$48.$ Suppose a borrower has a low$-$range FICO score of $660,$ a front$-$end housing ratio of

$36$ percent, a back$-$end ratio of $49$ percent, and an LTV of $95$ percent. Realistically,

the odds don$$t look good for their $$600,000$ loan application to get approved.

However, what factor listed below will get this person approved for a mortgage?

A$.$ If they agree to cut up all their credit cards and close them out.

B$.$ If they agree to have their bank deduct the monthly payment automatically

C$.$ If the agree to make a downpayment of $10$ percent

D$.$ If they have a compensating factor $$ such as a $$1$ million in a brokerage account

California Real Estate Economics Sixth Edition

$2020$ Kaplan, Inc.

May be reproduced for educational uses only.

$49.$ With respect to a loan broker pricing sheet, what does the following mean?

$30-$Year Fixed at $8\mathrm{.}250\%(2\mathrm{.}00)$ Minimum FICO $700$ and LTV $80\%$

A$.$ The broker must charge the client $2\%$ of the loan amount and the client must have

a credit score of $700$ and put a $20$ percent downpayment.

B$.$ The broker can earn $2\%$ of the loan amount if the client accepts the $8\mathrm{.}250\%$

interest rate and the client must have a credit score of $700$ and make a $20$ percent

downpayment.

C$.$ The broker is required to split the $(2\mathrm{.}00)$ rebate between themselves and the client.

The client must have a credit score of $700$ and put a $20\%$ downpayment.

D$.$ The rate for the $30-$Year fixed will be $8\mathrm{.}250\%$ if the client doesn$$t have a

minimum FICO of $700$ and has a $20$ percent downpayment.

$50.$ According to the textbook, despite having a large economy, what sad fact exists with

respect to the California population?

A$.$ Only $70\%$ of Californians can afford the median priced home.

B$.$ California has $22$ percent of the nation$$s homeless population living here.

C$.$ About $10$ million California renters use up to $50$ percent of their monthly income

to pay for rent.

D$.$ California is only building $360,000$ units of housing each year, which is not

enough for our growing population.

$51.$ According to the textbook, what is an appurtenance?

A$.$ It is something inside the property that gives it more value.

B$.$ It is something outside the property that is a direct threat to the value.

C$.$ It is something outside the property that is needed in order to access and enjoy the

property.

D$.$ It is a special property tax that is charged by the local government.

$52.$ Suppose the price of an MBS bond was $101\mathrm{.}75$ yesterday and went up to $102\mathrm{.}25$

today. Obviously, the bond price on this mortgage$-$backed security went up by $\mathrm{.}50$

basis points. Suppose the same thing happened to all Fannie Mae, Freddie Mac,

and Ginnie Mae mortgage bonds. Logically, what has happened to mortgage

interest rates today?

A$.$ Mortgage interest rates were pressured to go up$.$

B$.$ Mortgage interest rates were pressured to go down.

C$.$ Mortgage interest rates are not determined by the MBS market but only by

economic indicators.

D$.$ Nothing will happen since mortgage rates are regulated by the Federal Reserve