Chapter 10 Flashcards
Which statement about Regulation Z is NOT true?
A. Regulation Z protects consumers from misleading practices by the credit industry and provides them with reliable information about the costs of credit.
B. Regulation Z applies to home mortgages, home equity lines of credit, reverse mortgages, credit cards, installment loans, and certain kinds of student loans.
C. Regulation Z was established as part of the Consumer Credit Protection Act of 1968.
D. Regulation Z should not be confused with the Truth in Lending Act.
D. Regulation Z should not be confused with the Truth in Lending Act.
The main objective of the Real Estate Settlement Procedures Act (RESPA) was to protect homeowners by assisting them in becoming better educated while shopping for real estate services and eliminating kickbacks and referral fees which add unnecessary costs to settlement services.
A. True
B. False
A. True
The escrow agent maintains all documents and funds related to the transaction until the day of closing.
A. True
B. False
A. True
The most common type of title insurance is a basic lender’s policy, which is purchased by banks and other financial institutions to cover mechanics’ liens and other unrecorded liens, unrecorded easements/access rights, and defects/other unrecorded documents.
A. True
B. False
A. True
Who most frequently handles closings in the state of Texas?
A. Th Broker
B. The Sales Agent
C. The Title Company
D. The Attorney
C. The Title Company
An heirless property will go into escheat.
A. True
B. False
A. True
What Act created the Consumer Financial Protection Bureau?
A. The Dodd-Frank Wall Street Reform and Protection Act
B. The Fair Credit Reporting Act
C. The Consumer Protection Act
D. The Truth in Lending Act
A. The Dodd-Frank Wall Street Reform and Protection Act
Which statement about the Loan Estimate is NOT true?
A. The Loan Estimate tells you important details about the loan you have requested.
B. The lender must provide you a Loan Estimate within three business days of receiving your application.
C. The Loan Estimate is a five-page form that you receive before applying for a mortgage.
D. The form provides you with important information, including the estimated interest rate, monthly payment, and total closing costs for the loan.
C. The Loan Estimate is a five-page form that you receive before applying for a mortgage.
The proration of real estate describes the division of real estate expenses according to the proportion of ownership or rental.
A. True
B. False
A. True
The closing is the process:
A. During which the principals in the transaction sign all legal papers relating to the sale and purchase of the property
B. Before the contract is signed
C. Before the buyer applies for the loan
D. During which the buyer and seller negotiate the purchase price
Rationale: The correct answer is A.
During which the principals in the transaction sign all legal papers relating to the sale and purchase of the property. The closing happens after the offer has been negotiated, and the contract is delivered to the closer to close the transaction. The buyer and seller will sign all legal papers relating to the sale
All residential loans originated after October 3, 2015 are required to use:
A. The Loan Estimate and the Closing Disclosure
B. The Good Faith Estimate
C. The Settlement Statement
D. The HUD 1
Rationale: The correct answer is A. The Loan Estimate and the Closing Disclosure. The Loan Estimate replaced the Good Faith Estimate and the Closing Disclosure replaced the HUD 1 Settlement Statement.
A. The Loan Estimate and the Closing Disclosure.
The Loan Estimate replaced the Good Faith Estimate and the Closing Disclosure replaced the HUD 1 Settlement Statement.
If the seller should die after delivering the deed into escrow:
A. The title will need to go through a probate court.
B. The property will go to the seller’s heirs, and the buyer will not be allowed to buy the property.
C. The transaction is binding on the seller’s heirs.
D. The buyer may buy the property, but must wait 90 days to close.
C. The transaction is binding on the seller’s heirs. The sale is binding on the seller’s heirs, and the property will not need to go through probate.
The person who complies with all the lenders’ closing instructions and coordinates the execution of all lender-provided documents is the:
A. Escrow officer
B. Broker
C. Salesperson
D. Lender
A. Escrow officer.
The escrow officer also returns executed documents according to the transaction dictates.
A limited, non-invasive examination of the condition of a home, often in connection with the sale of that home is a(n):
A. Appraisal
B. Inspection
C. CMA
D. Loan
B. Inspection.
The inspector prepares and delivers to the client a written report of findings
At the closing, the seller will sign which of the following instruments?
A. The deed to the property
B. The mortgage on the property
C. The promissory note
D. The deed of trust
A. The deed to the property.
The seller signs the deed. The deed of trust is a mortgage. The deed of trust, mortgage, and the promissory note are signed by the buyer.
