RealEstateU Questions Flashcards
(209 cards)
1
Q
An investor who bought a rental house needs someone to take care of the property, screen prospective renters, coordinate repairs, handle maintenance and tenant concerns, and evictions, if necessary. He’s looking for a…? A. Property manager. B. Appraiser. C. Contractor. D. Mortgage broker.
A
Property manager.
2
Q
Single family homes are…?
A. Private freestanding residential houses.
B. Homes that cannot house more than one family.
C. One of the least popular types of property sales.
D. Only located in cities, not rural areas.
A
Private freestanding residential houses.
3
Q
The majority of real estate agents work with…? A. Residential properties. B. Commercial properties. C. Industrial properties. D. Foreclosed properties.
A
Residential properties.
4
Q
Sam is looking for a warehouse, and he wants to find a real estate agent or broker who is knowledgeable in this area. He’s starting a business, and it will require space for assembly and production, but he also needs to be able to use it for distribution, warehousing, and research and development. He needs to find…?
A. An agent who specializes in industrial properties.
B. An agent who specializes in foreclosed properties.
C. A lawyer who is familiar with manufacturing.
D. A residential broker.
A
An agent who specializes in industrial properties.
5
Q
Gloria is interested in buying a business, and she needs to find someone who is familiar with sales of retail stores, restaurants, or offices. This person should have a good understanding of the business side of property ownership, such as leases, rentals, and maintenance. What she’s looking for is a real estate agent or broker who works with…? ACommercial property. BIndustrial property. CResidential property. DAgricultural property.
A
Commercial property.
6
Q
There is a mixed-use property for sale in Cassie’s community, and a buyer walks into her office looking for a residential space. Should Cassie consider showing him the property zoned mixed-use?
AYes, because mixed-use is a combination of commercial and residential real estate.
BNo, because residential property is never part of mixed-use.
CYes, because the buyer might change his mind.
DNo, because residential space is always zoned for single-family homes.
A
Yes, because mixed-use is a combination of commercial and residential real estate.
7
Q
The demographics, interest rates, costs, pricing, and the economy affect the real estate market individually and together by…?
AChanging the balance.
BCausing confusion.
CIncreasing the paperwork.
DNothing, because they don’t affect the real estate market.
A
Changing the balance.
8
Q
In economics, demand is…?
AThe supply of willing and able consumers, which can be few or numerous.
BWhen a buyer or seller has unreasonable requests.
CHarmful to good business practices.
DUseless in real estate.
A
The supply of willing and able consumers, which can be few or numerous.
9
Q
When the supply is limited and demand is high…? APrices escalate. BPrices fall. CThe market is considered sluggish. DMore homes go into foreclosure.
A
Prices escalate.
10
Q
Tom’s buyers are looking for a home that is located in a very popular area and they are hoping to find a deal. In order to keep their expectations realistic, Tom needs to explain to them the principles of supply and demand and how it relates to their search and the housing prices in that area. That means…?
ABecause the area is in high demand, the prices will also be high.
BBecause the area is in high demand, they can easily find a deal.
CHomes in popular areas are harder to get financing for.
DBecause it’s a popular area, the demand will be low.
A
Because the area is in high demand, the prices will also be high.
11
Q
One of the neighborhoods in Julie’s community has suffered a downturn. There are not many jobs nearby, some homes have been abandoned, and the population has been transient. This means that the prices for the homes that are for sale there should be…?
ALower than average, because the demand is low.
BHigher than average, because the demand is low.
CNo different, because if the houses are the same as other neighborhoods, the price will be the same.
DCash only, because the banks won’t take the risk.
A
Lower than average, because the demand is low.
12
Q
Interest rates are changing. If they are going up, this has a direct impact on buyers and the supply and demand of properties because…?
AHigher interest rates means the cost of borrowing money increases, reducing the amount borrowers can afford.
BHigher interest rates increase sales.
CHigher interest rates only affect buyers.
DHigher interest rates don’t make any difference.
A
Higher interest rates means the cost of borrowing money increases, reducing the amount borrowers can afford.
13
Q
Pat’s buyers have found a property in a great area, but they want a corner lot. Corner lots in this particular subdivision are in high demand because there are long streets and few corners. When they find the house they want on a corner lot, they should expect…?
AThey might have to pay more because of supply and demand.
BThe financing will be easier to get because the property is popular.
CTo be able to close sooner because corner lots have shorter escrows.
DTo have to deal with unreasonable sellers.
A
They might have to pay more because of supply and demand.
14
Q
A lack of supply is known as…? AScarcity BDemand CAppreciation DDepreciation
A
Scarcity
15
Q
To become a real estate broker, a person must have…?
AExperience as an agent, a broker’s license, and additional education.
BA large amount of money in escrow to cover any problems that come up.
CPrevious experience as a business owner.
DA master’s degree.
A
Experience as an agent, a broker’s license, and additional education.
16
Q
Fill in the blank. …......... represent both the buyer and seller or both the tenant and landlord in the same transaction. Dual agents Brokerage relationship Applicants Agents
A
Dual agents
17
Q
An agency (non-agency) relationship between the broker and their client (customer) under a brokerage engagement is defined as...? ABrokerage relationship BDual agents CApplicant DBroker
A
Brokerage relationship
18
Q
If using experience obtained in another state, the candidate must meet which of the following conditions?
AAll items listed
BThe candidate’s previous jurisdiction can show that the applicant had a license during the previous five years
C Typically, they must prove they had an active license for three out of five years just prior to applying to the Commission.
DThe candidate must have obtained the experience within five years of applying for a Georgia license.
A
All items listed
19
Q
Any …......... that applies for a broker license must submit a copy of its …......... agreement and its Certificate of Trade Name, filed with the Clerk of the County. Apartnership Bcorporation Ccorporation Dfranchisee
A
Partnership
Note: This requirement is covered under Rule 520-1-.04(6) of the Georgia Rules and Regulations.
20
Q
Darryl Jones moved from Louisiana, where he was a broker, to Georgia, where he is applying for a broker license. Darryl tried several times to obtain a criminal history report from the appropriate authorities. Since he couldn’t get the required information, Darryl will need to provide all of the following EXCEPT:
Ahis marriage certificate
Bfingerprints
Cauthorization for the Commission to obtain the FBI report
Dassociated fees for the FBI report
A
his marriage certificate
21
Q
Hans Rosenstein moved from Florida, where he was a sales agent, to Georgia. Hans completed his post-license course in Florida, a state considered similar to Georgia in terms of real estate law. Does Hans have to take the post-license course in Georgia?
ANo
BYes
CNo, but Hans is not eligible to practice real estate in Georgia.
DNo, because Hans can transfer his license to Georgia without additional fees or exams.
A
No
Note: Sometimes a non-resident salesperson has completed a post-license course similar to Georgia’s. As long as the course was completed prior to receiving a Georgia license, the salesperson doesn’t have to take the Georgia post-license course.
22
Q
Jolie Harper is a licensed real estate agent in a Georgia brokerage. She is offered a job selling condos for the unlicensed owner-developer. Jolie must …......... and will have to reapply if she decides to practice as a salesperson under a brokerage again. A inactivate her license Bretake her agent exam Ctake the broker exam Dsubmit her resume
A
A inactivate her license
23
Q
Any lapse longer than two years and under five years can be reinstated by paying back fees and taking the appropriate class. Which of the following is not a valid answer?
AFor community association managers, they must take the Community Association Managers Prelicense Course.
BFor a salesperson, they must take the Salespersons Prelicense Course.
CFor brokers or associate brokers, they must take the Brokers Prelicense Course.
DFor appraisers, they must take the Salespersons Prelicense Course.
A
A For community association managers, they must take the Community Association Managers Prelicense Course.
Note: Any lapse longer than two years and under five years can be reinstated by paying back fees and taking the appropriate class. These classes include: • For community association managers, the Community Association Managers Prelicense Course • For a salesperson, the Salespersons Prelicense Course; and, • For brokers or associate brokers, the Brokers Prelicense Course. These courses have to be taken within one year.
24
Q
Maeve O’Donnell doesn’t take the post-licensing course within one year of receiving her license. She then lets her license lapse for more than five years. Which of the following is required in order for Maeve to practice real estate again?
AShe needs to reapply as an original applicant.
BShe has to pay a $100 fee.
CShe can no longer practice real estate in Georgia.
DShe can just request a new license number from the Commission.
A
A She needs to reapply as an original applicant.
25
```
A nonresident broker may be the qualifying broker for all except which of the following companies?
Aappraisal practice
Ba limited liability company
Ccorporation
Dpartnership
```
appraisal practice
26
Drew Fenstemaker writes a contract that guarantees seller Warren Wilson $100,000 for his property, while Drew walks away with any amount resulting from a sales price over $100,000. However, if the home sells for less than $100,000, Drew must make up the deficit. Which of the following statements is correct?
AEven if Warren is happy with this arrangement, net brokerage agreements are illegal in Georgia and Drew is risking his license with this rather shady deal.
BThis is a legal practice in Georgia.
CThis is acceptable only if the sales price is under $500,000.
DThis is acceptable only if the sales price is under $1,000,000.
A Even if Warren is happy with this arrangement, net brokerage agreements are illegal in Georgia and Drew is risking his license with this rather shady deal.
27
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Community Association Managers may need to obtain a …......... or the appropriate insurance if they meet certain thresholds.
Afidelity bond
Bsales contract
CManagement agreement
DCAM agreement
```
fidelity bond
28
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If the qualifying broker of a corporation, partnership or limited liability company resigns, dies or is discharged, the entity has ............ days to find a new qualifying broker. In case no qualifying broker is found, the brokerage must stop all real estate services.
A60.0
B15.0
C30.0
D365.0
```
60.0 days
29
```
The Commission keeps electronic licensing records for…?
