Question 1

1 pts

A biweekly mortgage:

Group of answer choices

has one rate adjustment after a set period, such as five years

increases at regular intervals, with the increased payments used to pay down the principal balance quicker

involves interest-only payments at first, then larger principal-plus-interest payments

involves 26 half-sized payments per year instead of the 12 standard payments

Flag question: Question 2Question 2

1 pts

A borrower obtains an FHA-insured loan through the 203(b) program. She may use the loan to purchase a:

Group of answer choices

commercial property

duplex where she will occupy one of the units

ten-unit apartment complex

vacation home

Flag question: Question 3Question 3

1 pts

A bridge loan, also called a swing or gap loan, is used to:

Group of answer choices

finance personal property and real property with a single mortgage loan

replace a construction loan with permanent financing

provide funds to close the purchase of a new home before the buyer's old home has been sold

provide monthly income to an elderly homeowner

Flag question: Question 4Question 4

1 pts

A due-on-sale clause is the same thing as a/an:

Group of answer choices

alienation clause

transfer exclusion clause

sale-exclusion provision

None of the above

Flag question: Question 5Question 5

1 pts

A jumbo loan is a loan that:

Group of answer choices

exceeds the conforming loan limits set by Fannie Mae and Freddie Mac

exceeds the FHA's maximum loan amount for the area in which the property is located

exceeds $275,000

has a loan-to-value ratio over 97%

Flag question: Question 6Question 6

1 pts

A lender making a conventional loan would not necessarily comply with the underwriting guidelines of Fannie Mae and Freddie Mac:

Group of answer choices

because conventional loans cannot be sold on the secondary market

because underwriting is not required for conventional loans

if the lender intended to keep the loan in portfolio

if the proposed loan amount were $100,000 or less

Flag question: Question 7Question 7

1 pts

A lender tells a buyer that the interest rate quoted at the time of the loan application will be guaranteed for a certain period. This is known as a/an:

Group of answer choices

annual percentage rate

loan guaranty

lock-in

teaser rate

Flag question: Question 8Question 8

1 pts

A loan has an LTV of 90% if the:

Group of answer choices

sales price or appraised value, whichever is lower, is at least 90% of the value

sales price or appraised value, whichever is lower, is 90% of the value or less

loan amount is 90% of the sales price or the appraised value, whichever is less

private mortgage insurance covers at least 90% of the loan amount

Flag question: Question 9Question 9

1 pts

A loan that doesn't comply with Fannie Mae or Freddie Mac's underwriting guidelines is called a/an:

Group of answer choices

subprime loan

below-market loan

unconventional loan

nonconforming loan

Flag question: Question 10Question 10

1 pts

A married couple is applying for a conventional mortgage loan. The husband's FICO credit score is 740 and the wife's is 680. The underwriter will qualify them using:

Group of answer choices

both scores

an average of the two scores

the lower of the two scores

the higher of the two scores

Flag question: Question 11Question 111 pts

A one-year ARM has a 60-day lookback period. Up until the last month of the rate adjustment period, interest rates had risen 0.25%. During the last month of the adjustment period, rates rose 0.50%. How much may the lender raise the interest rate on the loan?

Group of answer choices

0.50%

1%

0.41%

0.25%

Flag question: Question 12Question 121 pts

A personal credit report tracks an individual's credit history for the previous:

Group of answer choices

9 years

5 years

7 years

3 years

Flag question: Question 13Question 131 pts

A promissory note:

Group of answer choices

gives the lender the right to foreclose in the event of default

establishes the borrower's legal obligation to repay the loan

is not necessary for a transaction in which a deed of trust is used

All of the above

Flag question: Question 14Question 141 pts

A residential lender must give a loan applicant a loan estimate that discloses loan costs within how many business days after receiving an application?

Group of answer choices

one

three

five

seven

Flag question: Question 15Question 151 pts

A subordination clause is most likely to be included in a:

Group of answer choices

budget mortgage used in an affordable housing program

loan for the purchase of vacant land, when construction is planned

loan for the purchase of a second home

loan that will be supplemented with seller financing

Flag question: Question 16Question 161 pts

Acme Savings just preapproved the Swansons for a mortgage loan. Which of the following steps remain to be done before closing?

Group of answer choices

The Swansons still must submit a formal loan application

The Swansons still must provide documentation of their income and assets

The property still must be appraised and a title report obtained if the Swansons find a home

All of the above

Flag question: Question 17Question 171 pts

After Fannie Mae and Freddie Mac started buying _____ loans in the mid-2000s, this type of loan became much more popular, increasing from just a few percent of all new mortgage loans in 1994 to as much as 20% of new loans in 2006 (when the housing bubble began to burst).

