Final Test Flashcards by Doris Gaffin

One role of the federal reserve system is to?

Create a favorable economic climate

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A package loan includes?

Both real and personal property

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Regulation Z generally applies to?

A credit transaction secured by a residence

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Intermediary services in the primary mortgage market are provided by?

Mortgage brokers

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A house had a sale price of $240,000. The buyer obtained a loan for $220,000, if the lender charges 3 points, how much will the buyer pay in points?

$6,600

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On which type of loan can the borrow prepay without penalty ?

Fannie, Freddie, FHA, VA

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The asking price for a home was $585,000 the buyer offered $565,000 and the seller accepted. The appraised value of the home is $560,000. The buyer plans to pay $94,600 in cash and take out a mortgage for the remainder. What is the LTV for this property?

84%

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The equal credit opportunity act prohibits lenders from discriminating against credit applicants on the basis of all factors except?

Past Credit History

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Lenders that make conventional loans to sell in the secondary mortgage market follow the standardized forms and guidelines issued by Fannie Mae and?

Freddie Mac

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The real estate financing market comprises?

The primary and secondary mortgage markets, plus government influences such as fed reserve system.

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What helps lenders reduce the risk on a conventional mortgage loan with a high LTV?

Private mortgage insurance

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A sale is closing on Aug 31st. Real estate taxes that are calculated on a calendar year basis have not been paid for the current year. The tax is estimated to be $1800, what amount of proration will be credited to the buyer (paid by the seller)?

$1200

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What form must be provided to a loan applicant within three business days of application?

Loan estimate

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What form must be provided to a loan applicant within three business days of application?

Loan estimate

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If the owner sells a fully occupied rental property, how will the tenants security deposit be treated at closing?

Credit to the buyer, debit to the seller

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A real estate broker has had an arrangement with 2 of 5 mortgage lenders in town, the broker recommends only those 2 lenders to clients an in return the lenders pay for the vacations the broker offers sales associates as rewards for high performance. Based on these facts which of these statements is true?

The brokers arrangement with the lender is an illegal kickback under RESPA.

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Proration at closing typically do not include?

Appraisal fees

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When appraising a new, vacant home, an appraiser will likely use?

The cost approach

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An appraisers role is to?

Provide an opinion of value

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The principle the maximum value is realized when land use is in harmony with surrounding uses is?

Conformity

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A business plans to build a large warehouse store in an area of smaller stores, so the business purchases five neighboring lots from their five owners. What is the term for this activity?

Assemblage

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W buys a small house in a highly desirable neighborhood consisting of large homes and pays $390,000. X buys a nearly identical home in a neighborhood of similarly sized homes and pays $290,000. What economic principle describes the reason why W paid more than X?

Progression

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It would cost approximately $350,000 to build a house and its various improvements on a parcel of property. If the property was vacant, undeveloped land, it would be worth about $100,000. At present, the property’s physical deterioration equals about $60,000. If an appraiser were to apply the cost approach, what would be an estimate of the value of this property?

$390,000

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Air pollution from the increase of auto traffic near a building has dissolved intricate detail work. The cost is 5x the buildings present value, this describe?

Incurable physical deterioration

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What is the GRM for a residential duplex (2 units) with a selling price of $234,000 if the monthly rent for each unit is $925?

925x2= 1850, 234,000/1850= 126.5

The characteristics of value include?

Demand, Utility, Scarcity, transferability. (DUST)

A house has been on the market for several months because you have to walk through the master bedroom to get to the garage, this floor plan is?

Functional obsolescence

Owner is considering a below ground pool that may cost thousands of dollars, before hiring contractors the owner should consider?

Contribution

2 unit apartment building is being appraised. The accepted gross rent multiplier is 144, the annual income generated by the building is $16,800. The monthly expenses are $300. Based on the income approach, what is the estimated market value of this apartment building?

$201,600

An apartment building has $65,000 in potential gross annual income. The vacancy rate is estimated at 5%, total operating expenses are $29,000 and the capitalization rate is 9%. Using the income approach, what is the value of thee building?

$363,889

Which of these concepts applies to every appraisal?

Highest and best use

An empty lot located in a neighborhood of single family homes is best used for?

A single family home

A married couple has retired and have $800,000 in equity in their home but don’t have cash to travel, they could consider?

A reverse mortgage

Lender forecloses on a home, the suit is filed March 15th, the sale date is set for May 10th. If the borrower attempts to redeem property May 1st?

The borrower is exercising the equitable right of redemption

$230,000 with 20% down payment, balance is financed by fixed mortgage rate at 6% lender charges 4. Points, how much does buyer need at closing?