A15 years
B40 years
C7 years
D2 years
```
15 years
Note: This requirement is covered under Rule 520-1-.04(4) of the Georgia Rules and Regulations.
30
```
Refunds of earnest money are credited at closing or paid by check. The total of all checks should reflect a zero balance except for the…?
Abroker’s commission
Bsales agent's commission
Cthe buyer down payment
Dsales price
```
broker’s commission
31
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Sales agent Lisa Pringle sells the McDonalds' home to a buyer Lisa also procured (who is also related to Lisa). Lisa negotiated a $30,000 discount off the original sales price from the motivated sellers. In exchange for the lower sales price, Lisa promises the McDonalds new living room furniture for another home she plans to sell to them. This is a violation of the ............ unless Lisa discloses it on the closing documents during the sale of the McDonalds' house.
Arules for consideration
Bethics laws
Cfederal real estate law
Dfair housing laws
```
Rules for consideration
Note: Licensees can rebate any part of a fee, commission or other compensation to a principal for services related to the sale, purchase, lease or exchange of real estate. The rebate must be disclosed on the closing statement. The licensee cannot mislead another licensee, lender, principal title or government entity regarding the source of money used to complete the real estate transaction.
32
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Glenn Thomas is a broker who sold a house for the Houstons 2.5 years ago. Glenn must retain all documents related to the sale of the home for at least…?
A6 months
B2 months
C1.5 years
D1 year
```
6 months
Note: A broker should keep copies of documents and records for three years. This includes brokerage engagements, sales contracts, leases, closing statements and any documents for a real estate transaction.
33
Jacob Brown knows the owner of a restaurant in downtown Atlanta. The owner confides to Jake that she wants to sell her business. Luckily for the business owner, Jacob knows someone looking to buy an established restaurant. Jacob asks a real estate buddy to draw up the sales contract. Jacob asks for a commission since he was the procuring cause of the sale. However, Jacob doesn't have a real estate license in Georgia. Which of the following is true:
AJacob isn't entitled to any commission for the services of real estate.
BJacob is entitled to a commission.
CJacob can receive a kickback from the buyer or seller as long as no one on the Commission finds out.
DJacob has to buyer the restaurant himself and run it for 2 years prior to selling the property.
Jacob isn't entitled to any commission for the services of real estate.
34
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If a licensee makes an offer on a property as part of a brokerage engagement or an extension of an engagement, the terms and conditions of the engagement must be set down in a…?
Awritten agreement
Bverbal agreement
CMLS listing
DCAM agreement
```
written agreement
35
You don’t recognize a charge on your credit card made to the Georgia Real Estate Commission, so you dispute the charge. Later, you learn that the charge was valid. In addition to paying the owed fees, what other step must you take?
AYou must pay an additional $100
BYou must retake your agent exam
CYou must pay turn in your license and give up your real estate career
DYou must pay an additional $500
You must pay an additional $100
36
Dalton White was a broker in Florida for two years prior to moving to Georgia. The Florida Real Estate Commission shows no record of Dalton’s broker license. Which of the following actions can validate his experience?
AHe submits sales and closing documents he has handled in the last two years. He asks three brokers he has dealt with to submit affidavits of his participation in transactions with them.
BHe submits sales and closing documents he has handled five years ago.
CHe asks three friends to write letters of recommendation to the GREC.
DDalton cannot validate his experience from Florida.
He submits sales and closing documents he has handled in the last two years. He asks three brokers he has dealt with to submit affidavits of his participation in transactions with them.
Note: This requirement is covered under Rule 520-1-.04(2) of the Georgia Rules and Regulations.
37
If you serve in the army reserve and are studying to be a broker, you effectively get 10 points added to your score. Which of the following is true?
A5 points are added in each of Information Gathering and Decision Making sections.
B10 points are added in each of Information Gathering section.
C10 points are added in each of Decision Making section.
D20 points are added in each of Information Gathering and Decision Making sections.
5 points are added in each of Information Gathering and Decision Making sections.
38
```
Any …......... must include its certificate of authority issued by the Secretary of State's office.
Alimited liability company, or LLC,
Bcorporation
Cpartnership
Dfranchisee
```
limited liability company, or LLC,
Note: This requirement is covered under Rule 520-1-.04(6) of the Georgia Rules and Regulations.
39
The Georgia Real Estate Commission may do all the following except…?
AParticipate in various real estate transactions
BSanction a licensee
CDetermine fees for license renewals
DExamine the trust accounts of any real estate professional
Participate in various real estate transactions
40
When the Commission determines it is necessary to investigate or examine a brokers’ trust account, they…?
AMay hire outside help to conduct the examination
BMust notify the licensee 30 days ahead of time
CMust work closely with the licensee accused of wrongdoing
DNotify the local police department
May hire outside help to conduct the examination
41
License applications where the applicant has a prior felony on their criminal record…?
AMay be approved provided all conditions laid out by the Commission are satisfied
BShall never be approved
CCan be approved even if the license applicant is on probation
DCan be approved once the applicant has completed their jail or probation time
May be approved provided all conditions laid out by the Commission are satisfied
42
Anyone who is a qualified broker…?
AShould understand their license is at risk if they have an affiliate broker working for them who does something wrong
BShould be aware their license is only at risk if they do something wrong
CMay not operate an office where they are the sole proprietor
DDoes not have to notify the Commission of any address change
Should understand their license is at risk if they have an affiliate broker working for them who does something wrong
43
When taking funds from a client for deposits, prepaid taxes or insurance, or for any other reason a licensee…?
AMust keep the funds segregated by opening a separate trust or escrow account
BCan use the funds as they deem appropriate
CCan put the funds in their regular business account
DDoes not have to do anything special
Must keep the funds segregated by opening a separate trust or escrow account
44
If a licensee mishandles funds in a trust account, they shall…?
ABe responsible for repayment of any claims paid by the Georgia recovery fund along with interest and penalties
BLose their real estate license permanently
CBe required to get a surety bond before they collect any funds from clients in the future
DBe fined $25,000
Be responsible for repayment of any claims paid by the Georgia recovery fund along with interest and penalties
Note: When a licensee is found to have acted improperly resulting in a claim being filed and paid by the Commission, they shall have no access to a new license until such time as the licensee has repaid the amount in full, plus interest at the judgment rate.
45
Should any licensee be accused of fraudulent representation the Commission may…?
AConduct a thorough investigation including a review of their books and trust accounts
BPublish their name in the newspaper
CNot be able to take any action
DGo to court to sue the licensee
Conduct a thorough investigation including a review of their books and trust accounts
46
Contracts issued to potential buyers or sellers must…?
AContain a start and finish date, be in compliance with Georgia law, and disclose any conflicts of interest
BTell the buyer or seller what the licensee thinks they need to know
CNot include information about deposits or possible fees that may result if the transaction is complete
DBe approved in a Georgia court
Contain a start and finish date, be in compliance with Georgia law, and disclose any conflicts of interest
47
To participate in real estate transactions in Georgia you…?
AMust have an active Georgia license or be otherwise approved by the Commission
BMust have a legitimate place of business and only work from there
CCan do a limited amount of transactions without a license
DCan act on behalf of a licensed broker without telling anyone
Must have an active Georgia license or be otherwise approved by the Commission
48
To maintain a real estate license in Georgia, you must…?
AFollow all rules laid out by the Georgia real estate Commission
BNot move out of Georgia
CContinue to operate in the same office
DNot do anything wrong
Follow all rules laid out by the Georgia real estate Commission
49
Upon issuance of a license, a real estate professional can…?
AExpect the license to be delivered to the broker whom the licensee shall be working for
BDecide what form you want your license delivered in (e.g. paper or electronic)
CHave the license mailed to any address they want
DPick the license up at the Commission’s office
Expect the license to be delivered to the broker whom the licensee shall be working for
50
Christine is looking at an older home in a quiet neighborhood. She knows that it might be hard to repair or replace the dwelling if it was directly hit by a tornado or there was a fire. The best homeowner policy for her is probably an HO-8 policy specifically designed for older homes. Which statement most accurately gives an overview of the Older Home Coverage?
AThe plan doesn't cover water damage without an additional rider, but pays the actual cash value minus depreciation.
BThe plan covers full replacement value, plus all known perils, including water damage.
CThe plan typically has an extremely high deductible because older homes are prone to spontaneous fires.
DThe plan includes special coverage for manufactured homes and condos more than 30 years old.
The plan doesn't cover water damage without an additional rider, but pays the actual cash value minus depreciation.
Note: The HO8 home insurance policy is normally used to insure older homes that would be extremely difficult to replace if destroyed. As a result, the HO8 policy normally insures your home at market value, or replacement cost. Market value can also be referred to as actual cash value.
51
Gene is showing homes to a first-time buyer in an area that is prone to floods. The client tells him he likes the houses, but he has already lost two homes to floods and doesn't think he will be able to afford insurance. Gene tells his client there is an option called the ............ specifically designed for his situation.
AThe Fair Access to Insurance Requirement (FAIR) program
BFEMA's Minimum Coverage for Flood-prone Designations plan
CHome & Land Flood Protection Plan
DThe High Risk Flood Zone program
The Fair Access to Insurance Requirement (FAIR) program
Note: The Fair Access to Insurance Requirements (FAIR) Plan is a state-mandated program that provides fair access to insurance for individuals who are having trouble insuring their property due to the fact that insurers consider them high risk.
52
Which list below covers the three most common homeowner policy coverage areas?
ABuildings, building contents, and medical coverage for people who are hurt on your property
BStructures, land, and landscaping, and medical liability
CBuilding, land, and building contents
DNone of the answer choices provided are correct
Buildings, building contents, and medical coverage for people who are hurt on your property
Note: Building damage, a person's belongings, and medical coverage are the most common.
