694) Captain Kirk is a veteran who sells his home to Leonard. Leonard is also a veteran, and they agree to let Leonard assume Captain Kirk’s VA loan for the property. They agree to a novation, which is ______.
695) Which of the following statements is true about buydowns with a VA loan?
696) Which is a requirement for veterans to use the VA’s Specially Adapted Housing grant?
697) Chuck needs to make a few repairs and upgrades to his home, but he needs some cash to do it. He decides to tap into the equity in his home, which he purchased using a VA home loan. What VA program can Chuck use to do this?
698) Marissa is obtaining a VA loan, and she’s decided to place 20% down. What’s her responsibility for paying the VA loan funding fee?
699) Which of the following statements is true about the VA’s Native American Direct Loan program?
700) Which of the following tells the lender how much entitlement the veteran has available under the VA loan program?
701) Millie and Jerry are purchasing a home using their VA loan benefit. The sales price is $320,000, with 100% financing. Assuming that Jerry has a typical level of entitlement, how much of their loan does the VA guarantee?
702) Where does a veteran have to live to qualify for the Native American Direct Loan?
703) Which of the following statements about the VA guaranteed home loan program is true?
704) Roger is a veteran with a service-connected disability that requires him to use a wheelchair. He is eligible for the VA’s Specially Adapted Housing grant. What can he use this grant for?
705) Greg is selling his home to a veteran who’s using a VA loan. When the transaction starts to stall, Greg tries to motivate the buyer by including his giant flat screen TV, valued at $1,200, as a gift. Is Greg allowed to do this?
706) Bart is selling his home and has accepted an offer from a buyer, who’s obtaining a VA loan. The sale price is agreed upon and is in the purchase contract. Then Bart receives a call from his agent, explaining that the buyer is hoping that Bart will lower the sale price because ______, and there is a risk the buyer will not be able to get the VA loan as a result.
707) A second mortgage on property secured by a VA loan is acceptable under certain conditions, one of which is that the first and second mortgage liens ______.
708) The Ropers are purchasing a home using VA financing. The sales price of the home is $210,000. The CRV comes in at $215,000. On what number will the VA’s loan guarantee be based?
709) What qualifying ratios are used in a VA home loan?
710) Your client, Shelby, a veteran using a VA loan to finance her purchase, just learned that the CRV came in lower than the sales price. But no problem: Shelby’s brother is willing to loan her the difference. If the loan is approved, ______.
711) How does the VA qualify a property for a VA-guaranteed loan?
712) What percentage of closing costs can be included in a VA loan?
713) Does the VA make direct loans?
714) A VA loan program that allows a veteran to refinance at a lower rate and receive cash proceeds to fund other investments or purchases is ______.
715) What is the interest rate on a VA loan?
716) Tom’s CRV came in low and he’s decided to make up the difference in cash. What else will be required?
717) Your buyer, Chet, is a veteran trying to buy a house, but the certificate of reasonable value came in $10,000 lower than the agreed-upon sales price. What can Chet do?
718) How do VA loan programs compute “residual income”?
719) You have a client who wants to obtain a VA loan. You refer them to ______.
720) Which of the following VA programs requires a credit check, new appraisal, and income verification?
721) Your client has a VA loan and wants to refinance to a lower rate. Which of the following is likely the simplest option?
722) Chanel is buying a brand new home with a VA loan. She’s obtained a certificate of reasonable value. For how long is that CRV valid?
723) What type of loan is neither guaranteed nor insured by government agencies?
724) An ARM usually offers an initial interest rate that’s ______ a fixed rate mortgage for a period of time.
725) The ______ is where the borrower finds details about how, when, and by how much the interest rate will change in an adjustable rate mortgage (ARM).
726) Client Bette asked licensee Frank about a home equity line of credit versus home equity loan. Which of the following offers an brief overview of what a home equity line of credit is?
727) What feature do most adjustable rate mortgages have?
728) To which of the following borrowers might a lender be most likely to recommend an FHA loan?
729) Which of the following statements is true about conventional loans?
730) A loan that’s offered based on a homeowner’s equity in which funds are drawn over time and the bank gains corresponding property ownership is called a ______.
731) A loan made based on the amount of equity available in an person’s home or property is called a ______.
732) A client makes regular monthly payments on a loan. In addition to paying interest, the client is slowly paying down the principal of the loan. With each payment that is made, more will go towards the principal and less to interest. What type of loan does the client have?
733) With an interest-only loan, what happens after the specific period of time that interest-only payments are made is over?
734) Commander Halfback retires after 25 years of service in the Coast Guard. He is looking to buy a home. What type of loan should he use?
735) What’s true about the draw period on a home equity line of credit (HELOC)?
736) The Baxters are looking at a $425,000 home. They have $90,000 in savings to use as a down payment. What loan type(s) would likely be the best option for them?
737) What’s the purpose of the fixed/adjustable rate note?
738) Which of these best describes a home equity loan?
739) Goldie and Kurt are looking at purchasing their first home. Their credit history is a little shaky and they don’t have enough money saved to put down 20%. What type of loan seems most appropriate?
740) When an adjustable rate mortgage (ARM) makes its initial adjustment, it does so to its fully indexed rate. What makes up the fully indexed rate?
741) Stacey’s lengthy military service makes her uniquely eligible for a(n) ________.
742) Seller Jerome found financing that would include his current mortgage inside the buyer’s mortgage. What type of mortgage is this?
743) What are the main benefits to veterans of the VA-guaranteed loan program?
744) What’s one reason a borrower would choose a split—or piggyback—loan option?
745) Borrowers who refinance and use equity to pay off credit card debt should be aware that ______.
746) The Bransons have a conventional loan for which they were required to obtain private mortgage insurance. Their local real estate market has been going like gangbusters, and their house is now appraised at twice their loan balance! Will their PMI be cancelled?
747) Which of the following should be taken into account when considering refinancing a mortgage loan?
748) What’s one reason a borrower may choose a piggyback (or split) loan?
749) What type of partnership is a cooperative?
750) Which of the following characteristics applies to a partnership between mortgagors?
751) Lenders are more comfortable when borrowers have around 20% of the property’s purchase price to serve as what kind of payment?
752) Johnston was thrilled that he could cash in on the ______ in his home by refinancing, and using it to purchase a camper he had his eyes on for months.
753) For conventional loans in which the loan-to-value ratio is in excess of a certain percentage, lenders generally require private mortgage insurance. What’s this percentage?
754) What type of partnership is a real estate mortgage investment conduit?
755) In which type of partnership is the lender a partner as well as the financier?
756) What’s the purpose of PMI?
757) What’s the most common ratio for borrowers who use split, or piggyback, mortgages?
758) Private mortgage insurance protects the lender in case the borrower takes which of the following actions?
759) Sophia and Antonio are expecting twins. They want to sell their old house and buy a larger home using a conventional loan. In order to be sure they’ll get the PMI waived, what will they need to have?
760) Sophie only has 15% to put down on her new home. What might the lender require in order for Sophie to obtain conventional financing?
761) Scott has plenty of money saved and is ready to make a down payment on his $14 million dream home. One problem: Scott doesn’t want to end up with a jumbo loan because he goes over the conforming loan limit. What option does Scott have?
762) Which type of participation agreement involves more than one mortgagee as owner of the finance instrument in which each receives an equal share of the mortgage payment?
763) Which type of partnership may involve several mortgagors financing a multi-family dwelling?
764) In which type of participation agreement would a financier lower the interest on the mortgage in exchange for partial ownership of the project?
765) Barb is considering a refinance. She wants to stick with a conventional loan. Why might she be wary of an introductory rate?
766) What’s another name for the Homeowner’s Protection Act?
767) In which type of partnership does each mortgagee receive a share of the mortgage payment?
768) In which type of partnership is there is more than one mortgagor as owner?
769) In which type of partnership do participants have shared responsibility for a single mortgage?
770) What’s one reason a homeowner would want to refinance their mortgage?
771) A refinance is always a ______.
772) How long does the borrower have to pay private mortgage insurance?
773) Which of the following acts created regulations for advertising credit services?
774) The Covered Loan Law limits total fees and points paid by the borrower prior to closing to what amount?
775) Which of the following lending regulations apply to mortgage loans and settlement services?
776) In 2001, California legislators enacted the ______ to combat predatory lending practices.
777) Borrowers with B, C, and D credit ratings are ______ borrowers.
778) Borrowers who fall into the ______ category may be faced with paying interest 1% to 5% over the current market rate.
779) Which of these is actually an amendment to the Truth in Lending Act (TILA)?
780) ______ make homeownership available for many who otherwise could not qualify for a mortgage loan.
781) What does TILA stand for?
782) Borrowers should be wary of lenders who offer mortgages at more than ______ over current market interest rates.
783) Interest rates that are more than ______ over the current market rate are considered predatory lending.
784) In the residential mortgage market, charging borrowers more than ______ over market rate for interest is considered a predatory lending practice.
785) The ______ restricts refinancing when the new loan has no identifiable benefit to the borrower.
786) Approximately how many states have predatory lending laws?
787) Which of the following specifies a requirement of pre-loan counseling for consumers?
788) ______ lending was a contributing factor to the housing collapse in the mid-2000s.
789) What’s the purpose of California’s Covered Loan Law?
790) One common predatory lending practice is to charge fees for unnecessary or ______ loan products or services.
791) Which of these acts has special provisions for borrowers who are victims of over-charging?
792) Joseph’s got B-rated credit, and his commercial bank suggested he check with the specialty mortgage company down the street because they deal in subprime loans. What’s NOT true about Joseph’s situation?
793) A like-kind exchange, or 1031 exchange, is also referred to as a ______.
794) Which of the following could an investor who sells an apartment house buy using a 1031 exchange?
795) In a 1031 tax-deferred exchange, what role does the qualified intermediary serve?
796) John sells his single-family home and purchases a new home for his family to reside in. Marcus owns a single-family home, but rents it out to a co-worker while he is on an extended two-year military tour overseas. Donald sells an apartment complex and purchases a new complex in a different part of the city. Which of these consumers is most likely to take advantage of a 1031 tax-deferred exchange?
797) Which section of the Internal Revenue Code allows the owner of real property to sell that property, then reinvest the proceeds in a “like-kind” property and defer paying any capital gains taxes?
798) Ted’s property is in foreclosure, but he has some equity in his property. An investor suggests that she and Ted enter into a sales contract for a substantially higher price than the investor would actually pay. The investor pockets the cash and allows the house to be foreclosed on. What sort of scheme is this?
799) Britney is selling her bungalow via an installment contract. The buyer made payments dutifully for five years, but has not made any payments for more than a year. Which of the following is true?
800) What is a reverse exchange?
801) Jose is an investor who found and closed on an investment property, then decided to sell a property other than the one originally marked for the exchange. What is this an example of?
802) Samuel and Yoshi have worked at the same firm for a few months and get along well. Samuel mentions he has a credit score in the low 800s. Yoshi, who’s just starting out, persuades Samuel to sign for a loan to help Yoshi buy a property, since his credit isn’t good enough. Yoshi promises to make the mortgage payments, but two months after the deal closes, Yoshi moves across the country. Samuel’s now stuck with a $400,000 mortgage. What type of scheme is this?
803) John wants to do a 1031 tax exchange with a property he just sold. How many calendar days does he have to identify a new property for the exchange?
804) For tax years 2018 to 2025, a borrower can write off the interest on a home equity loan only if ______.
805) Which of the following is a true statement about deducting interest on mortgages taken out in tax years between 2018 and 2025?
806) What advantage does the 1031 tax-deferred exchange offer?
807) Bob just closed on his investment property. He’s already identified a replacement property that he’ll be exchanging into by using a 1031 tax-deferred exchange. How many days does he have to close on his replacement property?
808) What type of professional must an investor use to conduct a tax-deferred exchange?
809) 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?
810) What is the three-property rule as it relates to tax-deferred exchanges?
811) To whom would a 1031 tax exchange usually appeal?
812) John wants to do a 1031 tax exchange. He just sold his property. How many days does he have to close on a new property?
813) What is the 95% rule as it relates to tax-deferred exchanges?
814) In a 1031 exchange, there are rules governed by Section 1031 of the Internal Revenue Code. The rules include _______.
815) What is another name for an installment sale contract?
816) What is the 200% rule as it relates to tax-deferred exchanges?
817) Cheyenne is selling the family farm via an installment contract. What is one advantage of selling the farm this way?
818) What type of investment strategy is most similar to a 1031 tax-deferred exchange?
819) Which of the following is a reason a seller might consider selling his property through an installment contract rather than a traditional sale?
820) Which of the following statements related to 1031 tax-deferred exchanges is true?
821) Remy’s mortgage payment is $1,256.28. His annual property taxes are $809, and his annual insurance premium is $712. How much of his payment goes toward the principal and interest?
822) What does the “T” in PITI stand for?
823) Calvin purchased a house for $220,000, financing $200,000 using a 30-year conventional mortgage at 4% interest. His monthly payment is $955, including both principal and interest. The annual property taxes are $1,400 and the combined annual insurance premium is $900. What’s Calvin’s PITI payment each month?
824) In calculating PITI for a mortgage payment, the annual taxes and insurance are divided by ______ and are added to the monthly principal and interest payment to make up the total monthly payment.
825) In the early years of a mortgage loan term, which portion of the payment is likely to be the largest?
826) If the annual taxes on a property are $1,000, how much is paid monthly?
827) In an amortized loan, the interest portion of the mortgage payment generally ______ over the life of the loan.
828) How’s interest defined as it’s related to a mortgage loan payment?
829) Sophia’s annual property taxes are $1,295, and her annual insurance premium is $942. How much of her monthly mortgage payment goes toward taxes and insurance?
830) An annual insurance premium is $500. What’s the monthly insurance payment?
831) Mortgage, homeowners, and flood ______ may be included the mortgage payment.
832) What do property taxes in a mortgage payment pay for?
833) The acronym PITI is a reference to what real estate-related concept?
834) A homeowner’s monthly mortgage payment is $580.23. If the taxes are $83.33 and the insurance is $41.66, how much of the monthly payment is principal plus interest?
835) Curtis is completing a residential loan application. Which of the following would he include in the assets section?
836) Who is generally responsible for providing the Loan Estimate during the loan approval process?
837) Tara has made an offer on a home and is completing the loan application. Which of the following is an asset that she’ll list?
838) Maria is applying for a loan. Maria’s employer has been asked to provide employment verification. Who else must complete parts of the request for proof of employment form?
839) Naomi is completing a residential loan application. On the application, she lists her assets and liabilities so that her net worth can be determined. What’s net worth?
840) Bella is a lender. Joshua is the loan applicant. They both complete their part of the request for verification of the deposit form. The last party to complete the deposit form will be the _______.
841) When a borrower is completing a loan application, obligations owed by the borrower are listed in the ______ section.
842) Larry is a lender processing a loan application. Which of the following might he request to verify the applicant’s bank deposit information?
843) The Barbers are looking to purchase a new home for their family of four, but they’ll need to be approved for a loan. What document will they need to complete to initiate their loan process?
844) Bobby is completing a residential loan application. On the application, he lists his liabilities. What are liabilities?
845) Which party to the loan approval process evaluates the loan application, the supporting documentation and data, and the property appraisal in order to make an approval recommendation?
846) A lender, reviewing a prospective applicant’s loan application, wants to verify that he has a solid history of paying obligations on time. What should the lender request from him?
847) What must a prudent lender do with the information received on a loan application?
848) Which of the following net worth examples may a lender view most favorably?
849) Which of the following, once completed, initiates the loan process?
850) When a borrower is completing a loan application, items of value the borrower owns are listed in the ______ section.
851) Which party to the loan approval process is responsible for providing the Loan Estimate?
852) Borrowers must list their liabilities when completing a residential loan application. What are liabilities?
853) Which of the following may a lender request to verify an applicant’s bank deposit information?
854) Which of these items is an asset to list on a residential loan application?
855) When completing a loan application, the applicant must list their assets. Which of these is considered an asset?
856) The loan applicant, the employer, and the ______ all complete parts of the request for verification of employment form.
857) Sally, a lender with A+ Banking, has received a loan application from a prospective buyer hoping to purchase a four-bedroom house. What does Sally do with the information she’s received?
858) Completing a residential loan application requires providing information about the loan being requested, the property being purchased, and the ________.
859) The lender, the employer, and the ______ all complete parts of the request for verification of employment form.
860) Jared is buying a condo from Luke. Sally is Jared’s lender, and Thomas is Jared’s agent. Meredith is Luke’s agent. Who is responsible for providing the Loan Estimate?
861) Which of these items is a liability on a residential loan application?
862) The loan applicant, the depository institution, and the _______ all complete parts of the request for verification of deposit form.
863) What are assets (as they related to the residential mortgage process)?
864) Mark is a single father applying for a loan to buy a house of his own. Which of these items is a liability on a residential loan application?
865) When completing a loan application, applicants must list any items of value they own. What’s another term for these items?
866) The lender, the depository institution, and the _______ all complete parts of the request for verification of deposit form.
867) Kelly is reviewing Steve’s loan application. She wants to verify that he has a solid history of paying obligations on time. What should she request to do this?
868) Brian is completing a residential loan application. On the application, he lists his assets. What are assets?
869) What is the formula for calculating the total debt ratio?
i. +(Monthly debt payments ÷ gross monthly income) × 100
870) Payment history, credit usage, inquiries, and types of accounts are factors considered in calculating a credit score. Which of the following options is also a factor?
i. +Age of accounts
871) Lender Ron is running Sally’s credit report. In which section of the credit report might Ron expect to find information regarding her loan that was paid off on time?