$53,360

Mortgage company charges a borrowers fee of 1.5%, asking price of house was $235,000, sale price is $210,000 and down payment is $50,000, what will mortgage company charge as a fee?

$2400

“In the event of borrowers default under the terms of this agreement, lender may declare the entire unpaid balance of the debt and payable immediately” This clause is called?

An acceleration clause

This month a borrower made the last payment on a mortgage loan, the lender must execute?

A satisfaction of mortgage

The decision whether to buy or rent should involve consideration of?

Housing affordability and current mortgage interest rates.

What is the term that refers to a lender charging an interest rate that is higher than that permitted by law?

Usury

When a deed of trust is the security instrument, which party usually chooses the trustee?

The lender

How does an accceleration clause help lenders?

Without the acceleration clause, lenders would have to sue the borrower for every overdue payment.

After foreclosure sale, what responsibility does the purchaser at the sale have for the mortgage and any junior liens?

The purchaser has no responsibility, because the purchaser receives property title without mortgage & junior liens.

The real estate licensing authority in Indian is ?

The Indiana real estate commission

The Indiana real estate commission is made up of?

12 Members

Which sanction permanently blocks the licensee from practicing real estate on his or her current license?

License revocation

The limit per judgement covered by the recovery fund is?

$20,000

In Indiana who must be licensed as a real estate broker?

Anyone listing property for compensation

To obtain a broker license, a partnership must?

Have one partner who is managing broke and one partner who is Indiana resident.

True or False: A nonresident who is issued an Indiana broker license has the same rights as any Indiana Licensee.

True

Indiana issues provisional licenses to?

Military service members

When is a licensee required to complete the post licensing requirements?

During the first 2 years after initial licensing.

If a broker fails to renew the license by the expiration date, what happens?

The license becomes Invalid

An application for reassignment to a new broker company must be submitted within ____ of the brokers termination from the current broker company.

5 business days

How many hours of continuing education must a broker complete during each license period after the initial license period?

36 hours

Which of the following laws that regulate agency relationships is based on previous cases that have established precedence?

Common Law

In Indiana if Tom list his property for sale with a brokerage, with whom does Tom sign an agency relationship contract?

The managing broker

In an in house agency relationship,?

2 clients are represented by different brokers in the same firm

Which of the following statements is true regarding the duties a broker has to a seller?

The broker may not disclose that the seller will accept a lower price for the property.

Substantive contact between a broker and a customer occurs when?

The customer tells the broker he is financially qualified for a home in a particular price range.

Which of the following is a responsibility of a managing broker?

To develop and enforce a written office policy that details allowable agency relationships.

If a managing broker dies?

Each broker associated with the deceased managing broker becomes a managing broker until associated with another managing broker

One feature that distinguishes an independent contractor from an employee is?

Whether the managing broker controls how the individual performs assigned tasks.

Indiana law requires that all listing agreements include

An expiration date on the agreement

Example of legal advertising

Newly remodeled home near public park and shopping.

According to NAR, Internet advertising for real property or real estate services must include?

The brokers name and affiliated brokerage

Which of the following is not considered good funds?

$5,000 personal check

Where does Indiana law require that evidence of a brokers current licensure be retained?

Displayed at the office where the broker conducts business

Indiana prohibits unlicensed assistants from ?

Canvassing for listings

If an unlicensed assistant negotiates a commission on behalf of the broker and the broker knew about it?

The broker is liable for the violation and can be penalized for it.

What is the purpose of a property inspection?

To help the buyer make an informed decision about purchasing the property.

True of False: A property seller must submit the disclosure form to the buyer prior to accepting the buyers offer to purchase.

True

John is selling his property through agent Tim. John’s mother died in the home 2 years ago and Tim knows this. Sue now wants to buy the home through her agent Connie, who can be held liable for not telling sure about the death in the home?

John, if sue ask about deaths in the house.

Which of the following would prevent an individual from becoming licensed or certified as an appraiser in Indiana?

Failure to pay property taxes in full

What agency was created by Dodd-Frank?

Consumer financial protection bureau

Depending on a homes location, a mortgage lender may require the borrower to carry?

Flood insurance

Which homeowner policy covers older homes with replacement cost higher than the homes market value?

HO-8

Home built after what year are most likely free of lead based paint?

1978

The profit that will be received if and when an investment sells is?

Unrealized capital gain

A tax credit is?

subtracted from the tax owed.

If a taxpayer sells one home and claims a capital gain exclusion, how long must the taxpayer wait until selling a second home and claiming a capital gain exclusion on the second home?

2 years

Final Test Flashcards

(81 cards)