53
Many factors can increase or reduce monthly mortgage payments. Assume that a buyer is planning to buy a $150,000 home, and any loan payments will not include closing costs or insurance. Which scenario will produce the highest monthly payment?
ATaking out a 20 year fixed rate private owner mortgage at 4.25 percent with 5 percent down
BTaking out a 30 year fixed rate FHA mortgage at 4.25 percent with a 3.5 percent down payment
CTaking out a 30 year fixed rate VA mortgage at 5.75 percent with zero down
DTaking out a 30 year fixed rate Conventional mortgage at 6.0 percent with a 20 percent down payment
Taking out a 20 year fixed rate private owner mortgage at 4.25 percent with 5 percent down
Note: The longer the loan term, the lower the monthly payment. This may be offset by the loan's interest rate. The higher the interest rate, the higher the monthly loan payment.
54
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Candice wants to buy a new home. She doesn't have a lengthy credit bureau file and is looking for a loan vehicle that will not require a large down payment. She is surprised to learn that the ............ considers non-borrower income and nontraditional credit sources when reviewing mortgage applications.
AFannie Mae HomeReady mortgage program
BVA financing program
CConventional loan standards
DFresh Start Home Buyers Program
```
AFannie Mae HomeReady mortgage program
Note: HomeReady mortgages are a line of conventional home loans offered by Fannie Mae that are meant to help low- and moderate-income borrowers buy or refinance. HomeReady loans reduce the typical down payment and mortgage insurance requirements, but they're also more flexible about allowing contributions from other people.
55
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A seller has accepted an offer from John. John wants to remodel and add an outdoor pool when he has enough equity built up to cover the project. Which loan arrangement will help him build equity faster than the others?
AMake a 40 percent down payment upfront.
BNegotiate the highest interest rate.
COpt for a shorter loan term.
DOwner finance to avoid PMI.
```
Make a 40 percent down payment upfront.
Note: If John makes a 40% down payment, he will already have a significant amount of equity in the property.
56
Which statement is true of PMI?
APMI is usually only required on conventional loans with a down payment less than 20%, or if the buyer wants to refinance a home with less than 20% equity built up.
BPMI is typically required for loans processed with a minimal down payment.
CPMI is equally divided among all installment payments for the life of the loan.
DHomeowners purchase PMI through independent agents and make separate payments directly to the insurance company.
PMI is usually only required on conventional loans with a down payment less than 20%, or if the buyer wants to refinance a home with less than 20% equity built up.
Note: PMI is a mortgage guaranty insurance available to conventional lenders on the first, high risk portion of a loan. PMI is typically required on conventional loans with a down payment of less than 20%.
57
Katlin told her real estate agent that she is looking for an investment property. She recently took a class on buying low and selling high, so she plans to buy a home in a low-income neighborhood, furnish it with high-end appliances and all the latest in home technology. Her real estate agent cautions her against this strategy, because...?
AOver renovating doesn't guarantee a quick and high-profit turnover.
BBuyers are suspicious of a home that looks too nice for the neighborhood.
CShe may make the neighbors mad if her rehabilitation forces their property value down.
DOnly market conditions increase property values.
Over renovating doesn't guarantee a quick and high-profit turnover.
Note: Not all improvements will increase the value of the property beyond the cost of the improvements.
58
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Patty is working with a commercial real estate investor. While touring an older manufacturing property, the client mentions much of the equipment will have to be updated in a few years because it is fast becoming obsolete. Which depreciation method did Patty most likely bring up during this discussion because it depreciates assets based on wear and tear, obsolescence, and damage?
AAlternative Depreciation System
BGeneral Depreciation System
CStraight-line method
DAccelerated Depreciation
```
Alternative Depreciation System
Note: The alternative depreciation system is commonly used for equipment.
59
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Mortgage lenders generally require a policy that covers specific perils for structures and dwellings at full replacement value, without depreciation. However, they do not require coverage for...?
AContent
BFire damage
CFlood damage
DWind damage
```
Content
Note: Lenders are more concerned with the property itself. They want to ensure the value of the property will be maintained. For this reason, lenders do not require insurance for personal property.
60
How does a lien holder place a lien on movable property?
AFiling a UCC-1 statement with the appropriate state authority.
BDisplaying a sign on the home.
CLiens cannot be placed on movable property.
DMovable property is usually included with the mortgage.
Filing a UCC-1 statement with the appropriate state authority.
61
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Student dorms, nursing homes, and on-campus fraternity houses are considered...?
ATemporary housing
BLow-rent options
CMixed-use housing
DPublic housing
```
Temporary housing
Note: These are examples of temporary housing since the tenants are not staying long-term.
62
The comprehensive plan must balance the needs of current residents with...?
AThe financial interest of developers and future residents
BNeighboring cities' expansion goals
CFederal migration regulations
DShrinking municipal budgets
The financial interest of developers and future residents
Note: The financial interests of the residents must be taken into account. The remaining answer choices will not apply to a comprehensive plan.
63
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The "bulk" of a building is also known as the...?
ABuilding envelope
BFloor area ratio
CLot area
DZoning district
```
Building envelope
Note: The bulk regulations determine the building envelope for a property.
64
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That portion of a zoning lot, which when viewed from above, is covered by a building, is known as...?
ALot coverage
BFloor area ratio
CLot area
DBuilding envelope
```
Lot coverage
Note: This question refers to the definition of lot coverage.
65
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When a building fully complies with the local zoning ordinances, it is referred to as...?
AAs-of-right
BNon-conforming
CConventional
DProper
```
As-of-right
Note: An as-of-right building fully complies with the local zoning ordinances.
66
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What is the maximum allowed buildable square footage on a property if the property measures 10,000 square feet, and the maximum permitted floor area ratio is 4.0?
A40,000 sq.ft.
B4,000 sq.ft.
C400 sq.ft.
D40 sq.ft.
```
40,000 sq.ft.
Note: You can find the maximum buildable square footage of a property by multiplying the lot area by the floor area ratio. In this example, the lot measures 10,000 sq.ft., with an FAR of 4.0. 10,000 x 4.0 = 40,000 sq.ft.
67
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Who is responsible for assuming the financial burden and oversight of the construction of all roadways, sidewalks, alleys, nature trails, and other non-residential areas within a new subdivision?
AThe developer
BThe local economic development council
CFuture owners
DTaxpayers through municipal bonds
```
The developer
Note: The developer is typically responsible for building the infrastructure for a sub-division. This includes roads and landscaping.
68
The …………. helped the insurance industry develop a survey for municipalities to establish building guidelines in the early 20th century.
ANational Board of Fire Underwriters (NBFU)
BAssociation of National Insurers
CAssociation for Cooperative Operations Research and Development (ACORD)
DInternational Building Code Board Members
National Board of Fire Underwriters (NBFU)
Note: Early versions of building codes focused primarily on fire protection. This led to the creation of the NBFU.
69
Meghan is negotiating a deal to buy an abandoned property “as is” from a mortgage company. Her agent advises her to ask the seller to remove some old metal drums with an unknown liquid in them, which have been stored in a shed. Her reasoning is that...?
APeople who transport substances on the EPA's National Priorities List may be subject to penalties and fines.
BShe is concerned about the cost of disposal.
CThe agent is a tough negotiator and is trying to save Meghan time and money.
DThe mortgage company is required to deliver the home ready for occupancy.
People who transport substances on the EPA's National Priorities List may be subject to penalties and fines.
Note: Previously used tanks should be verified to ensure they do not contain harmful substances.
70
Which EPA regulation covers water sources like lakes, rivers, springs, streams, and underground wells?
AThe Safe Water Drinking Act (SWDA)
BCERCLA
CThe Resource Conservation and Recovery Act (RCRA)
DThe Clean Water Act
The Safe Water Drinking Act (SWDA)
Note: The SWDA was enacted in 1974 and is the principal federal law in the United States intended to ensure safe drinking water for the public. Pursuant to the act, the Environmental Protection Agency (EPA) is required to set standards for drinking water quality and oversee all states, localities, and water suppliers that implement the standards.
71
Congress passed the Interstate Federal Land Sales Full Disclosure Act in response to...?
AGrowing concerns over fraudulent and deceptive marketing practices by developers
BForeign investors failing to meet contractual obligations
CFluctuating currency rates
DPublic demand for more oversight in the real estate sector as a whole
Growing concerns over fraudulent and deceptive marketing practices by developers
Note: When purchasing a property out-of-state, the buyer may not obtain all of the information needed to make an informed decision. This lead to more fraudulent acts by developers, which ultimately lead to the creation of the Interstate Federal Land Sales Full Disclosure Act.
72
Certain industrial and commercially zoned properties are exempt from ISLA rules, providing all of the following conditions are met, with the exception of...?
AThe buyer agrees to pay an exemption fee in the amount equal to 5% of the purchase price.
BThere is at least one public road access into the property approved by local authorities.
CThe lessee or purchaser must show proof of being a legally organized business entity prior to recording a deed or executing a lease.
DThe purchaser must attest in writing the property will be used solely for non-residential activity.
The buyer agrees to pay an exemption fee in the amount equal to 5% of the purchase price.
73
Mitchell has decided to sell a home in a covenanted community with HOA bylaws. A potential buyer has a family member who is hearing impaired and is concerned about traffic hazards. The buyer would like to learn if there are options to improve community safety. Which governing body has jurisdiction over roadway signage, traffic control devices, and speed limits?
AAll of the answer choices provided are correct
BHOA board members
CDepartment of Transportation Standards
DMunicipal Code Enforcement
All of the answer choices provided are correct
Note: All of the answer choices provided have jurisdiction.
74
```
Which document establishes the mechanism for transferring ownership to the first buyers, and all subsequent buyers?
AThe plat
BA warranty deed
CA quitclaim
DA bill of sale
```
The plat
Note: This question refers to the definition of a plat.
75
```
With only a few exceptions, structures built with only wood have a maximum height of...?