872) Consumers in the _______ range have an above-average credit score. They tend to qualify for better interest rates than those in the “acceptable” category.
873) Benny is self-employed. He’s experienced a bit of success over the last few years and is now ready to purchase a home. He’s meeting with a lender later today. What can Benny expect?
874) In which of the following sections of a credit report might a lender expect to find a loan that has been paid off on time?
875) Jim is self-employed. He and his wife want to obtain a home loan. Which of the following statements is true?
876) From a lender’s perspective, what does a credit score on the low end indicate?
877) Consumers in the _______ range are well above the average credit score and generally have an easy time getting approved for new credit.
878) Which consumer inquiry has Zachary initiated that may appear on a credit report?
879) Why might self-employed individuals who want to obtain financing for a home purchase, choose not to write off valid expenses on their tax statements?
880) Normal wages are considered when a lender is evaluating an applicant’s income. Which of the following must be true for overtime pay to be considered?
881) The median credit score for most consumers is _______.
882) Payment history, age of accounts, credit usage, and types of accounts are factors considered in calculating a credit score. What’s also a factor?
883) Joseph is self-employed and wants to buy his first home. What additional document may he need to provide to the lender when trying to obtain a loan?
884) Margo, a mother of three, is in the group most likely to become delinquent on their payments, with a credit score of _______. Margot’s tried unsuccessfully to get approved for loans, but she was issued a credit card that included many extra fees and required deposits.
885) In order for the spousal support Kayla receives to be considered in the lender’s income evaluation when Kayla applies for a home loan, what must be true?
886) The Davidsons’ lender is trying to approve them for a conventional loan. What is the minimum percentage of total debt ratio they must have to be eligible a conventional loan?
887) Juan’s credit score is being pulled. Which of these actions would have a positive effect on his score?
888) Payment history, age of accounts, credit usage rate, and inquiries are factors considered in calculating a credit score. Which of the following is also considered?
889) Which of the following is an example of an inquiry initiated by a creditor (without the consumer’s permission) that may appear on a credit report?
890) In which section of a credit report may a lender expect to find a loan that the consumer is delinquent on?
891) Ally is reviewing the personal information on her credit report. What information is NOT included in the personal information section?
892) Which of these would most likely be found in the “potentially negative items” section of a credit report?
893) Which range of credit scores represents subprime borrowers?
894) Which of the following factors carries the heaviest weight when calculating a credit score?
895) Jackson has received several inquiries on his credit report. Which of these inquires was one he did NOT initiate?
896) Which of these would most likely be found in the “accounts in good standing” section of a credit report?
897) Which of the following factors carries the least weight when calculating a credit score?
898) Which range of credit scores represents the average score for Americans overall?
899) Which factor is NOT used to determine a FICO® credit score?
900) Which is the most important factor used to determine a credit score?
901) Julia is trying to buy a house and is going through the loan application process. As part of the process, her credit score was run. Which of these issues would harm her score?
902) Tina is applying for a home loan. In order for child support payments she receives to be considered in the income evaluation by her lender, what must be true?
903) Which of the following is the credit score range?
904) Julia is applying for a loan. Her lender uses her credit scores to determine whether to approve her loan application. What do Julia’s scores tell the lender?
905) Payment history, age of accounts, inquiries, and types of accounts are factors considered in calculating a credit score. What’s another item that’s considered?
906) How are account numbers displayed in a credit report?
907) In order for earnings from a second or part-time job to be considered as part of a lender’s income evaluation, what must be true?
908) Ralph and his wife are hoping to purchase their new home. Their lender is running their credit scores. How are Ralph and his wife’s credit scores determined?
909) Which of the following is an example of an inquiry a consumer initiated that may appear on a credit report?
910) What is the formula for calculating the total housing ratio?
911) Which of these is true about the assessed value of real estate?
912) Under AIR, there are limits to the actions licensees may take to avoid influencing the appraiser’s value. What are licensees NOT allowed to do?
913) Which of the following might involve old wiring or plumbing?
914) Which of the following approaches to value uses a capitalization rate?
915) What acronym can be used to remember factors that influence real property value?
916) Which of the following actions toward an appraiser would be considered improper?
917) Appraiser Jamie is looking past how a property is being used to determine a higher value. What is Jamie determining?
918) Appraiser Jerry is looking past how a property is being used to determine a more optimal function. What is he determining?
919) Which factor that influences value considers the property’s function?
920) Joaquin is an appraiser. What purpose do Joaquin and other appraisers serve?
921) Which factor influences property value and addresses questions such as, “What’s the market like?” and “Are there more buyers than sellers, or vice versa?”
922) Who typically performs an appraisal?
923) What information would an appraiser record in the Site section of the Uniform Residential Appraisal Report?
924) Appraiser Victor is determining the insured value of a property. What is he evaluating?
925) Which of the following terms means the price a property is worth to its owner as currently enjoyed?
926) Which of the following is the cost of replacing a building in the case of total loss?
927) Which of the following is a piece of general data an appraiser may gather?
928) Which of the following loans may require compliance with Appraiser Independence Requirements?
929) What’s one purpose of a BPO?
930) What type of property is Aileen appraising if she’s using the income approach?
931) Rico is an appraiser who is performing a valuation on a property. What’s another term for what Rico is doing?
932) What is the purpose of the Uniform Residential Appraisal Report?
933) Soren is an appraiser. As such, what guidelines must he follow?
934) Kobi, an appraiser, is appraising a single-family home used for a rental. If he wants to use the income approach, which of the following will come into play?
935) If there is some kind of defect on a property’s title, what effect does this level of transferability have on the property’s value?
936) Which approach to finding value would licensed appraiser Christina probably weigh most heavily when appraising a three-unit rental property?
937) When appraisers look past how a property is being used to determine a more optimal function, what are they determining?
938) Your client, Skip, is an investor who’s just opened a thriving new sporting goods store in a location outside the city. What principle of value indicates that his thriving business will attract others to engage in similar activity in the same area, driving down his profits?
939) What is reconciliation?
940) Which appraisal approach will likely weigh most heavily during the reconciliation step when appraising a single-family residence?
941) Boris is an appraiser working for the Smith family. They’ve hired him to perform an appraisal on their six-bedroom house. What two types of data will Boris gather?
942) What piece of information would an appraiser NOT find in the Subject and Contract sections of the report?
943) What type of property is Gerald appraising if he’s using the cost approach?
944) What type of value may consumers be interested in if they are looking for the potential rate of return?
945) Which of the following is the price a lender believes the property will bring at a foreclosure sale?
946) When appraiser Archie uses the sales comparison approach, at least how many comparables may be included in the URAR?
947) Which item would an appraiser find in the Improvements section of the Uniform Residential Appraisal Report?
948) This could happen if a factory were put in next door that changed and impacted property value.
949) What’s another term for a valuation that’s an unbiased opinion of value?
950) Identifying the purpose of the appraisal leads the appraiser to do what next?
951) The fewer properties on the market, the greater the scarcity. What’s the effect on prices?
952) Which appraisal approach is likely the best choice for appraising a movie theater?
953) What two types of data does an appraiser gather?
954) What’s the first step an appraiser will perform when conducting an appraisal?
955) What does Susanna do as an appraiser?
956) Mary Ann is looking for the potential rate of return. What sort of value is she interested in?
957) Kevin is having an appraisal performed on a piece of property he’s interested in buying. He’s especially interested in hearing about the estimated rate of return the property could pull. What type of value is he interested in?
958) Which of the following is a piece of specific data an appraiser may gather?
959) There are a lot more sellers than buyers in the current market. How does this demand influence value?
960) Marsha made an offer of $325,000 on a home listed for $350,000. The seller accepted her offer. What service will her lender order to determine the home’s actual value?
961) Which of the following characteristics would the appraiser find in the Neighborhood section of the URAR?
962) Which of the following is a characteristic of value?
963) What type of value is of interest to taxing authorities?
964) What information does the appraiser complete for the section used for the income approach?
965) John’s home is up for sale. He originally bought it five years ago for $300,000. Its current value is $350,000. His real estate agent notified him that a buyer just made an offer on his home for $365,000, which is the price for which other similar homes in the neighborhood are selling, and John accepts. What does the price of $365,000 represent?
966) Which of the following is true regarding value?
967) What type of property is Valerie appraising if she’s using the sales comparison approach?
968) A CMA or a BPO is an example of ______.
969) While market value is an opinion of a property’s worth on the fair market, which of the following best describes market price?
970) Which of these appraiser requirements does AIR NOT specify?
971) What’s the price at which a willing buyer and a willing seller would strike a deal given normal market conditions?
972) Jerry is appraising a five-bedroom home in the suburbs. After identifying the purpose of the appraisal, what does he need to do next?
973) Which of these transactions must comply with Appraiser Independence Requirements?
974) Which of the following actions toward an appraiser would be considered proper?
975) Which of the following occurs when the property is damaged or just has normal wear and tear?
976) What is an appraisal?
977) Which of the following provides the lender with an accurate opinion of a property’s market value?
978) What is the purpose behind Appraiser Independence Requirements?
979) Which statement best describes the most common approach used to reconcile the three appraisal approaches?
980) What standards do appraisers follow?
981) Appraiser John is determining how a property is being used to determine a more optimal function. What is he determining?
982) Which property is Bertrand appraising if he’s using the income approach?
983) Where can a party reviewing a title commitment find requirements that must be met before a title insurance policy will be issued?
984) What information does Schedule B-2 of an ALTA title commitment provide?
985) What information does Schedule A of an ALTA title commitment provide?
986) The title is acceptable, and Kathy’s attorney Amy has provided a certificate of title opinion. Which of the following will be issued?
987) Rhonda is purchasing a house from the Brookses. She has obtained financing, and her lender requires her to have title insurance. The company she selects conducts a title search. Why?
988) Janice is selling her five-bedroom, three-bath home. She has a marketable title. What does that mean?
989) Buyer Sally is hoping to buy the Sandersons’ condo. During a title search, a cloud on the title is discovered. What might happen to the transaction?
990) Sally, Larry’s appraiser, has provided her with a title commitment and indicated there’s a problem with the title. Where can Larry find the requirements that must be met before a title insurance policy will be issued?
991) The appraiser of Garran’s property used the Torrens system to perform a title search. Now a claim has been filed. Who or which entity will be the title guarantor?
992) Martha and Ben are selling their home to Linda. They’ve purchased title insurance for obtaining insurance of good title. Whom does the title insurance protect?
993) Which one of the following assumptions does the Torrens system make?
994) When the Torrens system is used to perform a title search, who or what entity acts as title guarantor in case a claim is filed?
995) A quitclaim deed does which one of the following?
996) What may happen to a transaction if a cloud on the title is discovered?
997) What is the Torrens system?
998) Jacob has received a call from his lender that there is a problem with the title on his property. Why would he want to file suit to quiet title?
999) Mario lives in a state that requires an abstract of title for property conveyance. The chain of title is broken approximately 50 years prior to the current date. Which of these properly identifies the status of Mario’s title?
1000) Which of the following best describes a marketable title?
1001) If a cloud on a title is discovered, which party is generally responsible for clearing the cloud?
1002) Margot is hoping to buy the Bransons’ farm. However, lender Susan informs her that a cloud has been discovered on the Bransons’ title. Who is usually responsible for clearing the cloud?
1003) Where can a party that’s reviewing a title commitment find exceptions that aren’t covered by the title insurance policy?
1004) Which one of the following statements about the Torrens system is true?
1005) Which commitment section matches the schedule to its description and provides information related to the transaction, including legal description and parties?
1006) Sarah is selling her home and must provide proof of ownership. She’s received an abstract of title. Which of the following statements is NOT correct?
1007) Which document is used to establish the path and proof of ownership?
1008) After purchasing a property, what can Jeremiah do to clear a possible future claim on the property’s title?
1009) Which section of a commitment identifies exceptions to title insurance coverage?
1010) A lender wants to ensure that the legal description of a property is accurate, and determine whether any improvements, encroachments, or lot size changes have been made. What may the lender request to determine this?
1011) What information does Schedule B-1 of an ALTA title commitment provide?
1012) Janie’s a lender at Super National Bank. She’s working with the Downings to perform a title search. Why did she also request a property survey?
1013) Which of the following is NOT an accurate statement regarding the title?
1014) Which of the following provides a summary of the title history?
1015) Lender Sonya wants to make sure the legal description of the Jacobsons’ property is accurate. She feels it’s essential to determine whether any lot size changes have been made. What might Sonya request to determine this?
1016) Where can a party reviewing a title commitment find basic details about the transaction?
1017) Which of the following will be issued only if title is acceptable and an attorney provides a certificate of title opinion?
1018) Rachael is purchasing a house from the Browns. After obtaining financing, what does her lender require her to have for her own protection?
1019) Monica is selling her house. Her appraiser, Tom, is using a title search method that only looks back as far as when the last title search was performed. The method he’s using assumes the last search was done accurately and legally, and that any issues were resolved. Which method is Tom using?
1020) Which party pays for the appraisal in a financed real estate transaction?
1021) Landon will pay interest over the life of his 30-year loan. What other responsibility does he have to lender Marco when he finances his loan?
1022) A lender requires a title search to finance a transaction. Who pays for this search?
1023) Who is responsible for paying the underwriting fee in a financed real estate transaction?
1024) Jonathon is selling his home to Chris and Samantha. He’s at closing, and the underwriting fee must be paid. Who pays for that?
1025) Who is responsible for paying the loan origination fee in a financed real estate transaction?
1026) What is the purpose of the Loan Estimate?
1027) Who is responsible for paying the loan-related closing costs in a financed real estate transaction?
1028) By when must a borrower be provided with a closing disclosure?
1029) Who must provide the buyer and seller with a copy of the closing disclosure?
1030) Paulina is buying her first house. Which of these costs will she NOT be expected to pay?
1031) Two days before closing, Barb reviews her final loan terms and closing costs. She must bring $100,000 to the closing. What document is she reviewing?
1032) Kate is looking over the document that provides the approximate loan-related costs, along with the loan’s terms. What is Kate reviewing?
1033) What is the purpose of the loan transfer disclosure?
1034) Besides interest paid over the life of the loan, what responsibility does the buyer have to the lender in a real estate transaction that requires financing?
1035) Philomena and Barbara are the buyer and seller in a real estate transaction. By when must the closing disclosure be provided to them?
1036) Patty is buying a three-bedroom mountain home. After applying for a loan, she received the Loan Estimate at least _______ business days after submitting the loan application.
1037) Mary is a licensed real estate professional. She only performs licensed real estate activities and does not receive any compensation from lenders, mortgage brokers, or other mortgage-related parties. Does she need an MLO endorsement?
1038) Seth is purchasing a vacant piece of land, on which he’ll build a new single-family home for his growing family. His real estate agent, Dani, is authorized to assist him with the loan he uses to buy the property because Dani has her MLO endorsement and this is a ______ loan.
1039) California real estate licensee Carmen has an MLO endorsement on her license. Which of these actions is she required to take?
1040) A loan that will be used for personal, family, or household purposes and is secured by a mortgage, deed of trust, or equivalent instrument to residential real property is called a(n) ______.
1041) Taylor Bank and Trust is a Federal Reserve Member bank. It has several employees who act as mortgage loan originators. With which entity do these employees need to register?
1042) Any person acting as a mortgage loan originator must register with the ______.
1043) Loans to purchase a residential property, refinance an existing residential real property loan, or a home equity line of credit are considered ______.
1044) In relation to the work of an MLO, which of the following is an example of a residential mortgage loan?
1045) Samantha is an assistant to Matt, a real estate licensee with an MLO endorsement. She performs administrative tasks on his behalf. Does she need an MLO endorsement?
1046) Erica is a California real estate licensee with an MLO endorsement. Which of the following properties falls under the definition of ‘dwelling’ and would therefore allow her to act as an MLO in a transaction?
1047) What is the name of the federal act that sets requirements for mortgage loan originators (MLOs)?
1048) Which of these individuals will have a unique identification number in the Nationwide Mortgage Licensing System and Registry?
1049) Jansen is a real estate licensee with a mortgage loan originator endorsement. He’s representing the seller as their real estate agent, and the buyer as a mortgage loan originator in the same transaction, without the permission of either party. What is this an example of?
1050) What is the maximum penalty a licensee can be assessed for MLO-related violations?
1051) Jackson holds a real estate broker license with an MLO endorsement. How many hours of continuing education must he complete each year to renew this endorsement?
1052) To qualify for a mortgage loan originator endorsement, applicants must meet examination, fingerprint, credit report, and ______ requirements.
1053) Which of the following is an MLO violation?
1054) Scott is an MLO. Arthur, his assistant, does not have an MLO endorsement. Which of these activities must be performed by Scott?
1055) MLO applicants give permission for a credit report to be pulled so the NMLS can evaluate whether the applicant demonstrates ______.
1056) To qualify for a mortgage loan originator endorsement, applicants must meet education, examination, credit report, and ______ requirements.
1057) One of these actions is considered an MLO activity. Which one?
1058) Maura is a real estate salesperson who does not have an MLO endorsement. Which of these actions can she perform for her client, who is financing the purchase of a single-family home?
1059) Jackson holds a real estate broker license with an MLO endorsement. How often must he renew his MLO endorsement?
1060) To qualify for a mortgage loan originator endorsement, applicants must meet education, examination, fingerprint, and ______ requirements.
1061) How many hours of continuing education must real estate licensees complete each year to renew their MLO endorsement?
1062) Three months ago, Jamie started performing MLO activities, but she has yet to obtain an MLO endorsement. How much will she be penalized?
1063) Which of these actions is an MLO violation?
