Real Estate Finance 9th edition John P. Wiedemer, ‎ Keith J. Baker - Solutions

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What is the difference between the equity of redemption and statutory redemption?
What dangers are encountered by mortgagees and unreleased mortgagors when property is sold “subject to” a mortgage?
Explain the difference between a buyer assuming the mortgage and taking title “subject to” the mortgage.
Name possible mortgage able interests in real estate and comment on their risk as collateral to lenders.
Ms. Brown purchased a property consisting of one acre of land and a building for $100,000 five years ago. She obtained an $80,000 mortgage loan from ABC Bank at that time. The building was very old and Ms. Brown has just had it torn down. She now wants to build a new building. Ms. Brown hopes to
How can mechanics’ liens achieve priority over first mortgages that were recorded prior to the mechanics’ lien?
Mr. Smith acquired a property consisting of one acre of land and a two-story building five years ago for $100,000. He also obtained an $80,000 mortgage loan from ACE Bank to provide financing to complete the purchase. This year, Mr. Smith constructed another building on the property with his own
What is a land contract?
A debtor has filed a plan to reorganize his affairs under Chapter 13 of the Bankruptcy Code. The plan calls for payment of 10 cents on the dollar to all unsecured creditors over the next three years. The only secured creditor is Last Bank and Trust, whose lien is secured by the debtor’s personal
What does deficiency judgment mean?
Bob entered into a land contract to purchase real estate from Sam. The purchase price was to be paid over a 10-year period by monthly amortization. At the end of five years, Bob defaulted, having failed to make his required payments. The contract provided that in event of default, the seller could
When might a borrower want to have another party assume his liability under mortgage loan?
What does default mean? Does it occur only when borrowers fail to make scheduled loan payments?
What is meant by a “purchase money“ mortgage loan? When could a loan not be a purchase money mortgage?
Mort owns a property. Jessica Rosen holds a first mortgage against it, and Alex Nelligan holds a second mortgage. Mort defaults on his mortgage payments. Ms. Rosen forecloses without joining Mr. Nelligan in the foreclosure suit. The property is sold to Shelia McBride at the foreclosure sale. What
What does assignment mean and why would a lender want to assign a mortgage loan?
What does non-recourse financing mean?
Last year Jones obtained a mortgage loan for $100,000. He just inherited a large sum of money and is contemplating prepaying the entire loan balance to save interest. What are his rights to prepay the loan?
Can borrowers pay off, part or all, of loans anytime that they desire?
If, in Problem1, there was no definite agreement for future advances between Sedgewick and the bank at the time the initial $30,000 loan was closed, would your answer be different?
What does it mean when a lender accelerates? What is meant by forbearance?
Sedgewick arranged for an open-end construction loan from the Second National Bank not to exceed $50,000. The loan was closed and Sedgewick drew $30,000 initially. Three months later he drew the remaining $20,000. What is the bank’s position concerning the possibility of intervening liens?
Distinguish between a mortgage and a note.
Would it be legal for you to give a quitclaim deed for the Statue of Liberty to your friend?
Name the three general methods of title assurance and briefly describe each. Which would you recommend to a friend purchasing a home? Why?
What is an abstract of title?
How can a leased fee estate have a value that could be transferred to another party?
What is meant by an estate? Why are estates important in real estate finance?
Given the following situation and facts, complete a closing settlement statement similar to that shown in Exhibit 13-4. On May 15, 2017, Eric Martin signed a contract to purchase a rental house for $195,000. Closing is to occur June 8, 2017, with the day of closing to be counted as a day of
Using the “CFj” key of your financial calculator determine the IRR of the following series of annual cash flows: CF0= -$31,400; CF1 = $3,292; CF2 = $3,567; CF3 = $3,850; CF4 = $4,141; and CF5 = $50,659.
What will be the taxes due on sale? Assume 6% selling costs, 33% percent ordinary income tax rate, a 15 percent capital gains tax rate, and a 25 percent recapture rate.
What will be the after-tax equity reversion (cash flow) from the sale?
What is your annual depreciation deduction? Ignore the mid-month convention.
If you never sold the property, what would be the present value of the annual tax savings from depreciation?
If you sold the property at the end of five years, what would be the present value of the depreciation deductions, net of all taxes due on sale?
Black Acres Apartment, Inc needs to compute taxable income (TI) for the preceding year and wants your assistance. The effective gross income (EGI) was $52,000; operating expenses were $19,000; $2,000 was put into a fund for future replacement of stoves and refrigerators; debt service was $26,662,
Assuming a two-year holding period, should the investor make this investment given a required levered, after-tax, rate of return of 14 percent?
Compute the after-tax cash flows and after-tax equity reversion for the holding period.