A2 floors
B3 floors
C1 floor
DThere is no limit
```
2 floors
Note: Generally speaking, wood-framed buildings are limited to 2 floors. There are some exceptions if the building includes a sprinkler system.
76
The EPA was originally established to...?
AStem the escalating negative impact on human health and the natural environment.
BRemediate hazardous dump sites
CProhibit the use of lead paint
DMonitor green building initiatives
Stem the escalating negative impact on human health and the natural environment.
Note: The EPA was established in 1970 and is responsible for maintaining and enforcing national standards under a variety of environmental laws.
77
```
Which ISLA exemptions apply to individual lots?
ARegulatory exemptions
BPartial exemptions
CFull statutory exemptions
DZoning exemptions
```
Regulatory exemptions
Note: Regulatory exemptions apply to individual lots.
78
```
If a proposed building does not comply with the dimensional requirements of the zoning resolution, which of the following must be obtained?
AArea variance
BUse variance
CConforming variance
DNon-conforming variance
```
Area variance
Note: A variance must be obtained to build anything that does not comply with the local zoning ordinances.
79
```
Every development must comply with local ordinances. Which agency/official typically sets per-capita parking space requirements?
AZoning Office
BFire Marshall
CBuilding & Permit Office
DDepartment of Transportation
```
Zoning Office
Note: Parking space requirements are set forth by the local zoning office, and spelled out in the zoning ordinances.
80
```
According to the ADA, what is the minimum height requirement of handrails on ramps?
A34 inches
B28 inches
C24 inches
D48 inches
```
34 inches
81
Fire stairs in a building will typically exit to the…?
ABuilding's lobby
BFloor below
CBasement
DAll of the answer choices provided are correct
Building's lobby
Note: Fire stairs almost always exit to the building's lobby or the street itself.
82
What was the primary EPA objective in establishing the Clean Water State Revolving Fund?
ATo empower states to proactively manage water quality.
BTo increase federal authority over state development and building expansion near navigable waters.
CTo modernize wastewater treatment plants.
DTo reduce the manufacture and sale of harsh chemicals.
To empower states to proactively manage water quality.
Note: The CWSRF is a federal-state partnership that provides communities a permanent, independent source of low-cost financing for a wide range of water quality infrastructure projects.
83
```
Becca, a real estate agent who serves a semi-rural area, recently learned that ............ of all post office locations are owned by individuals and leased back to the USPS. This information may be helpful when she works with investors looking for a stable, guaranteed return on investment.
A75 Percent (%)
B63 Percent (%)
C100 Percent (%)
D50 Percent (%)
```
75 Percent (%)
84
Congress passed the Interstate Federal Land Sales Full Disclosure Act in response to...?
AGrowing concerns over fraudulent and deceptive marketing practices by developers
BForeign investors failing to meet contractual obligations
CFluctuating currency rates
DPublic demand for more oversight in the real estate sector as a whole
Growing concerns over fraudulent and deceptive marketing practices by developers
Note: When purchasing a property out-of-state, the buyer may not obtain all of the information needed to make an informed decision. This lead to more fraudulent acts by developers, which ultimately lead to the creation of the Interstate Federal Land Sales Full Disclosure Act.
85
The EPA was originally established to...?
AStem the escalating negative impact on human health and the natural environment.
BRemediate hazardous dump sites
CProhibit the use of lead paint
DMonitor green building initiatives
Stem the escalating negative impact on human health and the natural environment.
Note: The EPA was established in 1970 and is responsible for maintaining and enforcing national standards under a variety of environmental laws.
86
What is the maximum time period a fee simple estate holder has rights over their property?
AThere is no time limit or fixed duration
B99 years
CFor their lifetime
D50 years
There is no time limit or fixed duration
Note: The owner of a fee simple state fully owns the property until they sell. Unlike most leasehold estates, a fee simple estate does not have a time limit.
87
What is an example of a term that could be included in a deed to create a fee simple determinable estate?
AAll of the answer choices provided are correct
BUntil
CSo long as
DDuring
All of the answer choices provided are correct
Note: All of the answer choices provided may create a fee simple determinable estate since a time limit to the estate is implied.
88
```
Which of the following words would probably not indicate a fee simple determinable estate?
ABecause
BAs long as
CUntil
DDuring
```
Because
Note: A fee simple determinable estate will include words that suggest a time limit to ownership of the estate. This may include words such as, "as long as", "until", "during" or "so long as". The word "because" does not suggest a fee simple determinable estate.
89
```
Life estates are generally created by a...?
ADeed
BCourt order
CLien
DTrust
```
Deed
Note: Life estates are transferred using a deed (which restrictions included in the deed). This is because a life estate still includes the transfer of real property. Real property is transferred using a deed.
90
```
Eminent domain can also be called…?
AAll of these are true
BExpropriation
CAppropriation
DCondemnation
```
All of these are true
91
```
Which of the following is not one of the three prongs that must be present to create a fee simple estate?
AReversionary
BAlienable
CDevisable
DDescendible
```
Reversionary
92
```
What is the term that describes an increase in property owners' rights because the land is gradually worn away by natural forces?
AErosion
BAccretion
CAccession
DAvulsion
```
Erosion
Note: This question refers to the definition of erosion.
93
```
Accession by natural forces is known as…?
AAccretion
BAccession
CAvulsion
DErosion
```
Accretion
Note: This question refers to the definition of accretion.
94
```
Which of the following does not have the authority to tax real estate?
AThe Federal government
BState government
CCounty government
DMunicipal government
```
The Federal government
Note: Real estate is taxed at the state or local levels, not at the federal level.
95
```
In most states, it is assumed that a property owner intends to transfer fee simple absolute ownership without including…?
ASpecial language in the will
BRights to personal property
CFiduciary rights
DA trustee's deed
```
Special language in the will
Note: Unless stated otherwise in the deed, it is assumed that title is being transferred as a fee simple absolute estate.
96
```
The person who retains the life estate interest is called the?
ALife tenant
BRemainderman
CTrustee
DLessor
```
Life tenant
Note: This question refers to the definition of a life tenant.
97
```
A life estate based on someone else's lifetime is called a...?
APer autre vie life estate
BRevocable life estate
CIrrevocable life estate
DRemainderman's interest
```
Per autre vie life estate
Note: This question refers to the definition of per autre vie, which means "for the life of another".
98
```
In a life estate, the …..........grants the property to a life tenant.
AGrantor
BRemainderman
CGrantee
DLessor
```
Grantor
Note: The life tenant receives the property from the grantor. After the life tenant passes away, the property either goes to the remainderman, or reverts back to the grantor as an estate in reversion.
99
In most states, the assessed value for taxes is determined by…?
AThe most recent sale of the property, with an annual inflation adjustment
BAn annual appraisal
CAn annual property inspection
DInsurance protection
The most recent sale of the property, with an annual inflation adjustment
Note: Assessed values are commonly readjusted each time a property is sold. This is because a recent sale of the property correlates to its current market value.
100
```
A person who has a future interest in a life estate is known as/an…?
ARemainderman
BGrantee
CLife tenant
DGrantor
```
Remainderman
Note: This question refers to the definition of a remainderman.
101
```
What type of lien means that the lien is attached to a piece of real estate?
ASpecific lien
BStatutory lien
CSubsequent lien
DStakeholder's lien
```
Specific lien
Note: Remember, specific liens are attached to only one property, while general liens may attach to more than one property.
102
```
Equitable liens are also called…?
AJudgment liens
BEqual liens
CStatutory liens
DVoluntary liens
```
Judgment liens
Note: A court judgment creates an equitable lien on a property, which allows the plaintiff to recoup the money owed to them. A judgment lien is also known as an equitable lien.
103
```
Judgement liens are also called…?
AEquitable liens
BEqual liens
CStatutory liens
DVoluntary liens
```
Equitable liens
Note: Equitable liens are created by court orders. This is different from statutory liens, which are created by individuals or banks, such as a mechanic's lien or mortgage lien.
104
```
The type of easement that gives permission to physically cross a piece of real property is called…?
AAffirmative easement
BNegative easement
CDominant easement
DServient easement
```
Affirmative easement
Note: This question refers to the definition of an affirmative easement.
105
```
When one neighbor has been improperly using another neighbor's property for a long time, it is possible that the court could find…?
AAdverse possession
BExpress encroachment
CEncroachment by prescription
DAdverse encroachment
```
Adverse possession
Note: This question refers to the definition of adverse possession.
106
A leasehold estate is considered to be a…?
APersonal property interest
BReal property interest
CBoth real and personal property interest
DThere is no property interest for a leasehold estate
Personal property interest
Note: This question refers to the definition of a leasehold estate.
107
If the language of an estate at will lease says tenancy continues at the will or desire of the tenant, under what circumstances can the landlord terminate the lease?
AThe landlord may not be able to terminate the lease
BThe tenant does not pay rent
CThe tenant damages the property
DThe tenant violates a "no pets" provision of the lease
The landlord may not be able to terminate the lease
Note: An estate at will lasts for an indefinite period of time.
108
```
Which of the following is not a required component of a lease contract?
AEviction clause
BOffer
CAcceptance
DConsideration
```
Eviction clause
Note: An eviction clause in not required in a lease. The remaining answer choices are requirements of any valid contract, including a lease.
109
One benefit of using a "confession of judgment" provision in a commercial lease is that...?
AThe tenant has waived their right to notices and court hearings
BThe landlord must go to court to evict a non-paying tenant
CA tenant can only be evicted through a court judgment
DIt's harder and more expensive for a landlord to evict a tenant
The tenant has waived their right to notices and court hearings
Note: A confession of judgment is a written agreement, signed by the tenant, that accepts the liability and amount of damages that was agreed on. A confession of judgment is a way to circumvent normal court proceedings and avoid a lengthy legal process to resolve a dispute. Signing such a confession forfeits any of the rights the tenant has to dispute a claim in the future.