1064) How long is an MLO endorsement valid?
1065) To qualify for a mortgage loan originator endorsement, applicants must meet education, fingerprint, credit report, and _____ requirements.
1066) Jackson holds a real estate broker license with an MLO endorsement. When he renews his MLO endorsement, what does he need to submit to the NMLS?
1067) With this alternative to foreclosure, a borrower hands over the property to the lender rather than face foreclosure proceedings.
1068) ______ is when the outstanding loan balance is reconfigured. It is a form of loan modification.
1069) Rather than be foreclosed on, Jarod turned his deed over to his bank. This is called a ______.
1070) Declan has a mortgage on his property, but allows the property to fall into disrepair. Which of these is a possible consequence of this action?
1071) Arnold has gotten behind on his mortgage payments. His lender agrees to temporarily suspend payments to help Arnold catch up. What is this an example of?
1072) Which term describes a lender temporarily agreeing to suspend payments to help the borrower get caught up?
1073) Two examples of loan adjustments or modifications are moratorium and ______.
1074) When borrowers fail to pay property taxes, allow their property to go into disrepair, or ______, they could face loan default.
1075) Ray is in a bit of a predicament. He owes more on his mortgage than his property is worth, but can no longer afford the payments. He receives permission from his lender to sell the property for less than what he owes. What is this an example of?
1076) ______ is a legal action that liquidates or restructures debt. It can have a long-lasting negative impact on the borrower’s ability to obtain financing.
1077) Kristoff got a bit behind on his mortgage and missed several payments. He and his lender devised a schedule that gives Kristoff an opportunity to make up those delinquent payments. What is this an example of?
1078) Two examples of loan adjustments or modifications are recasting and ______.
1079) Armitage Bank is placing the Kellermans in default for failure to pay their homeowners insurance. The lender is concerned about property damage and ______.
1080) How can liens, such as those created by non-payment of federal income tax, result in mortgage default?
1081) Alternatives to foreclosure include deed in lieu of foreclosure, short sale, or ______.
1082) What happens when a loan forbearance is granted?
1083) Jackie is 10 days late on her loan payment. Will her lender likely place her loan in default?
1084) One alternative to foreclosure is a voluntary conveyance of ______.
1085) When borrowers miss scheduled mortgage payments, fail to pay property taxes, or ______, they could face loan default.
1086) Which of the following best describes the California short sale addendum?
1087) Jasmine has a mortgage on her property, but allows her homeowner’s insurance to lapse. Which of these is a possible consequence of this action?
1088) Two areas of vulnerability for the lender occur when homeowners insurance is allowed to lapse. What are they?
1089) What is a moratorium (or forbearance)?
1090) Rather than face foreclosure, Tony decides to cut his losses. He voluntarily conveys his property to his lender. What type of foreclosure alternative is this?
1091) Which of the following is a potential ramification for the seller if a short sale is completed?
1092) Which of the following can a lender do if a borrower fails to keep homeowner’s insurance on the collateral property?
1093) With this alternative to foreclosure, borrowers receive permission from their lender to sell the property for less than the amount owed on the borrower’s mortgage.
1094) When borrowers miss scheduled mortgage payments, allow their property to go into disrepair, or ______, they could face loan default.
1095) Which of the following is a potential ramification to the seller if a short sale is completed?
1096) An example where a lender might place a property in default due to poor property management includes ______.
1097) For the vast majority of loans, a single late ______ does not automatically mean the loan has gone into default.
1098) A lapse in property insurance coverage can result in borrower default because it leaves the lender ______ should something happen to damage the property.
1099) Residential property owners don’t often default on property taxes. Why not?
1100) Which alternative to foreclosure is being utilized when a lender creates a schedule for the borrower to catch up on delinquent mortgage payments?
1101) Percy is losing his house because he can’t make his payments. He owes more than it’s worth and just wants to get out from under it. He decides to put it on the market and hope for the best. Percy will likely sell his home through ______.
1102) What’s the term for a loan modification in which the outstanding loan balance is reconfigured?
1103) A homeowner may go into default on a home loan due to ______.
1104) Which of the following could be a concern for a lender regarding property condition?
1105) How is title usually conveyed to the buyer during a foreclosure process?
1106) Which of the following best describes foreclosure by entry and possession?
1107) How can a foreclosure process be temporarily stalled?
1108) When a lender must seek the court’s permission to foreclose on a property used as collateral for a loan that is in default, what type of foreclosure process is likely being used?
1109) Which process temporarily stalls foreclosure?
1110) How are creditors or lien holders paid during a foreclosure process?
1111) Which term describes the legal regulation of a property to the detriment of the owner, and must include reimbursement for the property owner?
1112) How can a foreclosure be stopped or prevented?
1113) What happens after a lien foreclosure sale if not enough money were made from the auctioning of the property to pay off the lien holders?
1114) When a trustee begins foreclosure proceedings as permitted by the power-of-sale clause in the security instrument, and the action does not need to involve the court system, what type of foreclosure process is being used?
1115) How long does a homeowner have to pay off outstanding liens against his property?
1116) Robbie’s lender notified him of an impending foreclosure, and told Robbie that his property will be sold at public auction. After the auction occurred, he receives a notice of eviction for which the lender had to petition a court. What does this describe?
1117) What does the right of redemption allow?
1118) Lendright Home Loans asked a trustee to begin foreclosure proceedings as permitted by the power-of-sale clause in the security instrument. This action does not need to involve the courts. What type of foreclosure process is being used?
1119) Fairwell Lending must seek the court’s permission to foreclose on a property used as collateral for a loan that is in default. What type of foreclosure process is likely being used?
1120) Which of the following best describes the non-judicial foreclosure process?
1121) Which of the following statements best describes a foreclosure by advertisement?
1122) Which action can be taken if you don’t pay a lien against your property?
1123) Which of the following statements best describes the judicial foreclosure and sale process?
1124) Which of the following best describes foreclosure by writ of entry?
1125) As part of a deficiency judgment sought by a lender, a ______ may be placed on any current and future property the borrower owns until the lender recovers all losses.
1126) A mortgage that allows the lender to sue the borrower for damages if foreclosure occurs is called a ______ mortgage.
1127) Which of the following best describes a blanket lien?
1128) Chapo’s property was foreclosed on and he is facing a deficiency judgment so the lender can recover losses incurred from the foreclosure process. What type of lien may the lender levy against Chapo until the losses are paid?
1129) What is the purpose of the California Foreclosure Reduction Act?
1130) Siobhan has a mortgage with a clause that prohibits her lender from suing her for unpaid amounts if foreclosure occurs. This is called a ______ mortgage.
1131) Which of the following best describes a non-recourse mortgage?
1132) Which of the following best describes a recourse mortgage?
1133) A lender was not able to recover all of the losses incurred during the foreclosure process. What could it pursue to recoup these losses?
1134) What’s another name for California’s Foreclosure Reduction Act?
1135) Which of the following best describes the function of a deficiency judgment in the case of a foreclosure?
1136) A mortgage with a clause that prohibits the lender from suing the borrower for unpaid amounts if foreclosure occurs is called a ______ mortgage.
1137) Which of the following describes housing ratio?
1138) David is buying a home for $400,000 and financing 90% of it. If his lender charges a 1% loan origination fee, how much will the lender charge to originate the loan?
1139) What’s another term for back-end ratio?
1140) What’s a typical loan-to-value ratio for an FHA loan?
1141) A buyer anticipates a house payment of $1,000 per month, with monthly homeowner association fees of $150. The buyer also has a car payment of $400 per month. If the buyer earns a monthly gross income of $5,000, what’s the housing ratio?
1142) Margo is purchasing a home for $520,000. The property appraised at $550,000 and Margo is financing $416,000. What’s the loan-to-value ratio?
1143) What’s another term for front-end ratio?
1144) What is a loan origination fee?
1145) A calculation that describes the amount being borrowed compared to the value of a property is called ______ ratio.
1146) You’re working with a buyer who’s purchasing a home that appraised at $80,000. The buyer is obtaining a 90% loan, and the lender will charge a one-point origination fee at closing. How much will the loan origination fee be?
1147) Which of the following percentages is an allowable loan origination fee?
1148) Which calculation looks at all recurring (or installment) debt—such as monthly mortgage, car, credit, and loan payments—as a percentage of the borrower’s monthly gross income?
1149) Tina is purchasing a home that appraised for $10,000 more than the sales price. On which figure will the lender base the loan-to-value ratio?
1150) Glenn is purchasing a home for $400,000. The property appraised at $415,000 and Glenn is financing $300,000. What’s the loan-to-value ratio?
1151) Generally, what’s the common range for loan origination fees?
1152) What’s the name of the calculation that looks at a borrower’s monthly housing obligation—including principal, interest, taxes, and insurance, as well as any homeowners or condo association fees—as a percentage of their monthly gross income?
1153) A buyer is purchasing a property for $400,000. His lender’s loan-to-value ratio is 80%. How much is the buyer financing?
1154) A buyer is purchasing a home appraised at $480,000. The buyer is obtaining a 90% loan, and the lender will charge an origination fee of 1% at closing. How much will the loan origination fee be?
1155) A buyer is purchasing a property for $500,000. He has a down payment of $50,000 and is financing the rest. What’s the amount of the loan origination fee if the lender charges one-and-a-half points?
1156) A buyer is purchasing a property for $500,000. His lender’s loan-to-value ratio is 90%. How much is the buyer financing?
1157) A buyer anticipates a house payment of $1,000 per month, with monthly homeowner association fees of $150. The buyer also has a car payment of $400 per month. If the buyer earns a monthly gross income of $5,000, what is the total debt ratio?
1158) Which of the following describes total debt ratio?
1159) Jeffrey has accepted an offer of $310,000 for his house. The buyer is making a $50,000 down payment, and the buyer’s appraisal came in at $300,000. On what number will the buyer’s lender base the loan-to-value ratio?
1160) The housing ratio is the borrower’s monthly housing obligation as a percentage of what sort of income?
1161) A buyer is purchasing a property for $400,000. His loan-to-value ratio is 80%. The lender also charges a one-point loan origination fee. How much is the loan origination fee?
1162) Backyard Bank charges a 2% loan origination fee. Mavis is buying a home for $500,000 and financing $400,000 of it. How much will Mavis pay as a loan origination fee?
1163) Jane’s offer of $310,000 was accepted, but the appraisal just came in at $300,000. Jane plans to finance $250,000. What’s the loan-to-value ratio?
1164) Jacqueline found a ready, willing, and able buyer for her client’s condo, with a sales price of $20,000 more than the asking price. However, the appraisal came in just under the asking price. Which number will the lender use to calculate the loan-to-value ratio?
1165) Which of the following describes loan-to-value ratio?
1166) When calculating loan-to-value ratios, which of the following will be used by the lender?
1167) A buyer with a 15-year, $250,000 loan at a fixed 5.5% interest rate has a monthly principal and interest payment totaling $2,042.71. What is the total amount of interest the borrower will pay over the course of the loan?
1168) Which of the following describes amortization?
1169) A buyer with a $400,000 loan has a monthly principal and interest payment of $2,661.21. If $2,333.33 is interest, what is the new principal balance after the first payment is applied?
1170) A buyer with a $350,000 loan has a monthly principal and interest payment of $2,102.36. If $1,801.23 is interest, what’s the new principal balance after the first payment is applied?
1171) A buyer has a 30-year, $400,000 loan with a 7% interest rate. How much of the first month’s mortgage payment is interest?
1172) To find a factor on an amortization chart, you need to know the length of the loan and the ______.
1173) A buyer with a $750,000 loan has a monthly principal and interest payment of $4,376.80. If $3,593.75 is interest, what is the new principal balance after the first payment is applied?
1174) A buyer with a 20-year, $419,000 loan at a 4.25% interest rate has a monthly principal and interest payment totaling $2,594.59. If $1,483.95 is interest, how much is applied toward principal for that payment?
1175) A buyer with a 15-year, $250,000 loan at a 5.5% interest rate has a monthly principal and interest payment totaling $2,042.71. What’s the total amount the borrower will pay back over the life of the loan?
1176) A buyer has a 30-year, $750,000 loan with a 5.75% interest rate. How much of the first monthly payment is interest?
1177) A buyer with a $242,000 loan has a monthly principal and interest payment of $1,317.66. If $1,033.54 is interest, what’s the new principal balance after the first payment is applied?
1178) Paying off a loan over time is called ______.
1179) A buyer with a 15-year, $250,000 loan at a 5.5% interest rate has a monthly principal and interest payment totaling $2,042.71. How many payments will the borrower make over the course of the loan?
1180) A buyer with a 30-year, $400,000 loan at a 7% interest rate has a monthly principal and interest payment totaling $2,661.21. If $2,333.33 is interest, how much is applied to principal?
1181) A buyer with a 30-year, $750,000 loan at a 5.75% interest rate has a monthly principal and interest payment totaling $4,376.80. If $3,593.75 is interest, how much is applied to principal?
1182) A buyer obtained a 30-year, $205,000 loan with a 5.0% interest rate. How much of the monthly payment is interest?
1183) To find a factor on an amortization chart, you need to know the interest rate and the ______.
1184) When using an amortization chart, you use the interest rate and the loan term to arrive at a factor, such as 5.17808. Now what do you do?
1185) A borrower has a 30-year, $500,000 loan with an interest rate of 6.25%. His monthly principal and interest payment is $3,078.59. What’s the total amount of interest he’ll pay over the course of the loan?
1186) Ben is purchasing a home and reviewing a loan amortization chart. If the home price is $330,000 and he’s financing $300,000, once he finds the factor (number that intersects his interest rate and term on the amortization chart), what number does he multiply by that factor?
1187) A seller wants to break even after the broker’s commission of 5% and loan balance of $300,000 are paid. At what price must the house sell?
1188) Over how many years is a residential income-producing property depreciated?
1189) A property valued at $500,000 is returning a net annual income of $45,000. What is the cap rate for this investment?
1190) A property valued at $1 million is returning a net annual income of $85,000. What’s its cap rate?
1191) To calculate capitalization rate, you need to know the property’s value and ______.
1192) Over how many years is a commercial property depreciated?
1193) Why is 2.5 a better debt service ratio than 1.8?
1194) The gross income multiplier for an area is 12x. If the estimated annual rent is $10,000, what’s the property’s estimated value?
1195) A three-unit income-producing property has a sales price of $600,000. Monthly gross rent is estimated at $6,000. What’s the gross rent multiplier?
1196) What’s the definition of appreciation?
1197) A seller wants to net $10,000 after the broker’s commission of 6% and a loan balance of $250,000 are paid. For how much does the property need to sell?
1198) What is the current value of a property that was purchased two years ago for $260,000, assuming an annual appreciation rate of 2%?
1199) A decrease in property value over time is called ______.
1200) An increase in property value is called ______.
1201) You’re working with a seller whose home was valued at $100,000 a couple of years ago. Through some market research, you’ve discovered that this area is seeing an appreciation rate of about 2% per year. What is the value after three years?
1202) Cheryl bought her home three years ago for $217,000. Assuming her home appreciated at the 3% rate typical of her current market, how much is her home worth now?
1203) Yanni is an investor who has just purchased a building for $300,000. Similar buildings are returning a rate of 7%. What can Yanni anticipate his annual net operating income to be?
1204) A 30-unit income-producing property has a sales price of $9 million. Annual gross income is estimated at $750,000. What’s the gross income multiplier?
1205) Your seller wants to net $100,000 after the 5% commission is paid. Assuming no closing costs, at what price does the home need to sell for the seller to net this amount?
1206) What’s depreciation?
1207) Gary, your investor client, has an annual net income of $50,000. His annual debt service is $12,500. What is his debt coverage ratio?
1208) To arrive at annual debt service cost, divide ______ by the debt coverage ratio.
1209) Jason bought a home four years ago for $153,000. If his home appreciated at an annual rate of 3%, how much would his home be worth today (round to the nearest dollar)?
1210) Which of these statements best describes a purchase money mortgage?
1211) Which of the following is an aspect of government loans?
1212) Which entity insures government loans?
1213) The Hendersons don’t have enough money to make the full 20% down payment their institutional lender requires. To close the sale, the seller is willing to finance a loan for the amount between the home’s list price and what the institutional lender is willing to loan. What’s this type of financing called?
1214) What attracts borrowers to adjustable rate mortgages?
1215) Monica received a promotion at work that requires her to relocate. Because of the timing of her promotion, she’ll need to buy a new house in her new city before her current one is sold. So, she won’t have any equity from her current home to make a down payment on the new house. What loan option would allow her to make the purchase before selling the old house?
1216) Which type of loan is insured by the Federal Housing Administration?
1217) In which situation will sellers apply a portion of the rent toward the purchase price to entice the buyers to close more quickly?
1218) Which of these describes a bridge loan?
1219) When does PMI end?
1220) Connie and John Fink, a married couple ages 69 and 72 respectively, want to stay in their home. The type of mortgage they’re considering will allow the lender to make payments to the Finks for a certain period of time, while the lender gains corresponding ownership. Which type of mortgage are they considering?
1221) Which of the following is a potential disadvantage for a buyer who enters into a lease with an option to buy contract?
1222) Which of the following describes a wrap-around mortgage?
1223) Margaret isn’t ready to buy Jill’s property, but she pays Jill a fee that guarantees she’ll be notified if another buyer appears. If another buyer does make an offer, Margaret has the opportunity to purchase at the price and terms of the offer. Margaret has a(n) ______ on Jill’s property.
1224) Sue and Jim are hoping to expand their family, which means moving to a larger home. They’re closing on their new home soon, but haven’t yet sold their current one. Which type of loan will help them afford both homes for a short period of time?