Group of answer choices

adjustable-rate

investor

reverse equity

subprime

Flag question: Question 18Question 181 pts

Alex Carville is applying for conventional financing to buy a home. The seller has agreed to pay for a permanent buydown that would lower the interest rate from 10% to 8%. What rate will the lender use to qualify Carville for the loan?

Group of answer choices

10%

9.25%

9%

8%

Flag question: Question 19Question 191 pts

All of the following are ARM features that can lead to negative amortization, except:

Group of answer choices

payment cap and no rate cap

payment adjustments occur less often than interest rate adjustments

prepayment penalties

None of the above

Flag question: Question 20Question 201 pts

An ARM's margin is:

Group of answer choices

the difference between the interest rate cap and the interest rate charged

the difference between the index rate and the interest rate charged

the difference between the mortgage payment cap and the interest rate charged

None of the above

Flag question: Question 21Question 211 pts

An FHA borrower is:

Group of answer choices

not allowed to pay discount points

not required to make a downpayment

required to make a minimum cash investment, which doesn't include closing costs, discount points, or prepaid expenses

required to make a minimum cash investment, which may include closing costs, discount points, and prepaid expenses

Flag question: Question 22Question 221 pts

An advertisement that offers home purchase loans "with only 1% down":

Group of answer choices

violates the Truth in Lending Act

violates the Truth in Lending Act unless it also states the APR and other repayment terms

violates the Truth in Lending Act unless it also offers home equity loans on the same terms

does not violate the Truth in Lending Act

Flag question: Question 23Question 231 pts

An underwriter would be concerned with residual income when evaluating an application for:

Group of answer choices

any conventional loan

a 95% conventional loan

a VA-guaranteed loan

an adjustable-rate mortgage

Flag question: Question 24Question 241 pts

As a general rule, an underwriter won't count income from self-employment as stable monthly income unless the loan applicant has operated her business profitably for at least:

Group of answer choices

two years

three years

five years

seven years

Flag question: Question 25Question 251 pts

As a general rule, an FHA borrower's debt to income ratio should not exceed:

Group of answer choices

47%

43%

36%

29%

Flag question: Question 26Question 261 pts

As a general rule, secondary financing in conjunction with a conventional loan:

Group of answer choices

must be partially amortized

must comply with restrictions imposed by the primary lender

is permitted only by subprime lenders

may not exceed 5% of the sales price or appraised value, whichever is less

Flag question: Question 27Question 271 pts

Aside from bankruptcies, negative credit information ordinarily remains on an individual's credit report for:

Group of answer choices

three years

ten years

five years

seven years

Flag question: Question 28Question 281 pts

Buyer A and Buyer B are both buying single-family homes. Buyer A's borrowing $300,000 and Buyer B's borrowing $900,000. It's very likely that Buyer B will be:

Group of answer choices

qualified with more lenient standards than Buyer A

allowed a higher loan-to-value ratio than Buyer A

required to pay off his loan over a shorter term than Buyer A

required to pay a higher interest rate than Buyer A

Flag question: Question 29Question 291 pts

Buyers with little money available for closing would be most likely to consider a/an:

Group of answer choices

FHA loan

15-year loan

growing equity mortgage

conventional loan that doesn't require mortgage insurance

Flag question: Question 30Question 301 pts

Charging mortgage borrowers higher or lower interest rates depending on whether they're good credit risks or poor credit risks is called:

Group of answer choices

risk-based pricing

par rate pricing

average risk pricing

average cost pricing

Flag question: Question 31Question 311 pts

Compared to a 30-year loan, a 15-year loan usually has:

Group of answer choices

a higher interest rate and a larger monthly payment

a lower interest rate and a larger monthly payment

a higher interest rate and a smaller monthly payment

a lower interest rate and a smaller monthly payment

Flag question: Question 32Question 321 pts

Credit card payments are an example of:

Group of answer choices

debt investments

installment debts

revolving debts

secured debts

Flag question: Question 33Question 331 pts

For VA loans, most lenders require:

Group of answer choices

the guaranty amount to equal or exceed the loan amount

the downpayment to equal the guaranty amount

the loan amount plus the downpayment to equal 25% of the guaranty amount

the guaranty amount plus any downpayment to equal or exceed 25% of the purchase price

Flag question: Question 34Question 341 pts

For a conventional loan, unless there are compensating factors, the ratio of total obligations to income should not exceed:

Group of answer choices

28%

31%

36%

43%

Flag question: Question 35Question 351 pts

For an investor, three key characteristics of a potential investment are:

Group of answer choices

term, rate, and yield

yield, exchange, and pay-out

safety, liquidity, and yield

rate, liquidity, and profit

Flag question: Question 36Question 361 pts

For federally related loans, a key provision of the Real Estate Settlement Procedures Act:

Group of answer choices

prohibits lenders from paying referral fees to real estate agents for referring customers

prohibits lenders from charging origination fees in excess of 5%

requires lenders to close home purchase loans within 30 days after receiving a written application

requires lenders to use independent escrow agents to close loan transactions

Flag question: Question 37Question 371 pts

George Wilson is applying for a 90% conventional loan. His parents are willing to give him some money to help him buy the house. Can gift funds be applied to the required downpayment for this loan?