110
```
What type of leasehold estate exists when a tenant didn't renew their lease but didn't move out when the lease ended?
AEstate at sufferance
BEstate for years
CPeriodic estate
DEstate at will
```
Estate at sufferance
Note: This question refers to the definition of an estate at sufferance.
111
Under a sublease, who is responsible for making rent payments every month?
AThe original tenant
BThe new tenant
CBoth the original tenant and the new tenant
DThe lease provisions determine who is responsible
The original tenant
Note: In a sub-lease, the original tenant is still responsible for the new tenant. In an assignment of lease, the new tenant will be responsible for paying rent to the landlord.
112
```
If a tenant agrees to pay rent, property taxes and insurance premiums, what type of lease do they have?
ADouble net lease
BTriple net lease
CGross lease
DSingle net lease
```
Double net lease
Note: In a single net lease, the tenant only pays rent and property taxes. In a double net lease, the tenant also pays for insurance. In a triple net lease, the tenant pays for everything, including maintenance costs.
113
```
Which of the following occurs when a tenant doesn't uphold their end of the agreement?
AActual eviction
BElective eviction
CConstructive eviction
DJudgment eviction
```
Actual eviction
Note: Remember, actual eviction is associated with the tenant breaching the lease, while constructive eviction is associated with the landlord breaching the lease.
114
```
When the lease in an estate for years ends, what type of leasehold estate exists?
APeriodic estate
BIt is still an estate at years
CEstate at will
DEstate at sufferance
```
Periodic estate
Note: An estate for years without a termination date becomes a periodic estate.
115
```
What is another term for an estate at sufferance?
AHoldover tenancy
BFixed term tenancy
CTenancy for years
DMonth-to-month tenancy
```
Holdover tenancy
Note: A holdover tenant occupies a property as an estate at sufferance.
116
```
Who is responsible for making sure local ordinances about occupancy controls are met when a property owner leases space to a tenant?
AProperty owner/landlord
BTenant
CCity government officials
DBoth the property owner and the tenant
```
Property owner/landlord
Note: As the owner of the property, the landlord is still responsible for satisfying any local occupancy control ordinances.
117
What type of lease gives a lessee the rights to oil and gas under the lessor's land?
AOil & gas lease
BGround lease
CEither an oil & gas lease or a ground lease
DGross lease
Oil & gas lease
Note: As the name implies, this refers to an oil & gas lease. An oil & gas lease only includes mineral rights.
118
What is the usual effect of an estate at will tenant committing waste against the property (whether intentional or not)?
AThe estate at will is terminated
BNothing. Because the leasehold estate is at will, there are no consequences.
CThe estate at will continues, but the lessor can double the rent.
DThe estate at will continues, but the lessee must arrange for and pay for repairs
The estate at will is terminated
Note: Any tenant cannot damage the property. Doing so can lead to their lease being terminated.
119
If a tenant is late with their rent and the landlord initiates eviction proceedings, what happens if the tenant pays their overdue rent?
AThe landlord may choose to accept the late rent and stop eviction, but is not required to do so.
BThe landlord may not accept late rent once eviction proceedings have begun.
CThe landlord is required to accept the late rent payment and stop eviction proceedings.
DThe tenant may not pay late rent after receiving notice of an eviction action.
The landlord may choose to accept the late rent and stop eviction, but is not required to do so.
Note: Section 22(a) documents the amount of any fees the tenant will need to pay to the landlord to stop the eviction process. For example, a landlord who initiated eviction because a tenant’s rent was late may decide to accept a late rent payment and stop the eviction proceeding before the court date. In that case, the landlord may charge the fee noted in this section.
120
```
For any utilities that the tenant is responsible for under section 11 of the Lease agreement, how many banking days after the start of the lease does the tenant have to arrange to connect and pay for such utilities?
AThree days.
BTen days.
CTwenty days.
DThirty days.
```
Three days.
Note: If the landlord intends to pay for some of the utility costs for the leased property, they should document which utilities are included in section 11. For any utilities that are the tenant’s responsibility, the tenant must arrange to connect and pay within three banking days of the lease start date. The tenant is responsible for ensuring those utilities remain connected through the lease termination date.
121
Which of the following statements about landlords' fees is not true?
ALandlords can charge tenants reasonable and customary fees, even if not specified in the lease agreement.
BIf documented in section 6 of the agreement, the landlord can charge tenants fees to re-key the locks after tenants move out.
CA landlord can charge a tenant a separate, one-time, non-refundable administrative fee under the lease agreement.
DLandlords may want to consider the costs of changing mailbox keys and replacing access cards when determining the amount of any re-key fees.
Landlords can charge tenants reasonable and customary fees, even if not specified in the lease agreement.
Note: The landlord can require the renter to pay a fee to change the locks after the end of the lease. This “re-key” fee should be documented in section 6. When setting this fee, landlords should also consider the costs of changing mailbox locks or changing/replacing access key cards after a tenant vacates the property. Section 7 is a spot to include an extra dollar amount the tenant will pay to the landlord as a one-time, non-refundable administrative fee.
122
```
How can an estate at will be terminated?
AAll of these are true
BThe landlord transfers or sells the property to someone else
CThe landlord dies
DThe tenant dies
```
All of these are true
123
When an oil and gas lease is set to expire, but drilling is underway, what usually happens?
AThe lease will remain in effect
BThe lease immediately terminates and the lessee must halt operations
CThe lessee has 30 days to halt operations
DThe lessee has 45 days to halt operations
The lease will remain in effect
Note: The lease generally will remain in effect to allow the lessee to complete their work.
124
Under which of these scenarios would using a percentage lease make the most sense?
ATenant is a coffee shop in a strip mall
BTenant is an individual leasing an apartment
CTenant is a big box store looking for a new location
DLessee is an oil and gas company wanting to expand drilling
Tenant is a coffee shop in a strip mall
Note: A percentage lease is commonly associated with commercial retail tenants. In this type of lease, the landlord receives a percentage of the tenant's revenue in exchange for a lower fixed rent.
125
```
According to …............, the landlord is not liable for damages resulting from third party negligence, or the fault of the tenant.
ATort liability
BParol contract
CTenancy at will
DDispossessory proceedings
```
Tort liability
Note: Section 14 of Article 1, called Tort Liability, releases the landlord from damages resulting from third party negligence, or the fault of the tenant, so long as they are not the result of faulty construction or negligence of maintenance or repairs.
126
```
The tenant has the right to inspect the property for …........business days after moving out.
A5
B1
C3
D10
```
5
Note: The landlord or agents is required to inspect the property within 3 days of the tenant moving out. The tenant is given 5 days to inspect the property.
127
```
If a tenant refuses to vacate the premises and deliver possession to the landlord, the landlord may sear an …........before the appropriate judge.
AAffidavit
BWrit of possession
CEviction notice
DForeclosure
```
Affidavit
Note: If the tenant does not vacate the premises and deliver possession to the landlord then the landlord may swear an affidavit before the appropriate judge or notary public of the facts of the case. This is covered in Article 3 of the Act.
128
```
Seizing property because money is owned is known as…?
ADistrain
BEviction
CCondemnation
DDistress
```
Distrain
Note: This question refers to the definition of a distrain, which is spelled out in Section 70 of Article 4 of the Act.
129
```
According to Article 4 of the Act, the landlord has the power to ……......immediately if the tenant tries to remove property at the time that they owe rent.
ADistrain
BEvict
CForeclose
DSell
```
Distrain
Note: Section 70 of Article 4 of the Act gives the landlord the power to "distrain" immediately if the tenant tries to remove property at the time that they owe rent. Distrain means seizing property because money is owed.
130
```
Article 4 of the Act deals with…?
ADistress Warrants
BSecurity deposits
CDispossessory proceedings
DCroppers
```
Distress Warrants
Note: The Georgia Residential Landlord-Tenant Act comprises of five Articles. Article 1 is titled "In General". Article 2 deals with security deposits. Article 3, which is titled "Dispossessory Proceeding", regulates the eviction process. Article 4, which is titled "Distress Warrants", also relates to the eviction process. Article 5 is titled “Croppers” and applies to the specific relationship between a cropper and a landlord.
131
```
What is the term for a legal proceeding that officially severs co-ownership of a parcel of land or property?
APartition
BSeveralty
CA decree of descent
DDe-unification
```
Partition
Note: Partition is defined as a division of real or personal property or the proceeds therefrom among co-owners.
132
Which of the following ownership splits could indicate property is owned as tenants in common?
AAll of the answer choices provided are correct
B50/50 split
C75/25 split
D90/10 split
All of the answer choices provided are correct
Note: Since ownership interests in a tenancy in common does not have to be divided equally between the owners, all of the answer choices apply.
133
Which of the following is the least common type of real estate ownership when a married couple owns property together?
ATenancy in common
BTenancy by the entirety
CJoint tenancy with rights of survivorship
DCommunity property
Tenancy in common
Note: Married couples own property as a tenancy by the entireties or community property.
134
Who can own property in severalty?
AAn individual, a business entity, or a trust
BAn individual only
CAn individual or a business entity, but not a trust
DAn individual and a trust, but not a business owner
An individual, a business entity, or a trust
Note: Ownership in severalty is commonly associated with individuals or businesses; however, a trust may also own a property in this manner.
135
```
Property acquired by husband and/or wife during a marriage when not acquired as the separate property of either spouse is known as…?
ACommunity property
BTenancy in common
CJoint tenancy
DTenancy by the entirety
```
Community property
Note: This question refers to the definition of community property.
136
Which of the following could be structured as a cooperative?
AApartment-style building
BAll of the answer choices provided are correct
CTownhouses
DSingle-family homes
Apartment-style building
Note: A cooperative is typically associated with a multi-family building.