1225) Which statement is true regarding most government loans?
1226) A ______ is often used in commercial applications when two or more properties are pledged as security for repayment of the loan.
1227) Which definition best describes a package mortgage?
1228) Janice is extremely excited to have purchased her first home. She was able to lock in her monthly payment at a very low rate for the first five years. In year six, Janice’s payments will become significantly larger based on the going market rates. What type of loan does Janice have?
1229) In the lending world, what does RAM stand for?
1230) Which of the following best describes a home equity line of credit?
1231) When is private mortgage insurance typically required on a conventional loan?
1232) Which of the following is true of construction loans?
1233) With which type of mortgage does the interest rate vary according to a specified index?
1234) What type of interest rate might a HELOC have?
1235) A loan with lower payments in the early years that increase gradually until they are sufficient to amortize the loan fully is a(n) ______ mortgage.
1236) What type of loan is given based on the amount of equity a borrower has in the home?
1237) Joe’s applying for a mortgage that meets all of the Fannie Mae/Freddie Mac criteria. Based on this, how would we classify this loan?
1238) A loan with borrow options that can be long term with periodic adjustments or short term with more frequent adjustments to the rate is a(n) ______ mortgage.
1239) With this type of loan, personal property is included with the real property in the sale. It’s commonly seen in commercial real estate, but you may also see this in the sale of furnished condominiums.
1240) What is a wrap-around mortgage?
1241) Which type of loan is commonly used for the purpose of building improvements?
1242) Tom, the seller, is helping the buyer with financing. Tom will give this mortgage to the buyer, and the money will go toward the down payment. What kind of mortgage is this?
1243) Which statement describes a conforming loan?
1244) What definition best describes a construction mortgage?
1245) Which statement is true about a construction mortgage?
1246) Which statement best describes a reverse annuity mortgage?
1247) Which type of mortgage has an interest rate that remains constant over the life of the loan?
1248) A lender is preparing to begin foreclosure proceedings. Rather than go through this proceeding, the borrower decided to turn over the deed to the property. What is this called?
1249) A foreclosure consultant was found guilty of violating the Mortgage Foreclosure Consultant Law. As a result, the consultant could face fines up to $10,000, up to ______, or both.
1250) Which of the following types of loans issued in California may be protected from a deficiency judgment?
1251) What’s a deficiency judgment?
1252) What is it called when the borrower and lender work together to restructure the terms of a home loan?
1253) A foreclosure consultant was found guilty of violating the Mortgage Foreclosure Consultant Law. As a result, the consultant could face up to one year in prison, ______, or both.
1254) Which method of foreclosure does not involve the court, but includes a trustee’s sale?
1255) A lender is pursuing a deficiency judgment against a borrower in California. Which foreclosure process is being used?
1256) The ______ defines individuals who perform certain foreclosure-related activities for compensation for borrowers.
1257) What is a deed in lieu of foreclosure?
1258) This is a legal process borrowers may go through to either discharge or restructure all of their debt.
1259) Which method of foreclosure involves the court and a sheriff’s sale?
1260) This foreclosure process must be used when the security instrument doesn’t contain a power of sale clause.
1261) Which of the following is an alternative to foreclosure?
1262) A homeowner is behind on his mortgage. He’s decided to try to sell the property and is working with his lender to do so. He owes $315,000 on his loan balance and closing costs. He has an offer for $300,000, which the lender approves. What is this an example of?
1263) What is it called when borrowers pay back all of the amounts owed and become current (no longer in default) on their loan?
1264) A judicial foreclosure process is used when the security instrument does not contain which clause?
1265) A borrower sued a foreclosure consultant for violating the Mortgage Foreclosure Consultant Law. The borrower may receive actual damages, legal fees, and, in severe cases ______.
1266) What is a short sale?
1267) In a judicial foreclosure, how long does the borrower’s redemption period last if a deficiency judgment isn’t being sought?
1268) In a judicial foreclosure, if a deficiency judgment won’t be sought, how soon after the Notice of Levy is recorded can the Notice of Sale be issued?
1269) Recording of this item officially begins the non-judicial foreclosure process.
1270) How soon after the Notice of Default is filed can a trustee’s sale occur?
1271) What is the minimum amount of time a Notice of Sale must be posted on a property before the foreclosure sale can take place?
1272) A Notice of Default has been filed to begin the non-judicial foreclosure process. How soon can the Notice of Sale be issued?
1273) In a judicial foreclosure, if the sheriff’s sale wasn’t enough to pay off the borrower’s debt plus foreclosure costs, how long does the borrower’s redemption period last?
1274) In the non-judicial foreclosure process, when does a borrower’s reinstatement period begin and end?
1275) In a judicial foreclosure, if a deficiency judgment will be sought, how soon after the Notice of Levy is recorded can the Notice of Sale be issued?
1276) Which of the following activities must occur before a trustee can begin a non-judicial foreclosure?
1277) A trustee’s sale has just occurred. What does the highest bidder receive?
1278) In a judicial foreclosure, if the sheriff’s sale was enough to pay off the borrower’s debt plus foreclosure costs, how long does the borrower’s redemption period last?
1279) How should you analyze data obtained from tracking your personal spending?
1280) When you develop your financial plan, you should start by ______.
1281) Amos is a new licensee who has just earned his first commission check. What should he do with it?
1282) Dylan has to choose between spending money on a new guitar or on a dishwasher to replace the one that recently died. What would be an appropriate choice?
1283) Which of the following is a required part of a sound plan for your personal finances?
1284) Renee loves her photography hobby. When she is planning her personal budget, she finds that her anticipated income will just meet her necessary expenses, with a little left over if she’s lucky. She still plans on budgeting some money for her hobby, though. Why?
1285) Why should licensees maintain a business account separately from any personal accounts?
1286) Which of these is an essential component of a sound plan for your personal finances?
1287) Veronica is an independent contractor, so in addition to setting aside money for an emergency fund in case there is a lapse in her income, she knows that she must save money to pay for ______.
1288) Which of these is an advantage to maintaining business and personal accounts separately?
1289) Victor has analyzed his spending habits and sees some trends that he’d like to change. Which of the following will help him reap the benefit of his work at analyzing his habits?
1290) Which of these are essential elements of a personal financial responsibility?
1291) A goal written according to the SMART criteria is ______.
1292) Myra has been offered a good deal on a new car, but it means adding another $200 to her monthly expenses. Her current car is boring, but it runs well. How can she decide if she should buy the new car?
1293) Fran has a decent income, but she feels that it’s mostly spent on unimportant things, leaving her with nothing at the end of the month. Why is identifying her personal values a good first step to help her manage her money?
1294) Elijah has identified his personal values, estimated his income, and analyzed his current expenses. With this information, he’s ready to ______.
1295) Which of these is an essential rule for a licensee’s finances?
1296) Rick has decided to create a personal financial plan. What’s a good first step?
1297) Which of the following is a requirement if you set up a corporation in order to perform real estate services?
1298) Before you can create a budget for your personal finances, you should ______.
1299) Ned loves to buy his girlfriend, Nancy, presents. But when he tracks his spending, he finds that he spends more than he can afford on presents. How should he act as a result of this data analysis of his spending habits?
1300) An important component of any financial plan is ______.
1301) George has a lot of outstanding debt on three different credit cards. As he considers his financial goals, what should be at the top of his list?
1302) A system for managing your money when income is unreliable allocates ______ to each expense or savings goal.
1303) How long should you track your spending in order to analyze your spending habits?
1304) Analyzing spending habits allows you to evaluate the impact of a purchase in terms of ______.
1305) In order to analyze your spending habits, you should track ______.
1306) Everyone can benefit from following a personal financial plan. Why is this especially important for the independent contractor?
1307) The purpose of evaluating spending habits is ______.
1308) Before you can create a budget for your personal finances, you should ______.
1309) Mary has created her budget and defined her financial goals. What’s her next step in developing her financial plan?
1310) Mary Frances is on her way home from work and stops at the grocery store. The business account she opened recently gave her an ATM card to go with it. Should she use the card to buy groceries?
1311) Nancy is evaluating her spending habits. She wants more money to spend on making her private detective business successful. She finds that she spends a lot of money on repairing her car, which she uses all of the time when solving mysteries. She also spends a lot on toys for her beloved dog, Togo. What’s the best way for Nancy to use this data to support her values?
1312) Laura is considering her personal financial goals. Which of these should be first on her list?
1313) Which of these would be considered a fixed, essential expense?
1314) You’re estimating your annual income and find that the average sale price of a home in the area you’ll be working is $300,000. You determine your expected commission is 2%, and you plan to make six transactions in the year. Assume there is no broker’s split. What will your estimated income for the year be?
1315) Which of the following is an example of a variable expense?
1316) You average one client from every seven leads, and each client represents 80% of a closed transaction. Each transaction you close has an average dollar value of $9,000. How much can you expect to earn from every seven leads?
1317) Natasha is a new licensee who needs to estimate her business expenses. Which of these is a recommended way for Natasha to do this?
1318) Approximately how much does a typical licensee pay each month in ongoing business expenses?
1319) Which of these items should you expect to include when calculating your start-up costs as a licensee?
1320) Marion has been a licensee for four years and earns a relatively steady income. Which of the following is a good way for Marion to estimate her monthly business expenses?
1321) Chad had some major medical expenses that he didn’t plan for, and he wants to slash his budget in order to pay off the debt quickly. He considers selling his home and renting an apartment, which will make a big difference in his _________ expenses.
1322) Linda is estimating her annual income. She expects that her commission will be 2.5%, and she plans to close at least seven transactions in the year. What else does she need to complete her estimate?
1323) Brianna is a new licensee who spent $480 on her business to get started. How does this compare to the typical licensee’s start-up costs?
1324) Dennis is a new licensee who’s estimating his annual gross income for his first year. He plans to close at least five transactions that year, and he’s researched average home prices in the area where he’ll be working. Dennis finds that the average sale price is $280,000. What other data point does he need to complete his estimate?
1325) Luis is estimating his annual income. He researches and finds the average sale price of homes in the area where he’ll be working. He expects his commission to be 3%. What other data point does he need to estimate his annual income?
1326) Sasha wants to ensure a successful start to her real estate business, so she includes ___________ when calculating her start-up costs.
1327) Carl is trying to trim his expenses, so he first looks at cutting some of his _________ costs in his budget.
1328) You’re researching information to estimate annual income and find that the average sales price of a home in the area you’ll be working is $400,000. Your expected commission is 2.5%, your broker takes a 50% split, and you plan to make six transactions in the year. What will your estimated income for the year be?
1329) The number of ______ you put into a funnel will determine the amount of income you can make.
1330) The average commission you earn from each transaction is $6,000, and 20% of your leads turn into clients. Using the funnel, what else do you need to know to calculate how many leads you will need if you want to earn $50,000 in a year?
1331) You average one client from every 10 leads, and each client represents 85% of a closed transaction. Each transaction you close has an average dollar value of $6,000. Using the funnel, how much can you expect to earn from every 10 leads?
1332) Katrina wants to find a way to curb her spending. She has decided to take a look at her variable expenses. Which of the following is a variable expense?
1333) Rick finds that some of his ongoing expenses as a licensee are paid monthly, some quarterly, and some annually. How can he arrive at a standard monthly figure that will help him manage his cash flow?
1334) Which of these would be considered a variable, essential expense?
1335) Jack is eager to start his career as a licensee, and one of the expenses he includes in his calculation of start-up fees is the ____________ fee.
1336) Melissa is a new licensee. Which of these items will be among the expenses she will incur as she begins her business?
1337) In relation to the funnel system, which of the following helps determine the amount of income you can make?
1338) Which of the following ongoing fees would a licensee expect to pay on a quarterly basis?
1339) You want to make $50,000 in a year from your real estate business. You know that about 15% of the leads you get turn into clients. You earn an average of $8,000 on every closed transaction. Is this everything you need to know to use a funnel to determine how many leads you need to generate to get your $50,000?
1340) Which of these is an optional ongoing expense for a licensee?
1341) Which of these is a required component of a successful system for your personal finances?
1342) Which of these is a recommended way to begin paying off the outstanding balances on multiple credit cards?
1343) Carla is a licensee who manages her money with a personal financial plan. When she receives two large commission checks in a row, her personal checking account is holding three months’ worth of living expenses. What should she do?
1344) Kathy has some unexpected expenses when she breaks her leg skiing. Which of the accounts in her personal finance system is designed to help her pay bills while she is recovering and unable to work at her usual pace?
1345) You and your financial system will communicate through ______.
1346) The ______ account is a recommended component of a personal financial plan that should be started as early as possible and contributed to throughout your working life.
1347) The percentage recommended for a licensee to allocate when building an emergency fund is ______.
1348) Izzy wants to know how much of her income to allocate to her income tax savings account. What should Izzy do?
1349) Which of these financial tasks should be planned on a quarterly basis?
1350) When using a financial system, what activities should you complete on a weekly basis?
1351) As part of a good financial plan, a business checking account is ______.
1352) If Mitch uses a financial system that allocates a percentage of income to his expenses and financial goals, how much will his retirement fund receive from a commission check of $8,000?
1353) The ______ account is an essential part of a financial plan for independent contractors, who should expect to disburse from this account on a quarterly basis.
1354) Business expenses, personal expenses, and financial goals can all be tracked easily when you ______.
1355) What’s the advantage of using separate savings accounts for each financial goal?
1356) Why do some financial experts recommend that those with outstanding debt on several credit cards pay off the card with the lowest balance first, regardless of interest rate?
1357) Which of the following is the best investment for a licensee?
1358) Lucy uses a personal financial plan recommended for licensees. When she receives a commission check, she deposits it in her business checking account. She should now transfer anything not required for business expenses to her ______.
1359) The purpose of a living expenses savings account is ______.
1360) How much should the emergency fund hold, according to the recommendation for creating a responsible financial plan for personal finances?
1361) Brandi is determined to pay off her outstanding credit card debt. She has four credit cards with outstanding balances: Card 1 has $1,500 dollars on it and a 12% rate, Card 2 has $2,000 on it and an 8% rate, Card 3 has $800 on it and a 15% rate, and Card 4 has $330 dollars on it and a 22% rate. Which one should she pay off first?
1362) Why are real estate licensees encouraged to use a personal financial plan that allocates a percentage of income to expenses and savings goals?
1363) Which of these is an appropriate use of a credit card?
1364) When using a financial system, which activity should you complete on a daily basis?
1365) Carla is a licensee who uses a personal financial system that recommends that all of her commission checks be deposited into her ______ account.
1366) The planned transfer of money from your business checking account to your personal checking account to your savings accounts is called ______.
1367) Don uses one hour each week to perform certain tasks, including ______, as part of his personal financial system.
1368) Licensee Lynn has several accounts set up as part of her personal financial plan to help her manage cash flow. She’s allocated 10% of each commission check to business expenses, 15% to taxes, 8% to her retirement fund, 12% to various savings goals, and the rest goes to her living expenses. When she receives a check, how does she direct the funds?
1369) Stacy is opening three savings accounts as part of her personal financial plan. What would be a recommended option for finding low fees and higher interest rates?
1370) What time of year is recommended for performing an annual review of your personal financial plan?
1371) When using a personal finance system with multiple bank accounts, which account should be electronically linked to all of your other accounts?
1372) Jim is a licensee who has formed a corporation in which he will pay individual income tax on both his personal income and the business profits. What type of entity did he form?
1373) Why are self-employed individuals required to pay estimated income taxes?
1374) Which of the following should be retained for tax purposes?
1375) What is meant by pass-through taxation?
1376) Brenda’s go-to financial expert, Cliff, has no fiduciary responsibility to her. Why is this true?
1377) As independent contractors, licensees may form a(n) ______ to protect personal assets.
1378) You do a listing presentation to a potential client over lunch at a nice restaurant. How much of your meal cost is considered tax deductible?
1379) Kris is a self-employed individual getting ready to pay his quarterly estimated taxes. How should he come up with his estimated payment?
1380) Which of the following would be the most common form of business structure for a new licensee?
1381) Sharon needs to know which mutual funds make the most sense for her financial situation. Which professional could offer the most expertise in this area?
1382) Mavis uses an extra bedroom in her home as her office. Can she claim this as a deduction?
1383) Ramon is an independent contractor who is being sued by a client. Luckily, because of the business structure he formed, his personal assets aren’t at risk. Ramon likely has a(n) ______.
1384) Sherman is required to file quarterly estimated taxes. Why might this be?
1385) In the event of a client lawsuit against an independent contractor who’s operating under an LLC, only ______ are usually at risk.
1386) Who would be the best professional to assist with your complicated tax return?
1387) Which of the following is a true statement about business tax deductions?
1388) Which of the following would be a receipt you should save for tax purposes?
1389) Bill makes sure to say “real estate, real estate, real estate” when he takes his friends to lunch. “We discussed real estate,” he says. “Now I can write the meal off on my taxes.” Is this true?
1390) Why might you seek the help of a tax attorney rather than a CPA?
1391) ______ taxation means that the business income passes through to the business owner’s individual tax return rather than being taxed as a separate entity.
1392) Jamie is an independent contractor licensee. Her business structure puts both her personal assets and business assets at risk. What type of business structure does Jamie likely have?
1393) Riker, a real estate licensee and sole owner of his business, has a business entity in which he pays self-employment tax on all of the income from the business. Which business structure did he form?
1394) Brenda is a new licensee working as an independent contractor for ABC Realty. Who’s responsible for making Brenda’s quarterly estimated tax payments?
1395) Your business is booming, and you’d really like someone else to maintain your financial records. Which of the following is the best person for this role?
