Final Test

Question 1

During periods of tight money, lenders:

Answer 1

B. Are likely to be more selective on property standards

Question 2

A $100,000 loan at 7% payable at $583.33 per month is a(n):

Answer 2

A. Straight note

Question 3

The 3 parties to a deed of trust are:

Answer 3

C. Trustor, trustee, beneficiary

Question 4

Regarding FHA and DVA qualifying property standards:

Answer 4

D. All properties must meet minimum qualifying standards

Question 5

If a conventional loan is NOT sold to Fannie Mae and Freddie Mac

Answer 5

C. Both A and B many lenders still comply with secondary market for potential sale

Question 6

The flow of funds from other investments back into savings accounts in thrift institutions is called:

Answer 6

A. Reintermediation

Question 7

Another name for “saving loan” is the:

Answer 7

B. Bridge loan

Question 8

For single-family residences, the uniform Residential Appraisal Report generally applies greater weight to:

Answer 8

A. The sale comparison approach

Question 9

In regards to promissory notes:

Answer 9

C. The periodic payments on the installment note that reduces interest owed is referred to amortization

Question 10

A freeway adjacent to a home is an example of:

Answer 10

Economic obsolescence

Question 11

Which of the following characterized lending policies of life insurance companies:

Answer 11

A. Preference for a very large projects

Question 12

The Fed’s money management tools include all of the following except:

Answer 12

B. Persuading member banks to make loans

Question 13

In arriving at value, the appraisers best source for obtaining “comparable s” would be:

Answer 13

C. Local realty MLS data

Question 14

Characteristic of credit unions include all the following except:

Answer 14

B. Credit unions are generally less personal and focused on community than other lending institutions

Question 15

A single-family dwelling sold for $300,000. The property is rented for $2,000 a month. The GRM is:

Answer 15

B. 12.5

Question 16

The principal purpose of the Depository Institution and Monetary Control Act was to:

Answer 16

A. Phase out restrictions on interest rates that lenders may pay depositories

Question 17

Interest bearing savings accounts in banks are formally called

Answer 17

A. Time Deposit

Question 18

When comparing items in the comparable sections of the appraisal, the following applies:

Answer 18

A. If an item is superior to the subject a minus (-) adjustment is made

Question 19

To guarantee fair lending practices, the community reinvestment Act promoted:

Answer 19

D. Reporting data related to race gender etc. identification of discrimination practice

Question 20

The home value code of conduct (HVCC):

Answer 20

C. Was enacted to enhance quality and independence of the appraisal process

Question 21

The trade association that consist of the major investor and lenders in the mortgage banking field is the:

Answer 21

C. Mortgage bankers

Question 22

When an applicant for a loan fails short of meet qualifying income ratios, lenders may feel justified in approving a higher ratio if:

Answer 22

D. Any of the above situations exists to justify approval of a higher ratio

Question 23

The formula for calculating the “front end” ratio is:

Answer 23

A. Mortgage payment + gross income

Question 24

The Secure and Fair Enforcement for Mortgage Licensing Act is responsible for which of the following:

Answer 24

A. Registering and maintaining a database of nationwide loan originators

Question 25

A purchase money loan is best illustrated by:

Answer 25

B. Seller carrying back a first trust deed

Question 26

“Perfect” FHA front end and back end ratios are:

Answer 26

A. Front: 28% | Back: 36%

Question 27

To qualify for a VA loan, the Department of Veterans Affairs applies a two-phase procedure namely:

Answer 27

A. Residual income and qualifying income ratio

Question 28

The act of “seasoning funds” involve:

Answer 28

B. Having funds in the borrowers accounts long enough to be considered his/her own funds

Question 29

Regarding persons who have participated in a short sale, bankruptcies or a past foreclosure:

Answer 29

A. Lenders rely significantly on past mortgage payments records

Question 30

The following is most likely to affect ones credit score negatively:

Answer 30

C. Current and frequent inquiries

Question 31

All of the following are related to the new Qualified Mortgage Rule except:

Answer 31

C. The QM only refers to 30 year Conventional loans

Question 32

Which of the following is the least likely to qualify as income for borrower qualifying purposes?

Answer 32

A. Alimony and child support

Question 33

The maximum commission that may be charged for a $25,000 loan secured by a second trust deed is:

Answer 33

D. No limit

Question 34

Which of the following demonstrates high motivation in measuring borrowers ability to pay back loans:

Answer 34

C. Home is purchased for buyers personal occupancy

Question 35

How is a mortgage banker different from a mortgage broker?

Answer 35

D. Each is correct

Question 36

You are a seller carrying back a purchase money deed of trust in the form of a second for part of the purchase price. The maximum interest rate you may charge without violating California usury law is:

Answer 36

B. Any rate agreed to between you and the borrower (second trust deed)

Question 37

Which of the following is a reoccurring closing cost?

Answer 37

D. Hazard Insurance

Question 38

Under the equal credit opportunity act, lenders may ask loan applicant:

Answer 38

C. Wether they are married or unmarried

Question 39

Under the real estate settlement procedure act:

Answer 39

A. Must give borrowers a written estimate of closing cost

Question 40

Which of the following is true regarding balloon payments?

Answer 40

C. Balloon payments are prohibited with any loan seeking protection under QM rule.

Question 41

A lender has an actual loan application only when the following is acquired:

Answer 41

B. Borrowers name/ssn/income info/ subject property address/ estimated property value/ requested loan amount

Question 42

Whether paid on the first or any other day of the month, mortgage payments:

Answer 42

A. Include interest paid in arrears (arrears = already accumulated interest and then paying)

Question 43

The info required for the Home Mortgage Disclosure Act report field annually by lenders is found in:

Answer 43

B. Section X of loan application

Question 44

A short sale can be described as:

Answer 44

A. A sale in which the property is sold for less than the amount owed

Question 45

An association of 2 or more parties who combine their financial resources for achieving specific investment objective is best illustrated by a:

Answer 45

B. Syndication

Question 46

High balance conventional loans require the borrower to obtain protection for the lender in case if default. This protection is:

Answer 46

C. Private mortgage insurance (PMI)

Question 47

When a property is offered for sale at a foreclosure action, which of the following parties is not allowed to bid?

Answer 47

C. The trustee — one that holds the title

Question 48

Following a foreclosure sale, a teustee’s deed is issued under:

Answer 48

A. Power of sale contained in the trust deal page

Question 49

Which of the following is a false statement regarding payday loans?

Answer 49

A. Payday loans

Question 50

Which first trust deed amount is except from real property mortgage loan law?

Answer 50

D. $30,000