137
```
Under which type of ownership do individual residents have to pay a monthly maintenance fee?
ABoth condominiums and cooperatives
BCondominiums only
CCooperatives only
DNeither condominiums nor cooperatives
```
Both condominiums and cooperatives
Note: Both condo and coop owners pay a monthly fee to maintain the building and amenities.
138
Which three documents must be filed with the Georgia Land Office to create a condominium community?
APlat, floor plans and declarative statement
BFloor plans, certificate of title and occupancy certificate
CFloor plans, covenants and list of condominium owners
DDeclarative statement, plat and original land grant or survey
Plat, floor plans and declarative statement
139
What are three duties of a CAM?
AManaging social media, paying association bills, and taking meeting notes
BListing property for sale or lease, recruiting investors, financing community property
CHiring social media experts, creating press releases, hosting telethons to raise money for common area repair
DA CAM is only responsible for coordinating advertising and media relations
Managing social media, paying association bills, and taking meeting notes
Note: Some common administrative tasks that CAMs assume include: • Paying association bills • Sending meeting notices via email, paper-mail, text, telephone call or other communication channel. • Taking meeting notes • Maintaining common area elements and property • Managing social media and website platforms • Depositing payments received • Collecting assessments in person, online or through physical “drop boxes”
140
```
Bob and Cindy, a married couple, own their home. They have an equal, undivided right to sell, mortgage, transfer, or encumber their property. Which of the following describes how they own the home?
AAs joint tenants
BAs tenants in common
CAs tenants in severalty
DAs spousal tenants
```
As joint tenants
Note: Joint tenancy is defined as undivided ownership of a property interest by two or more persons each of whom has a right to an equal share in the interest and a right of survivorship.
141
```
Siblings John and Todd own a cabin together. They each own a divided piece of the overall parcel of real estate. Which of the following describes how they own the cabin?
AAs tenants in common
BAs joint tenants
CAs tenants by the entirety
DAs owners in severalty
```
As tenants in common
Note: Tenancy in common is defined as co-ownership of property by two or more persons who each hold an undivided interest, without right of survivorship.
142
When an owner of property held as joint tenants with rights of survivorship dies, what happens to the deceased owner's share?
AIt passes automatically to the remaining joint owner(s)
BIt passes automatically to the deceased person's spouse, whether or not he or she is a joint owner
CIt passes according to the deceased person's Will
DIt escheats to the state where the property is located
It passes automatically to the remaining joint owner(s)
143
How can a tenant in common transfer his or her share of real property?
ABy executing a deed of transfer or leaving the property to someone else in a Will or another testamentary device
BAll tenants in common must agree to a transfer and execute a deed
CTenants in common never have the right to transfer their ownership to someone else
DBy judicial order only
By executing a deed of transfer or leaving the property to someone else in a Will or another testamentary device
144
```
Which of the following is not a common term for the person creating a trust?
ABenefactor
BTrustor
CGrantor
DSettlor
```
Benefactor
Note: A benefactor is not associated with a trust. A trustor, or grantor, is a person who conveys title to a trustee, who holds the title for the beneficiary. A trustor is also known as a settlor.
145
```
What is a type of trust that springs into being after the grantor's death?
ATestamentary trust
BLand trust
CLiving trust
DInter vivos trust
```
Testamentary trust
Note: A testamentary trust is defined as a trust which arises upon the death of the testator, and which is specified in his or her will.
146
```
What is another common term for the "Declaration of Condominium" the developer files with the county?
AMaster deed
BDeclaration of Cooperative
CMajor Condo Deed
DCommercial deed
```
Master deed
147
Which of the following are the two types of condominium common areas?
ALimited common elements and common elements
BIndoors elements and outdoors elements
CCo-owned and privately owned areas
DResidential elements and commercial elements
Limited common elements and common elements
Note: There are two types of co-owned condominium common areas: • Limited common elements: Everything outside privately-owned units not available to everyone owner. For example, covered parking available only to some property owners, outside storage units available to those who live on a certain street with a community or people with shared balconies or terraces. • Common elements: Everything outside the privately-owned unit, including roadways, elevator shafts, roof systems, clubhouses and open parking.
148
```
Which process calculates expenses and revenue for the entire year in advance?
ABudgeting
BCashflow analysis
CAuditing
DExpense mapping
```
Budgeting
149
```
Which strategy is based on estimated necessities for the coming year?
AZero-based budgeting strategy
BHistoric data budgeting strategy
CForecasting strategy
DIncremental budgeting strategy
```
Zero-based budgeting strategy
150
The way the 36 sections are numbered is…?
AFrom right to left, then left to right in alternating lines of 6 squares
BFrom left to right, then right to left in alternating lines of 6 squares
CFrom top to bottom, then right to left
DFrom bottom to top, then left to right
From right to left, then left to right in alternating lines of 6 squares
Note: Remember that sections are numbered from right to left, top to bottom.
151
```
Jill’s buyers are reviewing the government survey of a large parcel of land and they see that it is described in squares laid out in grids. They are interested in the tract numbered 1, and they would find that on this grid in the …?
ATop right corner
BTop left corner
CBottom right corner
DBottom left corner
```
Top right corner
152
A survey can mean two things: one, the way land is measured and the area that is established, and two, …?
AThe actual blueprint showing the measurements, boundaries, and area.
BThe document that is submitted to order the measurements taken.
CThe file where the measurements are kept.
DThe process of looking carefully at the property and its details.
The actual blueprint showing the measurements, boundaries, and area.
Note: This question refers to the definition of a survey.
153
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When land is divided into 36 tracts, with each of them being a mile square section, the six-mile by six-mile squares are called…?
ATownships
BRanges
CSubsections
DTracts
```
Townships
154
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A section of land, established by a government survey, is a mile square and contains…?
A640 acres
B460 acres
C500 acres
D1,000 acres
```
640 acres
155
When a great deal of accuracy is required, the boundary lines of a property are described using metes and bounds, which refer to…?
ALength or measurements, which are metes, and boundaries, which are the bounds.
BThe meter measurements of the horizontal property lines.
CUsing two different kinds of measurements in order to confirm results.
DThe book and page where the title company keeps the information.
Length or measurements, which are metes, and boundaries, which are the bounds.
156
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The government survey system is hundreds of years old and is most commonly used in …?
AThe western U.S.
BThe eastern U.S.
CThe northern U.S.
DThe southern U.S.
```
The western U.S.
157
How do we know from a deed what property was transferred?
AThe legal description.
BWe never really know.
CIt is indicated in the Grantor section.
DIt is published after the deed is signed.
The legal description.
Note: The legal description of the property, not to be confused with the property's address, is used to verify what specific property was transferred.
158
When is an attorney's lien filed?
AWhen the owner of property owes money to their attorney for legal services.
BWhen a builder wants to collect money from a homeowner.
CWhen a bank is owed money on a mortgage.
DAttorney's liens are against the law, so nobody.
When the owner of property owes money to their attorney for legal services.
Note: As the name implies, an attorney's lien is associated with attorneys.
159
Your buyer wants to list a home as a short sale. What is your obligation?
AYou can list it, but recognize that the lender must approve the process.
BAs an agent, this isn’t your place. You tell the borrower to talk to their lender.
CYou work with the trustee to complete the process.
DYou list the home for sale like any other property.
You can list it, but recognize that the lender must approve the process.
Note: Short sales required approvals from the lender. The approval process may be a lengthy process.
160
Who pays for the foreclosure process in a judicial case?
AThe lender.
BThe homeowner is required to pay for it.
CThe trustee pays out-of-pocket.
DNo one, there is no cost involved.
The lender.
Note: The lender pays the expenses associated with the foreclosure process.
161
John visits your office, inquiring about purchasing a home. He says he’s employed, making $60,000 a year, has good credit, and wants to own a moderately priced home. He’s even found a few on the market he’s interested in. He wants you to help him close the deal. But, he doesn’t have a loan set up. He wants you, his real estate agent, to tell him what the most important factor is when selecting a loan. What do you answer?
AThe interest rate of the loan.
BWhether or not the loan will wrap closing costs into it.
CThe lender’s local history.
DWhether or not the loan is a fixed rate or adjustable rate loan.
The interest rate of the loan.
Note: The terms of the loan, including the interest rate, is important because it directly determines the monthly payment amount.
162
Are special assessments on a 'for sale' property of concern to the real estate agent?
ASpecial assessments are paid first at the time of the home’s sale, above the mortgage. Buyers may need to pay enough to cover all of these debts.
BSpecial assessments have to do with the conditions of the home.
CAn assessment is simply an evaluation of the home’s worth.
DA special assessment describes the special sale of the home.
Special assessments are paid first at the time of the home’s sale, above the mortgage. Buyers may need to pay enough to cover all of these debts.
Note: Special assessments usually take the highest priority and must be paid first.
163
```
Who is the mortgagee in a mortgage contract?
AThe lender.
BThe borrower.
CThe trustee.
DThe court system.
```
The lender.
Note: The borrower is the mortgagor, while the lender is the mortgagee.
164
In simplistic terms, what is a deed of trust?
AIt’s an IOU to the lender to repay the debt.
BIt’s an agreement to make payments.
CA deed of trust outlines the debt owed and monthly payments.
DIt’s a home loan.
It’s an IOU to the lender to repay the debt.
Note: A deed of trust involves a trustor (the borrower), a beneficiary (the lender), and a trustee who holds title to the property.
165
Christopher’s home was lost in foreclose, but no one bought it. Who gets ownership?
AThe mortgagee has the right to take possession as a REO.
BThe lender has to sell it on the market.
CThe trustee owns it.
DSince no one bought it, Christopher owns it.
The mortgagee has the right to take possession as a REO.
Note: The lender will take ownership of the house as an REO. The lender may eventually try to sell the property through a broker.
166
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What is a lien theory state?
AThe homeowner holds the deed for the property throughout the entire loan.