1396) Marty is an independent contractor. Who or what entity contributes the employer portion of his Medicare and Social Security payments?
1397) You attend a business-related conference that includes an overnight stay away from home. Can you deduct the cost of your meals during the conference?
1398) How many times per year do self-employed individuals file taxes?
1399) Which of the following is a legitimate business deduction that you, as a real estate licensee, could claim on your income tax return?
1400) Jennifer drives her car for business purposes as well as for personal errands. She records every mile she drives, regardless of the purpose. Is any of the mileage on the car eligible for a deduction on her income tax return?
1401) Why must independent contractors pay self-employment tax?
1402) Which of these business structures offers personal liability protection in the event of a lawsuit against the licensee’s business?
1403) How often must self-employed individuals pay estimated taxes?
1404) Who distributes the trust assets of a person who died?
1405) Assets from the estate of which individual avoid probate at that individual’s passing?
1406) Harvey had a living trust, but when he died, some of his assets had to go through probate. What is the likely reason?
1407) Which of the following is a true statement about an IRA?
1408) With a ______, no probate is required for assets named within it.
1409) If someone dies without a will and has no next of kin, what happens to the deceased person’s assets?
1410) With this IRA, withdrawals of contributions are tax-free.
1411) Karen has saved $30,000 of her $40,000 goal for a down payment on a house. Why is it unwise to keep all of that money in a traditional savings account?
1412) Which of the following is a typical benefit of a retirement account?
1413) How much should you keep in your tax savings account in order to be prepared to pay your quarterly estimated tax?
1414) What is one disadvantage of a will over a trust?
1415) Which of the following would be the best place to keep monies intended for long-term savings?
1416) When should a licensee begin setting money aside for quarterly estimates?
1417) Dennis wanted to leave his surfboard to his niece when he died, but he didn’t want her to miss a single minute of wave action while his estate was held up in probate. Dennis needs ______.
1418) Which of the following is a true statement about retirement accounts?
1419) What primary benefit does a living trust have over a will?
1420) Maurice always keeps twice what he’ll need to pay his quarterly taxes in his tax savings account. This is ______.
1421) Contributions for this type of IRA aren’t tax-deferred.
1422) In which of the following situations is a catastrophic health insurance plan the most reasonable choice?
1423) Dana typically drives clients to and from showings. Which of the following types of insurance provides the best coverage while transporting clients?
1424) Nicole is a young licensee just starting her business and doesn’t have any income yet. She decides to purchase insurance as soon as she has the money. Which of the following can she likely skip for now?
1425) Laura is a newly licensed real estate professional. Which of these combinations of insurance does the law and her career choice make it essential that she carry?
1426) When Susan opened her new office, her very first client made demands for services that Susan wasn’t fully knowledgeable about, and she made a few mistakes. Let’s hope she has this type of insurance.
1427) Why is it a good idea for real estate licensees to carry auto insurance?
1428) If your client’s attorney contacts you, saying you were negligent in providing your client with service, which insurance coverage do you desperately hope you have?
1429) When shopping for health insurance, which of the following criteria can you likely discount as less important than the others?
1430) Mark, a real estate licensee, is having trouble reading the small print on the MLS listings. What type of insurance would help him find a resolution to this problem?
1431) Dan is being sued by a former client who feels that Dan didn’t provide him with adequate service. Which of the following insurance coverage will Dan need?
1432) If Jeff is healthy and always has excellent check-ups, which of the following would likely be the most important factor in his insurance selection?
1433) Shannon is a new licensee not making much money. She considers dropping insurance to cut her expenses. Which insurance could she drop without too much risk?
1434) Why are vision and life insurance optional for real estate licensees to purchase?
1435) If you have a specific health issue, which of the following is most critical for you to thoroughly investigate when selecting health insurance?
1436) Ronald marries and wants to start a family. Which of the following would be important in his selection of an insurance carrier?
1437) Which of the following real estate transactions is subject to recaptured depreciation?
1438) Marcie bought a duplex, lived in one half, and rented out the other half. This is an example of what type of investing?
1439) Which of the following is an option that might allow a licensee without much work history or very many assets to finance a real estate investment?
1440) Which of the below options most accurately describes an active real estate investment?
1441) Which of the following taxes apply while an investor holds an investment property?
1442) Someone with great carpentry skills pairs up with someone with working capital to purchase an investment property. This is known as ______.
1443) When an investment property is sold, three taxes that apply are transfer tax, capital gains and ______.
1444) When do capital gains tax, recaptured depreciation, and transfer taxes apply?
1445) A real estate investor purchased a three-bedroom home at below market price. She then spent $20,000 on improvements and renovations before selling the home at a profit. What type of investment is this an example of?
1446) Which of the following statements is true about active real estate investments?
1447) Which of the following is a passive type of real estate investment?
1448) You don’t qualify for financing, but are able to invest in real estate because your role as a licensee is helpful in this type of investment strategy.
1449) Randolph is a real estate licensee whose fluctuating income wouldn’t qualify him for conventional financing. However, he’s able to get financing on a 10-plex. How is this possible?
1450) Tina just sold her investment property. She’ll have to pay a transfer tax as well as recapture her depreciation. What other tax will apply?
1451) Jasmine wants to buy a duplex where the mortgage is $300,000. Her income only qualifies her for a $200,000 loan, and she doesn’t have enough saved to make up the difference. What factor might allow her to obtain financing anyway?
1452) Shelly’s real estate investment strategy is to look for smaller multi-family properties, fix them up, and rent them out. Her investment strategy most closely matches which of the following?
1453) Which of the following is a risk most associated with wholesaling as a real estate investment strategy?
1454) Bob just sold his investment property. Which taxes will apply?
1455) Allen picked up remodeling skills from his family’s construction business. Which of the following real estate investments is most suited to these skills?
1456) Which of the following describes a “buy and hold” investment strategy?
1457) Which of the following types of real estate investments is NOT an active investment?
1458) What is a seller carry back?
1459) With what type of loan do the principal and interest payments remain the same for the life of the loan?
1460) Which of the following best describes the state of the market during the over-supply phase of the real estate cycle?
1461) Sgt. Johnson is an active member of the Marines. He’s been serving for 10 years. He wants to buy a home with no money down. What loan option seems like the best fit?
1462) What factors directly affect an adjustable rate mortgage?
–00CeshopFinance00FINAL1
1) What are the loans the Federal Home Loan Bank makes to member banks called?
2) After reviewing the final page of the Closing Disclosure, Gloria is concerned that she’s being charged excessive points and fees. Page five provides her options for making a credit-related complaint to the ______.
3) When figuring income taxes, licensees should figure the amount they are required to pay based on gross income minus ______.
4) Mutual savings banks are concentrated mostly in the ______ U.S.
5) What feature is a key benefit of the VA guaranteed loan for veterans?
6) Which of the following is a legitimate business deduction for income tax purposes for a real estate licensee?
7) Clark is selling his home to Myrna. Clark will retain the title to the property until Myrna has paid the loan in full. What type of financing is used in this transaction?
8) What is hypothecation?
9) Who’s required to sign a promissory note?
10) Brenda and Joe have 20% cash to put down toward the purchase of their home, and they have great credit. What might be their best option for getting a traditional mortgage loan?
11) A buyer defaulted on the mortgage and the lender is preparing to foreclose. Which type of foreclosure is typically used when a mortgage is used as the security instrument?
12) Regarding active real estate investments, which statement is true?
13) Which factor that influences value addresses the ease with which the property can be conveyed to another?
14) Jay’s new loan to purchase a property includes the seller’s existing mortgage. What type of loan is this?
15) SRT Mortgage has a borrower who has fallen behind on her mortgage. Rather than go through a foreclosure, the borrower is attempting to sell the property. An offer came in for less than the borrower’s loan balance and closing costs, but for more than what the lender feels it’d get at a foreclosure sale, so it approves the purchase. What is this an example of?
16) The borrower’s closing costs and down payment have changed from the Loan Estimate, and the seller’s credit has increased. Which section on page three of the Closing Disclosure can help borrowers identify information that has changed from the Loan Estimate?
17) With an interest-only payment plan, ______.
18) The lender, the loan applicant, and the ______ all complete parts of the request for verification of employment form.
19) Lenders require that borrowers purchase and maintain adequate _____, which is usually bundled into their monthly PITI payment.
20) What effect do high interest rates have on borrowing?
21) Which type of title search method only goes back as far as when the last title search was performed and assumes the last search was done accurately, legally, and that any issues were resolved?
22) Which entity sets conforming loan limits?
23) Which factor that influences value focuses on the number of properties available?
24) With which approach to value does the appraiser analyze a property’s ability to earn future income?
25) Which of the following types of loans issued in California may be protected from a deficiency judgment?
26) What does the cost approach to finding an appraised value measure?
27) The Kimballs and their lender have agreed to a loan modification. How is the loan modification documented?
28) Which of the following statements is true regarding conventional loans?
29) Which of the following describes the Federal Reserve’s open-market operations?
30) What’s the purpose of the loan application?
31) Ruby is selling her home. The buyer, who’s not a veteran, would like to assume Ruby’s VA loan. Is this allowed?
32) What’s the acronym for the legislation that eliminates illegal referral fees among settlement service providers?
33) Which type of loan provides short-term financing for the purpose of developing improvements on vacant land or on land that has improvements, but will soon have more?
34) Eliza wanted her financial affairs kept private after her death. How could she best do this?
35) Which of the following would disqualify someone from obtaining an MLO endorsement?
36) The total amount that’s treated as home acquisition debt for tax purposes has to be less than ______ for married couples filing jointly.
37) Why is it common for lenders to sell mortgages on the secondary market?
38) What’s the purpose of a short sale?
39) The Loan Estimate allows consumers to compare loans using both the APR and the _______.
40) Which type of property takes 27.5 years to completely depreciate?
41) Lenders require that borrowers purchase and maintain adequate _____, which is usually bundled into their monthly PITI payment.
42) A defect on a title that can be monetary or physical is called an ______.
43) An investment strategy that focuses on looking for smaller multi-family properties, fixing them up, and renting them out describes which of the following?
44) Which of the following is used to protect the buyer from title defects after closing?
45) What is the ability to pay off liens against a property until a foreclosure sale is held?
46) If a property’s value decreases over time, it has experienced ______.
47) Bambi is buying a property on an installment sales contract. Due to her financial interest in the property, she retains equitable title. What does the seller retain?
48) How does the Federal Housing Administration help prospective homeowners?
49) Which of the following outcomes is most likely if the Fed decreases reserve requirements?
50) Cash flow in a personal finance system requires personal savings goals to be funded from the personal checking account rather than the business checking account. Why?
51) Which of the following is indicative of the limited partnership method of real estate investment?
52) What type of loan may be used if the buyer is obtaining seller financing?
53) Jack and Edith purchase a home using a loan from their bank. Their mortgage creates a(n) ______ lien on the property they’ve purchased.
54) Which of the following items is something a lender is prohibited from doing if the lender wants to write qualified mortgages?
55) A buyer is shopping for a mortgage loan and are attracted to the below-market interest rate offered for the first year of an adjustable rate mortgage. What’s this type of rate called?
56) For whose estate would a living trust be most beneficial?
57) What’s NOT true about a California real estate licensee who obtains an MLO endorsement?
58) Which one of the following statements is true about the FHA Energy Efficient Mortgage program?
59) Which approach to value used by appraisers relies on the sales price of comparable properties to help determine the adjusted market price?
60) Sharon, a new real estate licensee, is tracking all of her spending for one month. What’s the likely purpose of this exercise?
61) A line of credit that’s based on a percentage of the equity a person has in a property and which can be drawn upon for a number of years is known as a ______.
62) As a new licensee, it’s easy to make an inadvertent mistake when representing a client. What type of insurance would cover you if this happened?
63) A seller you’re working with still owes $50,000 on his mortgage but wants to net $20,000 after the mortgage and 7% commission are paid. What is the minimum for which the house must sell?
64) According to the IRS, a foreclosure is viewed as a ______.
65) Which of the following are phases of the real estate cycle?
66) When evaluating the income listed on a loan application, what will the lender consider?
67) The “first in time” rule of liens refers to lien priority according to ______.
68) Kirk is buying a home using an FHA loan. Which of the following would meet the FHA requirements for Kirk’s down payment?
69) Which of the following did the Dodd-Frank Act accomplish?
70) Ruth and Paul live in a rural area where emergency services, health care, and even neighbors take time and travel to access. They know their house could use some renovation to make it safer for their kids. What government program offers loans and grants to assist people like Ruth and Paul?
71) Which of these items is required for a promissory note to be a valid instrument?
72) Dawn and John own a home together, but they’re getting a divorce. They agree that John will keep the house and assume the loan they signed together. Will the alienation clause in their security document prevent the assumption?
73) Which business structure is the simplest to form, yet involves the most liability?
74) The purpose of the ______ is to promote fairness and transparency for mortgages and other financial products and services through education, enforcement, and research.
75) What’s another term for voluntary conveyance back to the lender?
76) Can Jeremy, a licensee, receive a referral fee for sending his buyer client to Ajax Title?
77) Sheila is selling her 15-acre property. She’s willing to carry back the loan for the buyer, Persephone, and she asks her real estate agent, Nick, to arrange the financing deal. Under what California law must Nick, the arranger of credit, provide disclosures about the financing?
78) A $300,000 property depreciated in value by 3%. What’s its new value?
79) Very few foreign lenders provide loans for real estate purchases in the U.S. Countries that had banks that issued real estate loans were ______, Taiwan, and the U.K.
80) Which type of agreement is used for large commercial real estate projects?
81) Which of the following items must be included in the security instrument used for a real estate transaction?
82) The ______ balances the powers of federal agencies by requiring them to follow specific processes and procedures, such as providing for public participation in rulemaking.
83) The ______ were enacted to address the effects of the subprime mortgage crisis, spur economic activity, and increase accountability in government spending.
84) How common is judicial foreclosure?
85) Matt is a loan officer with Kentucky State Bank and has an MLO endorsement. Which act governs his MLO-related activities?
86) The Real Estate Settlement Procedures Act is a consumer protection statute that ______.
87) Shawna is reviewing Brian’s loan application. She needs to verify the assets he’s claimed, specifically his bank account balances. Which form should she have him complete?
88) Which statement is true about a purchase money mortgage?
89) Which of the following is the primary goal for a consumer when reviewing a Loan Estimate?
90) Which of these is the better debt service ratio?
91) Which of the following conditions contributed to the 2007 financial crisis?
92) Which law places certain requirements on an individual who works for a borrower, for compensation to stop or delay a foreclosure sale?
93) The California ______ requires mortgage loan originators to give clients a specific disclosure statement and includes restrictions on how much they can charge for their loan origination or loan brokering services.
94) Arthur does not have an MLO endorsement. Legally, which of these actions can he perform?
95) Per the Real Estate Settlement Procedures Act (RESPA), licensees may not receive or give referral fees or finder fees (or anything of value) from/to whom?
96) What does a lender use a credit score to determine?
97) In a hypothecation scenario, the borrower owns the property and has possession rights. What does the lender have?
98) What California legislation prohibits arbitrary discrimination by businesses that offer services to the public?
99) Which U.S. Department of Veterans Affairs program allows a veteran to refinance a conventional loan to a VA loan?
100) Which secondary market institution seeks to provide credit to rural communities?
101) (ANSWERS will be revealed with proper subscription)
102) –00CeshopFinance00FINAL2
103) What is HUD’s stated mission?
104) A property is uninhabitable in its current state. What effect will its utility have on the value?
105) The components that make up a borrower’s mortgage payment can best be remembered using which acronym?
106) Which of these is an example of usury?
107) Which of these is considered an MLO activity?
108) What is a judicial foreclosure?
109) Bank failures and the loss of depositors’ funds occurred during the Great Depression. This led to the creation of which agency?
110) Who typically performs a CMA or BPO?
111) A buyer with a $250,000 loan has a monthly principal and interest payment of $2,042.71. If $1,145.83 is interest, what is the new principal balance after the first payment is applied?
112) A borrower has a 30-year, $500,000 loan with an interest rate of 6.25%. His monthly principal and interest payment is $3,078.59. How many payments will he make over the course of the loan?
113) Which of the following best describes a property’s assessed value?
114) Which of the following factors affect an adjustable rate mortgage?
115) Which of the following is a likely effect when the discount window is open?
116) Which of the following best describes the purpose of the Truth in Lending Act?
117) Which type of loan is a temporary loan often used by buyers who have not yet closed on their prior property?
118) Which act prohibits lenders from continuing foreclosure proceedings if a borrower has an application for a loan modification or other alternative pending?
119) Why is it important to identify the values that are important to you when you’re developing a plan for your personal finances?
120) What real estate investment strategy involves an investor purchasing many properties and reselling them immediately for a small profit?
121) Why don’t mortgage brokers service loans beyond placement?
122) Which of the following statements is true about the FHA Section 251 ARM?
123) Which of these is a function of the U.S. Treasury?
124) Chris used the VA guaranteed loan program to purchase a home five years ago. He now wants to sell that house and buy a new one. Is Chris allowed to use the VA loan program a second time?
125) What does the FHLB do?
126) What is a lifetime cap, as it relates to an adjustable rate mortgage?
127) Which of these is a factor in calculating a consumer’s credit score?
128) A buyer has a 15-year, $250,000 loan with a 5.5% interest rate. How much of the monthly payment is interest?
129) What type of lien against a property will be paid first in the event of a foreclosure?
130) Which of the following items are ongoing business expenses that a licensee should expect to pay?