Identify the limits or caps placed on changes in the interest rate on an adjustable rate mortgage?
Discuss the quality of the major ARM indexes cited in the text?
What is the major constraint on lenders in setting new interest rates for an adjustable rate mortgage?
What are the advantages to a home buyer of a graduated payment mortgage?
What is the purpose of recording documents?
Describe a conforming loan?
What is the principal risk for the buyer/borrower in a contract for deed?
Explain the differences between a regular mortgage and a deed of trust?
Explain the difference between the equity right of redemption and the statutory right of redemption?
Describe the difference between a buyer taking title subject to the mortgage versus assuming the mortgage?
What is the underlying purpose of requiring a borrower to escrow money each month for the payment of property taxes?
In a foreclosure, how are priorities determined among lien claimants on the collateral property?
Explain the relationship and purpose of a promissory note and the two primary forms of security instruments?
What would be the price of a $100,000 loan if discounted by three points?
Discuss the purpose and operation of Ginnie Mae?
Define a mortgage purchase “for portfolio”?
Explain the differences between a CMO and a mortgage pass-through type of security?
Describe the impact of the originate-to-distribute model on the growth of the subprime mortgage market?
Explain the two basic kinds of mortgage pools used to back securities and the two different methods used to generate the securities?
How can tax-exempt bonds offer lower-cost mortgage money and how is this money generally used?
What market does Freddie Mac serve, and how does it raise money for the purchase of mortgage loans?
Define the term point and explain how it is used, and list the different charges that can be quoted in points?
Explain the relationship between the price and the yield on a mortgage loan?
Without a national mortgage exchange, how are mortgages traded in the United States?
Are there any good sources of mortgage money available in your locality outside of mortgage companies and regulated lending institutions?
Describe a warehouse line of credit and who may use it?
Name three primary market lenders that are not subject to banking regulations?
Explain the origin and purpose of Real Estate Investment Trusts?
Describe qualification for the Rural Development Service’s home loan program?
How does the Farm Credit System structure the various agencies that handle oversight of the farm mortgage lending function?
Identify the principal sources of mortgage company income?
What is meant by loan servicing?
What qualifications are necessary to become a mortgage banker? Are there any special requirements for mortgage lenders in your state?
Distinguish between the operations of a mortgage banker and a mortgage broker. What are the five major minimum standards that an independent mortgage broker or loan office must pass to be licensed with the NMLS?
Identify at least two kinds of shorter-term mortgage loans made by commercial banks?
What advantages do credit unions have that banks consider unfair?
Identify the basic responsibility of each of the following four banking regulators: the Federal Reserve Bank Board, the Office of Thrift Supervision, the Comptroller of the Currency, and the Federal Deposit Insurance Corporation?
What is the general policy of life insurance companies toward mortgage lending?
In what way has the Community Reinvestment Act affected the operation of regulated institutions?
Explain why the Federal Reserve Bank places reserve requirements on depository institutions?
What is the present status of federal deposit insurance?
How does the government intend to simplify the banking system?
Identify the classes of regulated lenders?
How would you define the term primary mortgage market?
Suggest ways to improve our banking system?
Discuss the effects of the new loan commitment software applications on residential mortgage lending?
How does a change in interest rates affect business borrowing?
Identify the four major areas of demand for money?
Define discount rate of interest and prime rate?
Explain the meaning of the terms fiscal policies and monetary policies?
Explain the major factors that influence interest rates and describe the effects interest rate factors have on the residential mortgage market?
How does the Treasury raise money when it has to borrow?
How does the Federal Reserve increase the money supply?
Outline the monetary system used in this country?
How can pre-purchase home-buyer education programs affect the mortgage market?
What are some of the constraints on the recovery and growth of the GSE and private mortgage-backed securities market?
Discuss the effects of risk and term of a bond on the interest rate paid?
Distinguish between the functions of the primary and secondary mortgage markets?
Compare and contrast the two categories of bonds and how they differ from mortgage backed securities and the collateral pledged for each?
What is the federal agency underwriting function and what does it do for the mortgage market, and ultimately for the borrower?
Describe the origin of a loan discount?
What is the purpose of a promissory note? Of a mortgage?

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Real Estate Finance 9th edition John P. Wiedemer, ‎ Keith J. Baker - Solutions

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