BThe lender holds the lien.
CA trustee holds the home’s title.
DThe lender is in control over the home.
```
The homeowner holds the deed for the property throughout the entire loan.
Note: A lien theory state involves a mortgagor and a mortgagee. The mortgagor holds title to the property, while the mortgagee holds a mortgage lien against the property.
167
Maggy told you she has a loan with an escalator clause. What does this mean for Maggy?
AIt means the lender can increase or decrease interest rates at any time with notice.
BIt means the lender can foreclose on the property at anytime.
CIt means the lender can transfer the loan at anytime.
DIt means the lender can charge additional loan fees later on.
It means the lender can increase or decrease interest rates at any time with notice.
Note: An escalation clause is defined as the right reserved by the lender to increase the amount of the payments and/or interest upon the happening of a certain event.
168
John visits your office, inquiring about purchasing a home. He says he’s employed, making $60,000 a year, has good credit, and wants to own a moderately priced home. He’s even found a few on the market he’s interested in. He wants you to help him close the deal. But, he doesn’t have a loan set up. He wants you, his real estate agent, to tell him what the most important factor is when selecting a loan. What do you answer?
AThe interest rate of the loan.
BWhether or not the loan will wrap closing costs into it.
CThe lender’s local history.
DWhether or not the loan is a fixed rate or adjustable rate loan.
The interest rate of the loan.
Note: The terms of the loan, including the interest rate, is important because it directly determines the monthly payment amount.
169
Oscar isn’t planning to live in his home for long before he moves. Is a straight loan a good option?
AYes, he will pay less in the early term and can sell the home to pay off the remaining amount later.
BYes, but there will be fees that make this an expensive offer.
CNo, he’ll pay more in interest.
DNo, he won’t qualify.
Yes, he will pay less in the early term and can sell the home to pay off the remaining amount later.
Note: Interest-only loans (also known as a straight loan) are good for the short-term. The borrower will have a lower monthly payment, but they must pay back the entire loan amount when they sell the property.
170
What is amortization?
AIt’s the mathematical calculation of the amount of interest the buyer will pay on the loan.
BIt’s the breakdown of the loan’s interest.
CA process that outlines fees the home buyer will pay to buy a home.
DNothing the borrower needs to worry about.
It’s the mathematical calculation of the amount of interest the buyer will pay on the loan.
Note: This question refers to the definition of amortization. Most home loans amortize over the life of the loan.
171
How many missed payments does it take for the lender to send a notice of default?
AAs few as one, but this depends on the state’s laws.
BTwo payments.
CIt takes 90 days for it to happen.
DIt’s up to the lender to decide.
As few as one, but this depends on the state’s laws.
Note: If a borrower stops making payments on their loan, the lender can begin the foreclosure process. The foreclosure process can even begin after the first missed payment.
172
Is a deed of trust the same as a home loan?
ANo, the deed of trust is the legal documentation of the transaction, not the loan itself.
BNo, the home loan is the same as a mortgage.
CYes, the two are the same thing.
DYes, but they are different in some states.
No, the deed of trust is the legal documentation of the transaction, not the loan itself.
Note: The deed of trust is a legal document that gives title to a trustee. The home loan is the actual financing used to purchase a house.
173
What is the lender’s cost to borrow money?
AThe cost the lender pays to borrow money to fund a loan from other banks.
BThis is the fee charged by the Federal Reserve.
CThe closing costs.
DThe interest rate.
The cost the lender pays to borrow money to fund a loan from other banks.
Note: Lenders may borrow money from other lenders at times. The lender's cost to borrow money from other lenders is usually slightly higher than the base rate set by the Federal Reserve.
174
Can an interest rate change during underwriting?
AYes, especially if not locked in.
BYes, but only when to lower it.
CNo, it’s already been approved at a specific rate.
DNo, the lender cannot legally change it.
Yes, especially if not locked in.
Note: It is always best for the borrower to lock-in an interest rate, otherwise, rates may change during the closing process.
175
What happens in a lease-purchase option?
AThe tenant lives in the property and pays the seller, and owns the property after a certain amount of time.
BIt’s just like a rental agreement.
CThe seller obtains a loan for the buyer.
DThe lease allows the borrower to live in the property, but the seller will own it until the total amount is paid.
The tenant lives in the property and pays the seller, and owns the property after a certain amount of time.
Note: A lease option (more formally Lease With the Option to Purchase) is a type of contract used in both residential and commercial real estate. In a lease-option, a property owner and tenant agree that, at the end of a specified rental period for a given property, the renter has the option of purchasing the property.
176
Should your home buyer really care where the funding from his loan comes from?
AYes, he should know who the lender is, but not be too worried about the underlying investors.
BYes, it’s important for him to make the best decisions.
CNo, your buyer should just look for low interest rates.
DNo, he should be happy he can find a loan to begin with.
Yes, he should know who the lender is, but not be too worried about the underlying investors.
Note: The buyer will want to ensure they will receive the loan on-time, at terms that work for them, and the loan will be serviced after closing on the property.
177
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James wants to choose the least affordable loan term. What should he look for?
AThe shortest term loan.
BThe longest term loan.
CThe lowest interest rate.
DThe best FHA program.
```
The shortest term loan.
Note: The shorter the loan term, the more expensive the monthly payment; however, the borrower will pay less in mortgage interest over the life of the loan.
178
If a home buyer wants an FHA loan, can he get it through a savings and loan association?
AMost offer them, but not all favor these loans.
BYes, they are required under law to offer all programs.
CSometimes, but only to low risk borrowers.
DNo, these lenders never approval FHA loans.
Most offer them, but not all favor these loans.
Note: A S&L does offer FHA insured loans, although most FHA loans are obtained through a conventional bank.
179
With a low-down payment, is a savings and loan association best for a borrower?
AIt may be one option, but these loans tend to offer only 95 percent of the home loan as financing.
BNo, these lenders require 10 percent down.
CThese lenders typically only offer conventional loans with 20 percent down.
DYes, these are VA loan lenders.
It may be one option, but these loans tend to offer only 95 percent of the home loan as financing.
Note: An S&L is still a viable option as long as they can offer the borrower loan terms that work for them.
180
What happens in a lease-purchase option?
AThe tenant lives in the property and pays the seller, and owns the property after a certain amount of time.
BIt’s just like a rental agreement.
CThe seller obtains a loan for the buyer.
DThe lease allows the borrower to live in the property, but the seller will own it until the total amount is paid.
The tenant lives in the property and pays the seller, and owns the property after a certain amount of time.
Note: A lease option (more formally Lease With the Option to Purchase) is a type of contract used in both residential and commercial real estate. In a lease-option, a property owner and tenant agree that, at the end of a specified rental period for a given property, the renter has the option of purchasing the property.
181
What is the collateral in a blanket mortgage?
AThe land itself.
BThe property built on the land.
CThere is no collateral in this case.
DWhatever asset the buyer uses to obtain the loan, such as another home’s equity.
The land itself.
Note: A blanket loan, or blanket mortgage, is a type of loan used to fund the purchase of more than one piece of real property. Blanket loans are popular with builders and developers who buy large tracts of land, then subdivide them to create many individual parcels to be gradually sold one at a time.
182
Can an interest rate change during underwriting?
AYes, especially if not locked in.
BYes, but only when to lower it.
CNo, it’s already been approved at a specific rate.
DNo, the lender cannot legally change it.
Yes, especially if not locked in.
Note: It is always best for the borrower to lock-in an interest rate, otherwise, rates may change during the closing process.
183
Angela wants a conventional loan to buy a home. What is it?
AA basic type of loan, one that is not backed by federal loan programs.
BA basic type of loan, just like an FHA or VA loan.
CConventional loans are fixed rate loans.
DThis type of loan is one for those who have larger down payments only.
A basic type of loan, one that is not backed by federal loan programs.
Note: A conventional loan is defined as a mortgage securing a loan made by investors without governmental underwriting, i.e., which is not FHA insured or VA guaranteed. This type of loan is customarily made by a bank or savings and loan association.
184
What are mortgage insurance premiums?
AA fee paid by the home buyer upfront and worth 1.75 percent of the loan amount.
BA fee paid to the Federal Housing Administration for providing the loan.
CA cost the buyer must pay with cash at the time of buying a home.
DA fee paid to cover the closing costs on the loan.
A fee paid by the home buyer upfront and worth 1.75 percent of the loan amount.
Note: MIP is paid by the borrower of an FHA loan to the lender.
185
Who owns a home in an installment land sales contract?
AThe seller maintains the legal title until the terms of the contract are met.
BThe buyer automatically gets the title.
CA title company holds the ownership.
DA third party escrow company handles it.
The seller maintains the legal title until the terms of the contract are met.
Note: Under an installment contract, the buyer gets possession of the property and makes installment payments of the purchase price over an extended period of time to the seller, who conveys legal title to property once the purchase price is fully paid.
186
If Jim doesn’t want to tell the lender about his second job, does he have to?
AHe should, since it will help him get a loan and shows honesty.
BHe only needs to share information about his debts.
CNo, he doesn’t have to do so because they only want to know about full-time work.
DYes, he is legally required to do so.
He should, since it will help him get a loan and shows honesty.
Note: A borrower must reveal all sources of income to the lender. The higher a borrower's income, the more likely they are to qualify for a larger loan.
187
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For first-tier violations under TILA, lenders can pay up to ………... in fines.
A$5,000 (Dollars)
B$25,000 (Dollars)
C$30,000 (Dollars)
D$50,000 (Dollars)
```
$5,000 (Dollars)
Note: First-tier violations may be up to $5,000.
188
```
If a commercial applicant generates more than $1 million in revenue, and asks about an adverse credit decision, the lender must provide a response within how many days?
A60
B30
C90
D120
```
60
Note: The ECOA gives the lender 60 days to respond since the case involves a commercial property that generates more than $1 million in revenue.