131) The FHA 203(b) loan is a mortgage option for homebuyers who ______.
132) Which of the following best describes what Ginnie Mae does in the secondary mortgage market?
133) Which of these describes an implicit goal of a personal financial plan?
134) Which of the following is a good description of a home equity loan?
135) Which type of business structure shelters personal assets in the event of a lawsuit against the business owner?
136) Brenda is developing her personal financial plan. One of the first things she does is to identify her personal values, which she then connects to her budget. Why?
137) Kelsey and Jerrod have a housing ratio of 30% and a total debt obligation of 41%. Their credit score is 640. Do they meet the underwriting requirements for an FHA loan?
138) Which of the following government-sponsored enterprises purchases loans from agricultural lenders and sells financial instruments backed by these loans?
139) Your client exchanged one property for a similar property and did not have to pay capital gains taxes that year. How did he do this?
140) Why would some national lenders have state-level compliance issues?
141) Which of the following financing types involves the sale of personal property with the real property?
142) Which type of loan is made from the equity in the home?
143) When you start your personal finance system, you’ll take these steps: identify current expenses, estimate income, set financial goals, ______, and set up accounts.
144) Which of these is a recommended method for a licensee to estimate ongoing business expenses?
145) The lender is required to provide the consumer with a Loan Estimate form within what time period of application for a loan?
146) This statement is part of a promissory note attached to a security instrument: “I have the right to make payments of Principal at any time before they are due.” What’s the name of the clause where this statement is included?
147) In California, what type of foreclosure process is used if the lender seeks to pursue a deficiency judgment?
148) With a no down payment VA loan, the mortgage can’t be more than the amount of the ______.
149) What is an initial cap, as it relates to an adjustable rate mortgage?
150) Which of the following statements is true about start-up costs for a licensee?
151) As a licensee, when might you seek out the help of a certified public accountant?
152) Cash flow in a good personal financial plan requires money allocated to personal financial goals to be distributed in which way?
153) Which statement is true about a package mortgage?
154) Which of the following best describes a residential mortgage loan as it relates to the MLO endorsement?
155) What does the income approach to value rely on when valuing single-family and two- to four-unit properties?
156) What’s one of the main differences between a traditional mortgage loan and an interim loan?
157) Which entity guarantees government loans?
158) Brad and Chrissie decided to make some improvements to their house, so they went to the lender they used for their first mortgage and got a home equity loan. The new loan agreement includes a cross-default clause. What does that mean?
— Extra random (FinanceClass part3) —
1) Annual MIP can be removed from an FHA loan by _____.
2) What’s an example of an inquiry a consumer initiated that may appear on a credit score?
3) What is one of the qualifying standards for a VA-guaranteed loan?
4) A buyer is purchasing a ppt for $500k. His down pymnt of $50k and is financing the rest. What’s the amount of the loan origination fee if the lender charges one-and-a-half points?
5) The fewer ppts on the market, the greater the scarcity. What’s the effect on prices?
6) A loan with borrow options that can be long term with periodic adjustments or short term with more frequent adjustments to the rate is a(n) ___ mortgage.
7) What describes a Housing Choice Vouchers?
8) Lucy is a mortgage banker. Her business is regulated by ____.
9) A loan made from a homeowner’s equity where funds are drawn over time and the bank gains corresponding ppt ownership is called a ______.
10) Which entity generally acts in the secondary market?
11) Your clients, the Nguyens, have signed a contract for deed to purchase a ppt. What rights do the Nguyens receive?
12) What’s true about buydowns with a VA loan?
13) In ’08, as a response to the ’07 financial crisis, the Federal Housing Finance Agency began acting as conservator over which institutions?
14) What’s a reason a seller might consider selling his ppt through an installment plan instead of a traditional sale?
15) What falls under the definition of ‘dwelling’ according to Senate Bill 36?
16) What does the lump sum payment at the end of an interest-only mortgage loan consist of?
17) Brenda’s go-to financial expert has no fiduciary responsibility to her. This is because she’s working with a(n) ____.
18) During which phase of the RE cycle does a RE professional have the most impact?
19) How many hours of continuing edu must a RE licensee complete each year to renew their MLO endorsement?
20) Which entity buys loans primarily through thrifts?
21) Rather than be foreclosed on, Jarod turned his deed over to his bank. This is called a _____.
22) Elijah has identified his personal values, estimated his income, and analyzed his current expenses. With this info, he’s ready to ______.
23) Carla is a licensee who uses a personal financial system that recommends that all of her commission checks be deposited into her ____ account.
24) Payment history, age of accounts, credit usage, types of accounts, and ___________ are factors considered in calculating a credit score.
25) Lic Lynn has several accounts set up as part of her personal financial plan to help her manage cash flow. She’s allocated 10% of each commission check to business expenses, 15% to taxes, 8% to her retirement fund, 12% to various savings goals, and the rest goes to her living expenses. When she received a check, how does she direct the funds?
26) You’re estimating your annual income and find that the average sale price of a home in the area you’ll be working is $300,000. You determine your expected commission is 2% and you plan to make six transactions in the year. Assume there is no broker’s split. What will your estimated income for the year be?
27) When obtaining a mortgage to purchase a home, the borrower uses the ppt as ______.
28) What describes the federal funds rate?
29) What must a prudent lender do with the info received on a loan app?
30) What is the current value of a ppt that was purchased two years ago for $260k, assuming an appreciation rate of 2%?
31) The ____ was a response to the practice of redlining and was enacted in 1977.
32) PMI may be required on conventional loans where the loan-to-value ratio is in excess of ___%
33) The funding fee on a VA loan is waived when ____.
34) The doc that describes the loan amount and the terms for repaying and is attached to a security instrument is called the ____.
35) Your client, Shelby, a veteran using a VA loan to finance his purchase, just learned that the CRV came in lower than the sales price. But no problem: Shelby’s bro is willing to loan him the difference. If the loan is approved ____.
36) What best describes the state of the market during the over-supply phase of the real estate cycle?
37) Who needs to obtain a mort loan originator endorsement and register with the Nationwide Mortgage Licensing System and Registry?
38) What would most likely be found in the “potentially negative items” section of a credit report?
39) What is the secondary mortgage market made up of?
40) Millie and Jerry are purchasing a home using their VA loan benefit. The sale price on the home they buy is $320k, with 100% financing. Assuming that Jerry has a typical level of entitlement, how much of their loan does the VA guarantee?
41) What is the economic impact of mortgage loan payments?
42) A ppt valued at $1 mill is returning a net income of $85,000. What’s its cap rate?
43) Which type of RE investment trust derives its income from the rent or sale of ppt and interest dividends?
44) Lydia put the minimum 3.5% down on her $210k home. She’ll have to pay a MIP. What type of loan does Lydia have?
45) In which phase of the RE market cycle would you expect to see ppt under valued and a large supply of homes on the market?
46) Danny and Wendy recently relocated to California. They are buying a 3 bed home in an estab neighborhood where they look forward to raising a family. Their RE agent, Brunhilda, thinks that their income, which is on the low side, and the ppt could make them eligible for ___, which would offer reduced, fixed interest rates on a loan.
47) Kristoff got a bit behind on his mort and missed several pymnts. He and his lender devised a schedule that gives Kristoff an opportunity to make up those delinquent pymnts. What is this an example of?
48) In order to analyze your spending habits, you should track ___.
49) The amount of the ___ a veteran must pay depends on factors, such as military status, down pymnt amnt, and whether the veteran’s entitlement is being used for the first time or a subsequent time.
50) The amount of the ___ a veteran must pay depends on factors, such as military status, down payment, and whether the veteran’s entitlement is being used for the first time or a subsequent time.
51) Analyzing spending habits allows you to evaluate the impact of a purchase in terms of ____.
52) Cheyenne is selling the family farm on an installment contract. What is one advantage of selling the farm this way?
53) A buyer is purchasing a pt for $400k. his lender’s loan-to-value ratio is 80%. How much is the buyer financing?
54) Several actions take place on the secondary mort market. What is a common activity?
55) A calculation that looks at all recurring (or installment) debt – such as monthly mort, car, credit, and loan pymnts – as a percentage of the borrower’s monthly gross income, is called ____.
56) When does the mort insurance requirement requirement end for a borrower with a VA loan?
57) Bobby is completing a residential loan app. On the app, he lists his liabilities. What are liabilities?
58) What type of loans issued in CA may be protected from a deficiency judgement?
59) ____ is a legal action that liquidates or restructures debt. It can have a long-lasting negative impact on the borrower’s ability to obtain financing.
60) Tyler is a developer who renovates a long-abandoned warehouse in a low-income neighborhood into a community center, complete with space for after-school programs, a daycare, and a gym. Tyler is able to complete the reno with a loan funded by a local bank. Which act req financial institutions to make credit available for this type of development?
61) An increase in ppt value is ____.
62) What is a potential concern of a buyer who’s entering into a contact for deed with a seller?
63) Which RE finance instrument includes the promise to repay and the security instrument within the same document?
64) What are ppt taxes in a mort pymnt?
65) An ARM usually offers an initial interest rate that’s ___ a fixed rate mortgage for a period of time.
66) Tina is purchasing a home that appraised for $10k more than the sales price. On which figure will the lender base the loan-to-value ratio?
67) Wendy has been approved for her first mort. The lender advertised a 4.6% interest rate. She’s nervous about the terms and fees. What info is the lender required to provide?
68) Stacey’s lengthy military service makes her uniquely eligible for a(n) ____.
69) Cassie is helping her buyer client, Gus. As they discuss preparations for closing, she cautions Gus, “make sure you review the Closing Disclosure as soon as you receive it and ____”
70) The Farm-Credit System is _____.
71) Maxine is purchasing a small craft shop, including the underlying real estate. She applies for a commercial loan from her federally insured bank to complete the purchase. Is Maxine’s transaction covered by the RESPA
72) What’s the purpose of CA’s Covered Loan Law?
73) In which phase of the RE market would you expect to see unemployment increasing, prices falling, and foreclosures on the rise?
74) For which of these properties would gross rent multiplier be calculated?
75) Because of the Mortgage Disclosure Improvement Act, the only advance fee that a creditor can charge to a consumer before providing required loan disclosures is ___.
76) Because of the Secure and Fair Enforcement for Mortgage Licensing Act, borrowers can determine if mortgage loan originator is ___.
77) The ___ account is a recommended component of a personal financial plan that should be started as early as possible and contributed to throughout your working life.
78) The two most common insolvency methods put in place when a bank fails are the purchase and assumption method and the ___ method.
79) The planned transfer of money from your business checking account to your personal checking account to your savings accounts is called ____.
80) Closing costs are itemized on page two of the Closing Disclosure and all amount are ___.
81) A borrower who has received a certificate of eligibility will qualify for a VA loan ____.
82) A borrower sued a foreclosure consultant for violating the Mortgage Foreclosure Consultant Law. The borrower may receive actual damages, legal fees, and in severe cases ____.
83) Which doc is used to estab the path and proof of ownership?
84) Your client has a VA loan and wants to refinance to a lower rate. What’s the simplest option?
85) What best describes the CA short sale addendum?
86) When you develop your financial plan, you should start by ____.
87) Your business is booming, and you’d really like someone else to maintain your financial records. The best person for this role is ___.
88) In calculating a PITI mort payment, the annual taxes and insurance are divided by ___, and added to the monthly principal and interest payment to make up the total monthly payment.
89) If the annual taxes on a ppt are $1,000, how much is paid monthly?
90) With this type of loan, personal ppt is included with the real ppt in the sale. It’s commonly seen in commercial real estate, but you may also see this in the sale of furnished condos
91) The lender, the employer, and the ___ all complete parts of the request for verification of employment form.
92) What is a potential ramification for the seller if a short sale is completed?
93) A homeowner is behind on his mortgage. He’s decided to try to sell the ppt and is working with his lender to do so. He owes $315k on his loan balance and closing closts. He has an offer for $300k, which the lender approves. What is this an example of?
94) Melanie is a buyer who has agreed to purchase Stan’s ppt using a contract for deed. Who holds legal title to the ppr during the term of the loan?
95) One alternative to foreclosure is a voluntary conveyance of ___.
96) There are a lot more sellers than buyers in the current market. How will this demand influence value?
97) Because of the funding fee required for a VA loan, a borrower with no down payment funds saved should ____.
98) Craig’s loan is secured by a mortgage. Who holds legal title when this security instrument is used?
99) What is it called when the borrower and lender work together to restructure work together to restructure the terms of a home loan?
100) Which type of real estate investment trust involves both residential and commercial ppts?
101) Which of these are essential elements of personal financial responsibility?
102) By stabilizing and improving the mortgage market, the FHA helped to build ____.
103) Albert wants to sell his house to his cousin, who’s willing to assume the loan. What clause in Albert’s mortgage requires him to obtain the lender’s permission to do this?
104) The annual MIP is recalculated each year using ___.
105) Describe an equity real estate investment trust?
106) Which of the following is a difference between mortgage brokers and mortgage bankers?
107) The lender, the loan applicant, and the _______ all complete parts of the request for verification of deposit form.
108) Which of the following statements best describes a mortgage broker?
109) What are reserve requirements?
110) Which type of lien is a specific lien?
111) How many approaches to value do appraisers generally use?
112) Which clause is used in a security instrument to protect the original note holder if the security instrument is sold and the borrower subsequently defaults?
113) Why do lenders care so much about property condition?
114) Your client, Bruno, is an investor. He is in the process of selling a fourplex and mentions to you that he hates the idea of the capital gains tax he’ll be subject to. What should you tell him?
115) What is liquidity?
116) On a VA loan, the funding fee ______.
117) What U.S. Department of Veterans Affairs program assists Native Americans in financing the purchase, construction, or improvement of homes on federal trust land?
118) What are mortgage-backed securities?
119) Kylie has a small farm where she grows vegetables and sells her produce to restaurants. She want to expand it, and needs a loan to purchase some additional acreage. What makes it unlikely that most lenders will want to offer Kylie the loan that she needs?
120) On the borrower’s Closing Disclosure, the interest rate _______.
121) What are debentures?
122) ______ is directly influenced by construction of new homes, conversion of existing properties to residences, and construction costs.
123) The Federal Housing Administration helps prospective homeowners by ______.
124) In what phase of the real estate cycle do foreclosures rise and home prices fall?
125) What information does Schedule B-2 of a title commitment provide?
126) Which of the following made mortgages attractive investments?
127) “Private companies created by the U.S. Congress to make borrowing easier and more cost effective” describes ______.
128) Which of these factors is NOT used to define money?
129) A good personal financial system requires ______ reviews of performance so that you can modify it as needed.
130) Juanita invests in mortgage-backed securities. What is the likely impact on her as an investor when mortgage interest rates rise?
131) The Federal Housing Administration, Government National Mortgage Association, and the Office of Fair Housing and Equal Opportunity all operate under ______.
132) What is a periodic cap, as it relates to an adjustable rate mortgage?
133) Which of the following statements is true about the FHA annual mortgage insurance premium?
134) What is a qualified mortgage?
135) What does Section 8 of RESPA prohibit?
136) M&R Lending has borrowers who are in default. Those borrowers have listed their house for sale and must obtain M&R’s approval before they can accept any offers. What is this an example of?
137) When does recaptured depreciation apply?
138) Which type of business structure is the simplest for an independent contractor licensee to start?
139) Beatriz is employed by Regional Bank & Trust. When working with mortgage clients, she discusses a range of products Regional Bank & Trust offers. What is Beatriz?
140) Paul uses a personal finance system that allocates a percentage of income to his monthly expenses and his savings goals. If his total monthly expenses equal $3,000 and his income one month is only $2,000, how much will he put toward a savings goal to which he’s allocated 2%?
141) Which of these jobs does the Bureau of Engraving and Printing do?
142) How are real estate investment trusts sold?
143) What program does the U.S. Department of Veterans Affairs offer to assist Native Americans in financing the purchase, construction, or improvement of homes on federal trust land?
144) Which of the following practices would be considered predatory lending?
145) What’s a certified opinion or estimate of value of a particular property as of a particular date?
146) Assisting in the purchase of repossessed homes, ensuring that all clients receive fair and equitable treatment, and recommending FHA financing to a client are all ways that a licensee makes use of ______.
147) Christopher has questions about information shown on the Loan Estimate he received from his lender. What should he do?
148) The SAFE Act is intended to help consumers select which professionals, knowing that they are honest and competent?
149) Rachel is a real estate licensee. At what point should she begin funding her tax savings account to pay her quarterly estimated tax?
150) What’s another term for voluntary conveyance?
151) Why do life insurance companies use participation financing for larger projects?
152) When you start your personal finance system, you’ll take these steps: identify current expenses, estimate income, set financial goals, ______, and set up accounts.
153) Barry, a contractor, is performing work involving an FHA 203(k) loan. When will he get paid for his work?
154) Which of these jobs does the U.S. Mint do?
155) Mindy is reviewing Becky’s loan application. She needs to verify the work and salary information. Which form should Mindy have Becky complete?
156) What instrument is used to record the conversion to an ARM from a fixed rate of interest?
157) Some foreign lenders provide loans for real estate purchases in the U.S., but not many! Countries that had banks that issued real estate loans were Canada, Taiwan, and ______.
158) The Johnsons are shopping for a mortgage loan and are attracted to the below-market interest rate offered for the first year of an adjustable rate mortgage. What’s this type of rate called?
159) Manny is obtaining a home loan. He goes to his local bank and talks with Deborah, who discusses the lending products the bank offers. What is Deborah?
160) Which of these activities has a far-reaching effect on the country’s overall economy and is the largest indicator of the country’s economic health?
161) Adrian purchased a house for $220,000, financing $200,000 using a 30-year conventional mortgage at 4% interest. His monthly principal and interest payment is $955. The annual property taxes are $1,400, and the combined annual insurance premium is $900. What’s Adrian’s PITI payment each month?
162) What federal executive-level agency works to implement goals that ensure affordable housing, protect consumers, and build inclusive communities in the U.S.?
163) Completing a residential loan application requires providing information about the borrower, the loan being applied for, and the ________.
164) On a VA loan, the ______ helps the lender determine if the value of the property makes it suitable for use as collateral on the loan.
165) Melvina has a Home Equity Conversion Mortgage. She feels secure because she knows that ______.
166) A borrower makes the same monthly mortgage payment for the entire term of the loan. At the end of the loan period, all of the interest and principal is paid off. What type of loan is this?
167) Planning, construction, buying/selling, and moving are four of the five new-home construction phases or activities that impact the economy. What’s the fifth?
168) Seller concessions on a VA loan ______.
169) The primary FHA loan program used to purchase a one- to four-family home is ______ of the National Housing Act.
170) What is HUD’s stated mission?
171) Which of these is a requirement for a property purchased using the VA guaranteed loan program?
172) The amount of the funding fee for a VA loan is calculated as ______.
173) Which are phases of the real estate cycle?
174) The U.S. Department of Veterans Affairs offers special programs, which can be used to adapt housing to accommodate the disability, to veterans or military members with permanent and total service-connected disabilities. What are these programs?
175) What’s the most likely reason borrowers would choose a private loan company?
176) Which entity guarantees loans?
177) What’s Fannie Mae’s mission?
178) The FHA sets limits on how much of a loan it will insure based on the ______.
179) With a no down payment VA loan, the mortgage can’t be more than the amount of the ______.
180) Dylan is in default on her mortgage. She decides to hand over the deed to her property rather than face foreclosure proceedings. This is an example of ______.
181) Bernie works for Quickwell Lending and accesses several lenders to find a loan product that works best for his clients. What is Bernie?
182) According to the PMI Act of 1998, at what percentage of equity position does personal mortgage insurance cancel for homeowners?
183) The Bakers are selling their home, and they’ve picked the perfect time. The market isn’t saturated with a lot of properties for sale, but there are many buyers looking to make a purchase. What type of market is this?
184) What entity oversees Fannie Mae and Freddie Mac, and regulates the Federal Home Loan Bank?
185) Which term describes the action taken to force a sale of real property encumbered by a lien?
186) Shelly received Brian’s loan application and provided him with a loan estimate. Who does Shelly most likely represent?
187) Which clause in a mortgage or deed of trust describes the borrower actions that constitute default and allow the lender to make the debt immediately due and payable?
188) Which of the following best explains the alternative foreclosure types, such as foreclosure by writ of entry?
189) ______ is directly influenced by factors such as employment levels and wages, interest rates, population changes, confidence in the market, and availability of loans.
190) How are real estate investment trusts sold?
191) Traditionally, what represents supply and demand in the real estate market?
192) Why might a lender request a property survey in addition to a title search?
193) What’s true about the funding fee on a VA loan?
194) In accordance with RESPA prohibitions, rebates may only be offered by licensees to transaction parties, if _____.
195) Which of the following helps to protect the appraisal process from outside undue influence?
196) Which of the following statements is true about the practice of seeking deficiency judgments?
197) What makes credit unions so competitive with large commercial banks?
198) What is the term used to describe a lien, encroachment, or other issue on a title?
199) Why might a buyer want to assume a loan?
200) Brendon is obtaining a loan to buy a home. When reviewing his loan documents, he sees one called a note and one called a mortgage. What is the role of the note?
201) What might happen if borrowers miss scheduled mortgage payments, fail to pay property taxes, or allow the property to fall into disrepair?
202) Which of the following statements about the secondary mortgage market is true?
203) What’s the purpose of a suit to quiet title?
204) Which of these actions represent a common interaction between the primary and secondary mortgage markets?
205) The purpose of the Truth in Lending Act (TILA) is to ______.
206) The question, “What’s the purpose of this appraisal?” can be answered by which step of the appraisal process?
207) Why don’t mortgage brokers service loans beyond placement?
208) The veteran’s certificate of eligibility describes ______.
209) The Kimballs have missed two mortgage payments and are working with their lender to modify their loan. What is the goal of a loan modification?
210) Which of the following is an example of a voluntary lien?
211) One of the ways that the FHA has stabilized and improved the mortgage market is through the introduction of ______.
212) Which institution was created by Congress as the Federal Home Loan Mortgage Corporation (FHLMC) in 1970?
213) Which of the following is a possible result of a community growing too little or not at all?
214) Which of the following statements best describes a mortgage banker?
215) For which of the following properties is the cost approach most likely to be used?
216) What is typically used to prove there are no encroachments on the property?
217) What type of agency exists because of the actions and behavior of the parties?
218) The Consumer Credit Protection Credit Act, which includes the Truth in Lending Act, is also known as _________________.
219) Patty is buying a three-bedroom mountain home. After applying for a loan, she received the Loan Estimate at least _______ business days before closing.
220) John wants to do a 1031 tax exchange with a property he just sold. How many days does he have to identify a new property for the exchange?
221) Juaquin is an appraiser. What purpose do Juaquin and other appraisers serve?
222) Conforming loan limits vary based on location and ______.
223) Which of the following is NOT part of the assumptions section of the Loan Estimate?
224) When consumers make a small down payment, borrow the remaining amount of the purchase price from a lender, and reap the rewards off of hte full investment value, they are demonstrating what concept?
225) What is the purpose of the request for verification of employment?
226) The Federal Housing Administration funds its mortgage insurance program ______.
227) With a straight mortgage, what type of payments are made up until the end of the loan term?
228) Melanie is a buyer who has agreed to purchase Stan’s property using a contract for deed. Who holds legal title to the property during the term of the loan?
229) Interest-only loans are a form of ______ buyer financing.
230) It’s possible for the adjustment period on an adjustable rate mortgage (ARM) to have ranges, such as three or ______ years apart.
231) Bindy received a loan based on the amount of equity she had in her house. She used this lump sum to fund her daughter’s college education. What type of loan did she get?
232) Which of the following best describes the state of the market during the recession phase of the real estate cycle?
233) The energy efficient mortgage program insured by the FHA requires an energy consultant to provide the lender with a report listing recommended modifications for energy efficiency, an estimate of the cost for each recommendation, and ______.
234) The FHA Energy Efficient Mortgage allows modifications such as solar panels as long as ______.
235) When the Torrens system is used to perform a title search, who acts as title guarantor in case a claim is filed?
236) Veterans who wish to use the Native American Direct Loan must ______ and their tribe must have a valid agreement with the VA to offer the program.
237) Jeremiah is preparing to begin the homebuying process. Which of these is an action he should take?
238) _______ are part of the loan-approval process and are responsible for completing a loan application and supplying supporting documentation.
239) Joe decided to borrow funds from his retirement account to fund the down payment on his new house. It’s now two years later and he lost his job. What is true about his pension plan?
240) 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?
241) What information does Schedule B-1 of a title commitment provide?
242) Kara is a lender who is working with prospective buyer, Stan. What does Kara ask Sam to provide to show his work history and earning information?
243) Borrowers must list their assets when completing a residential loan application. What are assets?
244) Sam has a mortgage that has a static interest rate, but monthly payments that increase over time according to a set schedule. What type of mortgage does Sam have?
245) The Federal Housing Administration’s qualifying standards for a mortgage loan ______, but the mortgage insurance the FHA provides balances the risk for the lender.
246) Which of the following best describes the state of the market during the over supply phase of the real estate cycle?
247) The ______ tells the lender how much entitlement the veteran has available under the VA loan program.
248) Which party to the loan approval process is responsible for completing a loan application and supplying supporting documentation?
249) Which of the following describes amortized debt?
250) Which of the following is the best example of the economic principal of leveraging, as it applies to a real estate transaction?
251) Which of the following represents a potential concern when borrowing funds from a pension or retirement plan?
252) The characteristics of value include which of the following?
253) A mortgage banker gets paid through fees from ______ and servicing loans.
254) What is the formula for calculating the total housing ratio? / The formula for the total debt ratio is:
255) Maria is a borrower reviewing her Closing Disclosure. She notices a section under “Other Costs” with a number of fees that were not shown on her Loan Estimate, such as the commissions to the real estate brokers and the home inspection fee. Should Maria contact her lender about this issue?
256) Which of the following statements about the Torrens system is true?
257) What information does Schedule A of a title commitment provide?
258) Monty retired 10 years ago and would like to see the world, but his retirement account won’t support his desire to travel. Monty heard of a loan that would allow him to take advantage of the equity in his home by getting monthly payments from the bank by using his house as collateral. What is this type of loan called?
259) Which range of credit scores do most consumers fall into?
260) Which of the following contributed to the 2007 financial crisis?
261) Veterans who use the VA’s Specially Adapted Housing grant must ______.
262) Margo, a mother of three, is in the largest percentage of consumers with a score of _______. Margot’s tried unsuccessfully to get approved for loans, but she was issued a credit card that included many extra fees and required deposits.
263) Brandon’s home has been foreclosed on. He had an outstanding loan balance of $145,000, which he owed to his lender, XYZ Lending. There’s also a lien against the property recorded in 2014 for an unpaid student loan of $25,000, and a HELOC established in 2012 of $30,000, of which he’d used $10,000. If his foreclosure nets $150,000, how much will each creditor be paid?
264) Mike has had some financial problems and is considering borrowing from his retirement plan. Which of the following is a true statement?
265) Which of the following outcomes is most likely if the Fed increases reserve requirements?
266) Borrowers with which credit rating are considered subprime?
267) When Brenda applied to have her FHA loan refinanced under the Streamline Refinance program, one requirement of the loan was that ______.
268) The Martins are buying their first house and are a little nervous about whether they’ll be able to afford payments long term. Page four of their Closing Disclosure is of particular interest to them because it lists specific disclosures, such as escrow account information, with the purpose of ______.
269) Fannie Mae, Freddie Mac, and the Federal Home Loan Bank are examples of ______.
270) Which type of lien affects real and personal property?
271) Leading up to closing, who should ensure that all deadlines are being met, all contingencies are cleared, and all paperwork is fully executed and delivered?
272) Easements are a type of encumbrance that can affect a property. Which of the following is true about easements?
273) Eleanor is in the market for a home loan. She feels confident knowing that South Carolina’s _______ will protect her from predatory lending practices.
274) For income-producing properties, how is rent prorated at closing?
275) Co-ownership without inheritance rights is what kind of real property ownership?
276) Which act encourages fair, truthful, non-deceptive, and evidence-supported claims in advertising?
277) Jenny and her friend Kali went out to lunch. Afterward, they paid the bill. Their agreement to pay for the food they were served is what type of contract?
278) Of the following, who typically prepares the closing statement?
279) How can an investor roll over any gain realized in an investment property into another property and defer paying capital gains taxes?
280) The state claimed Sophia’s home under eminent domain. It appraised her property and offered to pay Sophia the appraised value for the home. What’s this process called?
281) The Real Estate Offer Rejection Form has been required by law in South Carolina since ________.
282) Who generally writes a broker’s price opinion?
283) In states without full disclosure requirements, whose responsibility is it to review disclosures, ask questions, and obtain a home inspection?
284) Your assistant, Brady, often answers client questions about offers and negotiation. What do we know about Brady?
285) Which document should be provided to borrowers no fewer than three days prior to closing?
286) What’s the best definition of a cooperating agent?
287) Which of the following is not a benefit of living in a PUD?
288) Which of these is an example of voluntary alienation?
289) With local land use, the stress placed on the community’s infrastructure is an example of ______.
290) Janice’s life tenant, Jacob, is currently living on her property. Once Jacob dies, Janice has arranged for the property to be given to the School for the Gifted. What interest does the School for the Gifted currently have?
291) Which of the following documents will show the buyer and seller which costs to pay at closing?
292) Jamie enters an agreement to buy Yolanda’s home. Per the agreement, Jamie promises to provide a $5,000 earnest money deposit, whereas Yolanda promises to sell her home to Jamie. These promises represent forms of ______, which is required to make the contract valid.
293) What’s a foreclosure?
294) What is the type of possession in which a tenant stays after the right to possess has terminated?
295) Darryl is an unlicensed personal assistant to Yvonne, a licensee. Yvonne is careful to direct his activities so he doesn’t do anything that would require a license. Why is she so careful about this?
296) Which of the following activities occurs before the closing meeting?
297) How do you decide which party you represent in a transaction?
298) Wayne conveys a property to Robbie until Robbie’s death, when the property is conveyed to Tiffany. What is this scenario an example of?
299) An appraiser is most likely to use the cost approach for which of the following properties?
300) Which document do property managers and the owners they represent sign to formalize the relationship?
301) This document is filed with a condominium building’s master deed and details such items as ownership meetings and common elements’ maintenance log.
302) Mark works at Farm and Country Bank, and has arranged an agricultural loan for Josh, a local organic farmer. Josh didn’t meet the bank’s normal underwriting standards, but Mark made the loan because he was able to arrange for a guarantee from ______.
303) You are calculating prorations. Which of the following items go into the seller’s credit column and the buyer’s debit column?
304) Calculate the total debt ratio based on the following information, assuming the lender does not consider any debt with 10 or fewer payments remaining: $1,500 condo payment; $100 monthly association fees; $150 monthly student loan payment; $300 car payment (with only four payments remaining); and a monthly gross income of $5,000.
305) Dual agent Barbara Park can only disclose Seller Carrie’s reason for moving if:
306) Cracks, holes, or rotten areas on a soffit are common ______ issues.
307) Frieda is practicing dual agency, and neither party seems to mind, even though she didn’t obtain informed consent. Is this legal?
308) If Mega Corporation owns real property, chances are it owns it in ______.
309) Cultivated crops are considered personal property even though they’re part of the soil, and they’re known as _______.
310) If Johnson Marketing’s capital gain on the sale of its business was $479,000, capital improvements were $227,000, and the adjusted basis in the property was $976,000, what was the sales price?
311) What is the purpose of a deed?
312) The Knolls are purchasing a property and are concerned about the title, so they want to have a title search performed. Who can perform a title search?
313) Benefits to an auction buyer or seller ______.
314) Which of the following auction properties would most likely be considered by a developer who wants to jump in and start building right away?
315) Licensee Grant is representing both the seller and the buyer in a transaction. What is the term for this type of agency?
316) ____________ have no restrictions on the types of real property they’re qualified to appraise.
317) What value principle assumes that if an identical property were sold recently, its sales price should be a good indicator of the value of the subject property?
318) Which of the following is the most thorough presentation of the appraiser’s solution to the appraisal problem?
319) Amperage is the amount of electricity flowing through a wire, and ______ is the amount of electrical pressure upon the wire.
320) Why are industrial lofts and warehouses often converted for residential or commercial uses?
321) Which of these best describes an appraiser’s typical work environment?
322) Species habitat, beauty, erosion control, and pollution treatment are all reasons that wetlands are ______.
323) Marissa, a buyer, asks you what she can do to prepare to buy. What should you tell her?
324) Under the Kentucky Property Management Agreement, how many days’ notice does an owner have to give an agent or broker regarding the contract’s early termination?
325) If an endangered species or wetlands exist on a site, which of the following is true?
326) A ___________ is qualified to appraise any one- to four-unit residential property, regardless of value or complexity, but isn’t qualified to appraise subdivisions.
327) Trent is at a(n) ______ auction, meaning that there’s a confidential minimum amount that will be accepted as the winning bid.
328) What’s a rehabilitation loan?
329) Which of the following statements about KREC’s one-time showing agreements is true?
330) What is a company checklist?
331) Denise is a real estate licensee performing a market analysis. She uses the Rule of Three. This means she selects three comparables _______.
332) Which type of depreciation is a loss in value due to defects in a structure’s design?
333) You’re obligated to preserve all the confidential information you receive from a seller client. This obligation ________.
334) The cost approach to finding an appraised value measures _______.
335) In the conveyance of real property after death, what trumps any terms specified in the deceased person’s will?
336) If there’s an overall change in market value, what type of adjustment can an appraiser use to show the overall effect of the change?
337) Suppose Aimee wants to plan ahead and take the same number of credit hours a year to meet her 48 hours of required post-licensing education during KREC’s stipulated time period for PLE. How many hours of PLE would she need to complete each year?
338) Investors looking at property in a depressed neighborhood may be anticipating the _________ phase of a real estate cycle.
339) Price levels, vacancy rates, new building permits, inventory rates, and sales volume are all _______.
340) How many anchor stores does a regional shopping center normally have?
341) The power of the state to claim property when the owner dies without a will and without locatable heirs or creditors is also known as ______.
342) What effect will a property’s utility have on the value if it’s currently uninhabitable?
343) Remembering the acronym PITI can help borrowers recall what makes up their ______.
344) Which of the following is a common problem with a foreclosure property purchase?
345) Careful handling of all funds is crucial to the success of a brokerage firm. Of special importance, however, is handling of ______.
346) The ______ model is used to value raw, vacant land when the highest and best use development divided into residential parcels.
347) Carla creates a trust to convey her assets to her children. Her brother, Alvin, is placed in charge of making sure the terms of the trust are carried out. In this example, Carla is the ________.
348) Why do appraisers gather and analyze information about a subject property’s neighborhood?
349) Legal permissibility, physical possibility, financial feasibility, and ______ are all considerations when determining highest and best use.
350) Why is poor weather or lackluster marketing a detriment to a seller on auction day?