189
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Creditors who violate the ECOA can be held liable in an individual lawsuit for up to...?
A$10,000 (Dollars)
B$500,000 (Dollars)
C$25,000 (Dollars)
D$50,000 (Dollars)
```
$10,000 (Dollars)
Note: Violations of the ECOA may result in a fine of up to $10,000.
190
When a lender applies a neutral policy that results in certain groups being unfairly burdened or excluded, this is referred to as...?
ADisparate Impact
BOvert Evidence of Disparate Impact
CComparative Evidence of Disparate Treatment
DDiscrimination Impact Evidence
Disparate Impact
Note: Disparate impact is often referred to as unintentional discrimination.
191
```
Which of the following changes to a Closing Disclosure would trigger a new three day review period?
AA prepayment penalty is added
BA seller credit is added
CThe address is corrected
DThe settlement date is changed
```
A prepayment penalty is added
Note: Only three changes require a new three-day review: 1) The APR (annual percentage rate) increases by more than 1/8 of a percent for regular loans (most fixed-rate loans) or 1/4 of a percent for irregular loans (most adjustable loans). A decrease in APR will not require a new three-day review if it is based on changes to the interest rate or other fees. 2) A prepayment penalty is added, making it expensive to refinance or sell. 3) The basic loan product changes, such as a switch from fixed rate to adjustable interest rate or to a loan with interest-only payments.
192
```
RESPA is short for the...?
AReal Estate Settlement Procedure Act
BReal Estate Settlement Protection Act
CReal Estate Services Procedure Act
DReal Estate Settlement Pricing Act
```
Real Estate Settlement Procedure Act
193
```
How many different types of loans are covered by TILA?
A5
B4
C7
D10
```
5
Note: TILA applies to most types of consumer credit, including closed-end credit, such as car loans and home mortgages, and open-end credit, such as a credit card or home equity line of credit.
194
```
The Equal Credit Opportunity Act became law in which year?
A1974
B1989
C1991
D2001
```
1974
Note: The ECOA was enacted on October 28th, 1974.
195
```
How many times a year does a lender need to make loans in order to be subject to TILA?
A25
B30
C20
D100
```
25
Note: The lender needs to originate at least 25 loans per year.
196
Which of the following is not considered a trigger phrase under the TILA guidelines?
Ano down payment
B20% down
CLow $200 monthly payments
DOwn the home in as little as 12 payments
no down payment
Note: A trigger term is an advertised term that requires additional disclosures. Trigger terms when advertising a closed-end loan include: (1) The amount or percentage of any down payment; (2) The number of payments or period of repayment; (3) The amount of any payment; or (4) The amount of any finance charge. Stating “No down payment” does not trigger additional disclosures.
197
Which of the following is NOT true about a mortgage loan originator?
AMay work for several mortgage brokers
BMust be supervised by a mortgage broker, mortgage lender, or exemptee on a daily basis while performing mortgage functions
CMust be paid on a W-2
DMust register and maintain a valid unique identifier issued by the NMSLR
May work for several mortgage brokers
Note: A mortgage loan originator must be supervised by a mortgage broker, mortgage lender, or exemptee on a daily basis while performing mortgage functions. Furthermore, they must be employed by and work exclusively for only one mortgage broker, lender, or exemptee and must be paid using a W-2 tax form. Each licensed mortgage loan originator must register and maintain a valid unique identifier issued by the NMSLR.
198
An offense of residential mortgage fraud shall not be predicated solely upon…?
AInformation lawfully disclosed under federal disclosure laws, regulations, and interpretations related to the mortgage lending process.
BInformation contained in a mortgage loan application.
CMisrepresentations contained in documents filed with the registrar of deeds.
DDeliberate misstatements made during the lending process.
Information lawfully disclosed under federal disclosure laws, regulations, and interpretations related to the mortgage lending process.
Note: An offense of residential mortgage fraud shall not be predicated solely upon information lawfully disclosed under federal disclosure laws, regulations, and interpretations related to the mortgage lending process nor upon truthful information contained in documents filed with the official registrar of deeds of any county of this state for the stated purpose of correcting scrivener's errors, mistakes, inadvertent misstatements, or omissions contained in previously filed documents.
199
For the purpose of the Georgia Residential Mortgage Fraud Act, venue includes all of the following, except…?
AThe county where the defendant lives.
BThe county in which the residential property for which a mortgage loan is being sought is located.
CAny county in which any act was performed in furtherance of the violation.
DIf a closing occurred, in any county in which the closing occurred.
The county where the defendant lives.
Note: The county where the defendant lives is not considered a venue according to section 16-8-103.
200
According to the GFLA, a creditor may not make a home loan that finances, directly or indirectly, which of the following...?
AAny life, accident, health, or loss-of-income insurance.
BAny renovations on a home.
CA second mortgage.
DThe purchase of a second home.
Any life, accident, health, or loss-of-income insurance.
201
A refinancing transaction shall be presumed to be a flipping if all of the following are true, except…?
AA low-cost home loan refinances an existing home loan that was consummated at least ten years ago.
BThe original mortgage was originated, subsidized, or guaranteed by a government or a nonprofit organization.
CAs a result of the refinancing, the borrower will lose one or more of the benefits of the special mortgage.
DThe original loan bears a below-market interest rate or has nonstandard payment terms beneficial to the borrower.
A low-cost home loan refinances an existing home loan that was consummated at least ten years ago.
Note: A high-cost home loan used to refinance an existing home loan would be considered a flip; however, a low-cost loan will not count.
202
Refinancing loans originated by, purchased by, or assigned to the following entity shall not be presumed to be a flipping transaction…?
AGeorgia Housing and Finance Authority
BFederal Housing Administration
CDepartment of Veteran’s Affairs
DU.S. Dept. of Housing and Urban Development
Georgia Housing and Finance Authority
Note: Refinancing transactions mortgage loans originated by, purchased by, or assigned to the Georgia Housing and Finance Authority shall not be presumed to be a flipping.
203
All of the following are prohibited in a high-cost home loan, except…?
AA scheduled payment that is adjusted to the seasonal or irregular income of the borrower.
BA scheduled payment that is more than twice as large as the average of earlier scheduled payments.
CA provision that increases the interest rate after default unless it is a variable rate loan and the change is not triggered by the default or the acceleration of the indebtedness.
DTerms under which more than two periodic payments required under the loan are consolidated and paid in advance from the loan proceeds provided to the borrower.
A scheduled payment that is adjusted to the seasonal or irregular income of the borrower.
Note: Scheduled payments that are tied to the borrower's income is not prohibited.
204
Violation of the Georgia Residential Mortgage Fraud Act is a felony. If convicted, a defendant will be imprisoned for…?
ANot less than one year nor more than 10 years.
BNot less than 10 years nor more than 20 years.
CUp to one year.
DMore than twenty years.
Not less than one year nor more than 10 years.
205
For a loan processor or underwriter who is an independent contractor, which of the following is true?
AThey must obtain and maintain a mortgage broker or mortgage lender license and must have and maintain a valid unique identifier issued by the NMLSR.
BThey must obtain and maintain a mortgage broker or mortgage lender license but do not need a valid unique identifier issued by the NMLSR.
CThey do not need a mortgage broker or mortgage lender license but do need a valid unique identifier issued by the NMLSR.
DNeither a mortgage broker or mortgage lender license nor a valid unique identifier issued by the NMLSR is necessary.
They must obtain and maintain a mortgage broker or mortgage lender license and must have and maintain a valid unique identifier issued by the NMLSR.
Note: According to the GRMA, a loan processor or underwriter who is an independent contractor must obtain and maintain a mortgage broker or mortgage lender license and must have and maintain a valid unique identifier issued by the NMLSR.
206
The name of the Act that was enacted with the intent to protect the borrowers of subprime loans (loans with higher-than-market interest rates) from predatory lending practices is…?
AGeorgia Fair Lending Act
BGeorgia Truth in Lending Act
CGeorgia Borrowers Protection Act
DGeorgia Predatory Lending Protection Act
Georgia Fair Lending Act
Note: The GFLA was enacted with the intent to protect the borrowers of subprime loans (loans with higher-than-market interest rates) from predatory lending practices. Because these borrowers typically do not qualify for a conventional mortgage loan, lenders often charge excessive fees and exorbitant rates. The GFLA was passed in an attempt to curtail such practices.
207
A creditor or servicer may only charge a borrower a late payment charge if all of the following are true, except…?
AThe borrower has made late payments in the past.
BThe charge is not imposed unless the payment is past due for ten days or more.
CThe loan documents specifically authorize the charge.
DThe charge does not exceed 5 percent of the amount of the late payment.
The borrower has made late payments in the past.
Note: A creditor or servicer may not charge a borrower a late payment charge unless: o The loan documents specifically authorize the charge AND o The charge is not imposed unless the payment is past due for ten days or more AND o The charge does not exceed 5 percent of the amount of the late payment.
208
With regard to late payments, all of the following are true, except…?
AThe amount of a late payment can increase the longer the payment remains late.
BA late payment charge may not be imposed more than once for the same late payment.
CA lender may apply any payment made in the order of maturity to a prior period's payment due even if the result is late payment charges accruing on subsequent payments due.
DIf a late payment charge is deducted from a payment made on the home loan and such deduction results in a subsequent default on a subsequent payment, no late payment charge may be imposed for such default.
The amount of a late payment can increase the longer the payment remains late.
Note: The amount owed for a late fee cannot exceed 5% of the late payment.
209
Which of the following is NOT exempt from the licensing requirements of the GRMA?
AA real estate salesperson
BA federally insured bank
CU.S. Department of Housing and Urban Development (HUD)
DA non-profit making mortgage loans to promote homeownership
A real estate salesperson
Note: A real estate salesperson is not exempt.