351) The purpose of the Uniform Electronic Transaction Act (UETA) is to ____________.
352) Uh-oh. You failed to present an offer on behalf of your client in a timely manner. As a result, the seller accepted a lower offer from another buyer. You could be sued for ______.
353) Which of the following describes a legal description?
354) Annabelle loves convenience, especially when it comes to shopping. She wants to invest in a commercial property that’s about 72,000 square feet and offers a hair salon, a few small restaurants, and a dry cleaner for the people who live in the area. What type of retail space is Annabelle considering?
355) When a lender charges a borrower more than the highest allowable interest rate, it is called ______.
356) Your buyers have done all the research possible on a property and are excited that they have the winning bid on auction day. They then discover that they don’t really get the property. What’s the most likely reason?
357) What must you do to assist your clients with environmental issues?
358) What type of agency exists when a buyer’s broker is the listing agent for the same property?
359) Which type of exclusive brokerage agreement in Kentucky provides the highest service to a seller client and the most protection for the broker’s commission?
360) A residential income property has 10 units. Each apartment rents for $1,000 per month and has two bedrooms, a bathroom, a living room, and a kitchen. What’s the scheduled rent for this property on an annual per room basis?
361) An appraiser is performing an income-based appraisal on a commercial property. Which of these items would be shown as a fixed expense on the appraiser’s reconstructed operating statement?
362) In full seller disclosure states, whose responsibility is it to notify the seller of the seller’s duty to disclose all known material defects?
363) HVAC is an acronym for what?
364) Why does the sales comparison approach rely upon data from arm’s length sales?
365) Rick is obtaining a loan for a commercial property. What can he expect from the loan process?
366) Which of the following terms refers to the increase or decrease in land value that occurs when several parcels are combined into one large plot?
367) Which approach might an appraiser weigh more heavily while reconciling the appraisal value of a vacant lot?
368) Which of the following formulas is used with the index method to find the reproduction cost?
369) In a 1031 exchange, there are rules governed by Section 1031 of the Internal Revenue Code. The rules include _______________.
370) Which best describes a purchase money mortgage?
371) Britney is selling her bungalow on an installment contract. The buyer made payments dutifully for five years, but has not made any payments for more than a year. Which of the following is true?
372) Another term for a valuation is ______.
373) When using an amortization chart, you use the interest rate and the loan term to arrive at a number, such as 5.17808. Now what do you do?
374) The final page of the Closing Disclosure provides loan calculations that tell the consumer ______.
375) What’s TRID?
376) Monty retired 10 years ago and would like to see the world, but his retirement account won’t support his desire to travel. Monty heard of a loan that would allow him to take advantage of the equity in his home by getting monthly payments from the bank with his house as collateral. What is this type of loan called?
377) Which government entity oversees open market operations?
378) What percentage of homes in the U.S. are owner-occupied?
379) Qualified mortgage requirements are set by the ______.
380) John wants to do a 1031 tax exchange. He just sold his property. How many days does he have to identify a new property?
381) Which type of mortgage is seller financing in which the buyer gives a mortgage to the seller toward the purchase price, and which buyers use as down payment financing?
382) The rate at which a bank can obtain a loan from its Federal Reserve bank when using commercial paper as collateral is called ______.
383) Robin has great credit and was able to secure a loan for her oceanside dream home. Her 30-year, fixed rate loan is for an amount that’s above conventional loan limits. What type of loan does Robin have?
384) What is the benefit Ginny Mae investors have over other MBSs?
385) Loans create ________ for banks and other financiers.
386) A refinance is a ______.
387) The ______ clause allows the borrower to prepay principal on the loan at any time without penalty.
388) In which phase of the real estate market cycle would you expect to see property under valued and a large supply of homes on the market?
389) When a lender has a lien on a property, what rights does the lender hold?
390) The Mortgage Disclosure Improvement Act gives applicants a _________ to review and approve the Loan Estimate and Closing Disclosure form.
391) With this common loan type, the home is used as collateral and the loan creates a second mortgage if the first mortgage hasn’t been paid off.
392) Veterans using the ______ program aren’t required to submit a COE, get a new appraisal, or verify income.
393) Ted is in foreclosure but has some equity in his property. An investor suggests that Ted enter into a sales contract with him for a substantially higher price than the investor would actually be paying. The investor pockets the cash and allow the house to be foreclosed on. What sort of scheme is this?
394) Interest rates that are more than _____ over the current market rate are considered predatory lending.
395) Secured corporate bonds use ________ as collateral.
396) Which of the following is a true statement about deducting interest on mortgages taken out in tax years 2018 to 2025?
397) According to the National Association of REALTORS®, the majority of foreign investors in U.S. real estate are ______.
398) Under which section will you find any credits provided by the seller?
399) The section on the Loan Estimate called “Services You Cannot Shop For” includes fees for ______.
400) Which of the following is a true statement about the “hardest hit fund”?
401) Which of the following is an example of leveraging in a real estate transaction?
402) How do you determine debt coverage ratio?
403) Annual MIP can be removed from an FHA loan by ______.
404) Jody is concerned about the ______ that doesn’t allow her to start her gardening greenhouse because it sits next to a nature conservancy.
405) Rich wants to add a room to his house, so he takes out a home equity loan. This creates a/an __________ lien.
406) Kendra is purchasing a home and is ready to find a lender who will give her terms that she can afford. She has done her homework and knows that she can use ______ to compare loans and find the one that will best meet her needs.
407) Sylvia is a single mother living in a small town surrounded by ranch and farm land. She would like to buy a house there, but her income as a hair stylist makes it hard for her to qualify for a conventional loan. What government program might provide her with a direct loan to purchase a home?
408) Which of the following is an example of an inquiry initiated by a creditor that may appear on a credit report?
409) In addition to itemizing what are the borrower-paid closing costs, the prepaids section includes the __________ for each item.
410) Federal Housing Finance Agency established percentage targets and ___________ for loans made to low- to moderate-income borrowers.
411) Most adjustable rate mortgages have a feature that allows borrowers to _________ to a fixed-rate during a specific period of the mortgage.
412) What’s another name for the Homeowners Protection Act?
413) Which of these is a true statement about when a promissory note is sold?
414) An industrial development bond is a variety of _____ bond.
415) It’s possible for the adjustment period on an adjustable rate mortgage (ARM) to have ranges, such as three or ____ years apart.
416) The Federal Housing Administration’s loan program ______.
417) Which of these items did the FHA implement to stabilize and improve the mortgage market?
418) The ______ was enacted in 2010 to create stricter regulation of the financial services industry.
419) What did the National Association of REALTORS® say about foreign investment in U.S. real estate?
420) You may see a ________ named as a land contract, real estate contract, contract for sale, agreement for deed, or as articles of agreement.
421) Which of the following could be different from the amount on Loan Estimate that was initially received and can impact the monthly payment?
422) The housing ratio is the borrower’s monthly housing obligation as a percentage of ______ income.
423) Jackie is 10 days late on her loan payment. Will her lender place her loan in default?
424) The FHA offers a program for loan insurance on adjustable rate mortgages under ______ of the National Housing Act.
425) Robbie’s lender notifies him of an impending foreclosure, and is told that his property will be sold at public auction. After the auction occurs, Robbie receives a notice of eviction for which the lender had to petition a court. What does this describe?
426) What factors affect an adjustable rate mortgage?
427) What’s one reason a borrower would choose a split-or piggyback-loan option?
428) Which of these acts has special provisions for borrowers who are victims of overcharging?
429) Millie and Jerry are purchasing a home using their VA loan benefit. The sale price on the home they buy is $320,000, with 100% financing. Assuming that Jerry has a typical level of entitlement, how much of their loan does the VA guarantee?
430) The ______ sets requirements for mortgage loan originators.
431) Qualified mortgages require debt-to-income ratios of no more than ______.
432) Brenda’s go-to financial expert has no fiduciary responsibility to her. This is because she’s working with a(n) ______.
433) The Farm Credit System funds are acquired from __________.
434) The three types of finance instruments that can be used when financing a real estate purchase are the note with mortgage, note with deed of trust, and ________.
435) Nick and Nora are purchasing their first home. Like most homebuyers, they obtain a mortgage loan, using the property as ______.
436) Glenn is purchasing a home for $400,000. The property appraised at $415,000, and Glenn is financing $300,000. What’s the loan-to-value ratio?
437) Emily has great credit and was able to secure a loan for her oceanside dream home. Her 30-year, fixed-rate loan is for an amount that’s above conventional loan limits. What type of loan does Emily have?
438) Danica and Rae purchased a home using a conventional fixed-rate loan that was 90% of the purchase price, since they could only afford a 10% down payment. Their monthly payment will include ______, but only for a portion of the loan term.
439) Acme Bank, a primary lender, sells its loans on the secondary market, so it makes sure that all its loans meet ______ requirements.
440) Chuck is selling his property to Kyle. Chuck has agreed to finance the transaction for Kyle, who will make payments to Chuck while Chuck retains the legal title to the property. What’s this an example of?
441) Lydia put the minimum 3.5% down on her $210,000 home. She’ll have to pay a mortgage insurance premium (MIP). What type of loan does Lydia have?
442) The VA-guaranteed loan uses _____ to pay for the costs of the program.
443) Krista is obtaining a loan to buy a home. Her loan agreement consists of one document called a note and one called a deed of trust. What is the role of the note?
444) When Stacy’s clients ask her if she can recommend a mortgage broker, she promptly gives them the name of the best mortgage broker she knows, Gary Jones. Later, she always receives a check from Gary as payment for the referral. Would this be legal or illegal under the Real Estate Settlement Procedures Act (RESPA)?
445) The purpose of the Truth in Lending Act (TILA) is to _______.
446) Scott is a California real estate licensee with an MLO endorsement. Arthur, his assistant, does not have an MLO endorsement but he does have a real estate license. Which of these activities must Scott perform?
447) Shelly’s flower business is blooming, and it’s time for her business to grow. She plans to take out a business loan to open two more shops on the north side of town. Which lending institution would she most likely go to for the loan?
448) Lizzy rents an apartment in a building that’s being converted to condominiums. By law, the owner of the building must give Lizzy ________.
449) Which of the following provides everything a lender needs to know in order to value the property used as collateral for a loan?
450) Which of the following license holders in Pennsylvania is exempt from fulfilling the continuing education requirements as part of the license renewal process?
451) The lender will require flood insurance if the home is ______.
452) Janie’s got an open house scheduled for Sunday, but lets her friend in on Saturday to preview it. It’s love at first sight! With the owner out of town, Janie decides to cancel the open house so there won’t be any other offers. Her friend makes an offer and it’s accepted on Monday. What fiduciary duty or duties has Janie breached?
453) When a lower-quality property is adjacent to a higher-quality property, it can diminish the value of the higher-quality property. What economic principle of value is this?
454) What piece of regulation or regulatory authority requires all levels of government to perform an environmental assessment any time any action is taken that may impact the environment?
455) The State Real Estate Commission holds regular meetings and at least one public meeting a year in Pittsburgh, Philadelphia, and ______.
456) When an appraiser relies on comparable properties to estimate the adjusted market price of a property, the appraiser is using the _______ approach.
457) Thanks to this act, sites containing hazardous substances are identified, and responsible parties must clean them up.
458) Broker Hal enters into a listing agreement with seller Jane. Jane insists that the agreement state that only native-born U.S. citizens be allowed to buy the home. For what reason will this agreement be considered void?
459) Disclosing which of the following facts would be considered a fair housing violation?
460) Which of the following is a prohibited activity under Pennsylvania law?
461) What’s a covenant between a lessor and lessee?
462) In real estate contracts, which are required: legal descriptions or street addresses?
463) Which of the following is one of your duties as a listing agent?
464) Jill needs to pay the web developer who created a new website for her brokerage, but her checking account is low, so she floats herself a loan from earnest money kept in the brokerage’s escrow account and deposits it in her account for a few days before paying the developer. Which answer correctly identifies the violation(s) Jill has committed?
465) A Pennsylvania licensee who acts in the buyer’s best interest and makes a continuous good-faith effort to find a property until the buyer enters into a purchase contract is a ______.
466) Which of these trusts is created according to the terms of the will of a deceased person?
467) You represent a buyer of a $1 million property. The seller’s agent, through the seller, offers a 2.5% cooperative agent commission. Who’s your client?
468) Which of these is an example of a lot and block description?
469) Which of the following best describes the concept of appreciation?
470) How large is an acre?
471) Which of these items should real estate professionals help first-time buyers and buyers who have experienced recent credit issues to understand?
472) A period of stagnation in real estate when no one is buying and no one is selling is known as _____________________.
473) What’s the purpose of the Interstate Land Sales Full Disclosure Act?
474) Which type of Real Estate Investment Trusts derives a portion of its income from interest dividends?
475) Hugh works as a loan officer at a bank. Because of the SAFE Act, he must be registered with the
476) Which transaction must comply with Appraiser Independence Requirements?
477) A buyer has a 30-year, $750,000 loan with a 5.75% interest rate. How much of the monthly payment is interest?
478) Which statement is true regarding government loans?
479) Under the ______________ , every mortgage loan originator must be fully licensed and carry a mortgage surety bond.
480) To be eligible for an ___________________ ,an applicant must have participated in farm or ranch management for at least three years.
481) A homeowner has been paying her mortgage for several years and has built up equity. She decides to take out a home equity line of credit because she needs some cash. This credit will create A
482) Which of the following describes a Treasury note?
483) The _________________ clause allows the borrower to prepay principal on the loan at any time without penalty.
484) Which of the following describes a Treasury bill?
485) Financing for a real estate transaction can use a note with a ___________________ or a note with a deed of trust.
486) Real estate professionals keep a multitude of other professionals busy during the buying and selling process. Which of these professionals or entities are most active outside of the buying and selling process?
487) Carmen purchased a single-family residence in Monterey County for $480,000 using an FHA loan. At the same time, Yancy made an offer on a single-family residence not far away in Fresno County for $300,000, and was told he could not use an FHA loan for the purchase. Why?
488) The ______ was created in response to the practice of redlining.
489) What’s the most common indicator of illegal property flipping?
490) Which of the following items would be included in the M2 money measure?
491) Mortgage revenue bonds are a variety of what other type of bond?
492) Rather than face foreclosure, Tony decides to cut his losses. He voluntarily conveys his property to his lender. What type of foreclosure alternative is this?
493) Conventional loans that are outside Fannie Mae or Freddie Mac guidelines are said to be ______.
494) Maggie has a neighbor, Jim, who’s facing foreclosure. She likes Jim and wants to help him out, so they agree to do a subject to purchase. What does this mean?
495) Farmer Mac is a program that ____________ for agricultural property loans, rural utility loans, and certain loans guaranteed by the U. S. Department of Agriculture.

496) Life insurance companies sometimes like to insure their investment in commercial projects by insisting on an equity position. This is known as ___________ financing.
497) Completing a residential loan application requires providing information about the borrower, the property being purchased, and the ________.
498) Hugh works as a loan officer at a bank. Because of the _____________, the must be registered with the Nationwide Mortgage Licensing System.
499) Financing for a real estate transaction can use a note with a _________ or a note with a deed of trust.
500) What is a government-sponsored enterprise (GSE)?
501) Under the “Projected Payments” section of the Loan Estimate, the consumer can review ______.
502) Who is the intended consumer group for the Streamlined Modification Program (SMP)?
503) In the event of a client lawsuit against an independent contractor operating under an LLC, typically, only ______ are at risk.
504) Mary Francis is on her way home from work and stops at the grocery store. The business account she opened recently gave her an ATM card to go with it. Should she use the card to buy groceries?
505) Which of the following is the most liquid money measure?
506) Which entity sets the criteria for the conforming loan limits?
507) Which of these features is shared by the mortgage and the deed of trust?

508) In a residential real estate sale involving a federally related loan, who’s required to provide Real Estate Settlement Procedures Act disclosures to the consumer?
509) The rate at which a bank can obtain an overnight loan from another bank without providing collateral is called ______.
510) One common predatory lending practice is to charge fees for unnecessary or ____________ loan products or services.
511) Janice is planning to borrow money from her retirement savings. Which of the following is a true statement about her situation?
512) Kathy decided to borrow funds from her retirement account to fund the down payment on her new house. Which of the following is true about this loan?
513) What did a 2019 National Association of REALTORS® study say about foreign investment in U.S. real estate?
514) You are preparing a competitive market analysis on a vacant lot that you hope to list for sale. Which of the following approaches to value will be used in the development of the estimated value?
515) The period over which a property may be profitably utilized is called its:
516) Wear and tear to the load bearing members of a building would be classified as:
517) While the economy is experiencing inflation, interest rates:
518) A broker secured a buyer for his client and the seller accepted. Under which type of listing could a broker not receive a commission?
519) Mr. Seller signs an open listing on his home with five different brokers. In this case:
520) A parcel of vacant land is listed for $100,000, requiring 20% down with the seller
to carry back the balance. The broker brings in a full-price cash offer, but the owner
refuses. The broker is entitled to:
521) Under a lease, the leasehold interest lies in the:
522) Which of the following requires real estate listings to be in writing?
523) All of the following listings require that the broker be the “procuring cause” of the
sale if he/she is to be entitled to a commission, EXCEPT:
524) Payment history, age of accounts, credit usage rate, inquiries, and _______ are factors considered in calculating a credit score.
525) A RAM is a type of equity financing. What does RAM stand for?
526) Kobi, an appraiser, is appraising a single-family home used for a rental. If he wants to use the income approach, he will likely use ______.
527) Veterans using the ______ program aren’t required to submit a COE, get a new appraisal, or verify income.