Group of answer choices

Yes, as long as Wilson obtains extra mortgage insurance for the loan

Yes, as long as Wilson is still putting at least $10,000 of his own money into the purchase

Yes, though Wilson may be required to pay a certain amount of the sales price out of his own resources

No; gift funds cannot be used for the downpayment when the LTV is over 80%

Flag question: Question 38Question 381 pts

Gerrie Farrell is buying a single-family home. She can finance the purchase with an FHA loan only if:

Group of answer choices

her gross annual income does not exceed $40,000

she intends to lease the property to low-income tenants in compliance with FHA rules

she intends to occupy the property as her principal residence

the house was built to FHA specifications under an approved home warranty program

Flag question: Question 39Question 391 pts

If the seller didn't pay off the mortgage, and the buyer didn't assume it:

Group of answer choices

the sale extinguished the mortgage and the lender has no further rights in regard to the property

the seller has no further liability to the lender

the lender can choose whether to sue the seller or the buyer in case of default

the buyer took title subject to the mortgage, and the lender can still foreclose on the property

Flag question: Question 40Question 401 pts

In a deed of trust, the lender is referred to as the:

Group of answer choices

grantor

beneficiary

trustee

trustor

Flag question: Question 41Question 411 pts

In a lease/option arrangement:

Group of answer choices

the rent charged should be less than the market rent

the tenant/optionee is under no obligation to buy the property

the option money should be treated as a security deposit

All of the above

Flag question: Question 42Question 421 pts

In a typical residential real estate transaction, if closing takes place on January 20, the due date for the buyer's first mortgage payment will be:

Group of answer choices

January 21

February 1

February 15

March 1

Flag question: Question 43Question 431 pts

In analyzing a loan applicant's income to determine if she can afford the proposed loan, lenders are usually most concerned with the applicant's:

Group of answer choices

debt to income ratio

housing expense to income ratio

gap ratio

asset to liability ratio

Flag question: Question 44Question 441 pts

In certain cases, if the proceeds of a sheriff's sale aren't sufficient to pay off the foreclosed mortgage, the lender may sue the borrower for the remainder owed. If the court rules in the lender's favor, it will grant the lender:

Group of answer choices

a writ of attachment

a lis pendens

a deficiency judgment

Both A and C

Flag question: Question 45Question 451 pts

In contrast to wholesale lenders, retail lenders:

Group of answer choices

deal directly with loan applicants

generally work with loan correspondents

focus on conventional loans

tend to be large, nationwide institutions

Flag question: Question 46Question 461 pts

In most transactions financed with a land contract, the vendor retains:

Group of answer choices

legal title until the full contract price has been paid

possession of the property until the full contract price has been paid

equitable title until the full contract price has been paid

None of the above

Flag question: Question 47Question 471 pts

In qualifying a buyer for a conventional loan, an underwriter would probably take into account all of the following liabilities, except:

Group of answer choices

a car loan with four $80 monthly payments remaining

a student loan with twelve $70 monthly payments remaining

a personal loan with fifteen $45 monthly payments remaining

child support payments owed for a ten-year-old child

Flag question: Question 48Question 481 pts

Income that meets the tests of quality and durability is called:

Group of answer choices

employment income

stable monthly income

reserves

None of the above

Flag question: Question 49Question 491 pts

Jones is applying for a conventional loan with an adjustable interest rate. To qualify Jones, because of the extra risk that an ARM represents, the lender is most likely to:

Group of answer choices

use a qualifying interest rate that's higher than the loan's actual initial rate to determine the housing expense for the income ratio calculations

use a qualifying interest rate that's lower than the loan's actual initial rate to calculate the loan-to-value ratio

allow a debt to income ratio no higher than 25%

allow a debt to income ratio no higher than 40%

Flag question: Question 50Question 501 pts

Long-term mortgage loans were introduced:

Group of answer choices

in response to the savings and loan crisis

in response to the foreclosure epidemic that occurred during the Depression

in the 1970s, as an alternative to adjustable-rate mortgages

in the 1980s, as an alternative to fixed-rate mortgages

Flag question: Question 51Question 511 pts

Margo Smith and John Perlman just bought a home with an FHA loan. When they sell the home, who could assume their loan?

Group of answer choices

Only a buyer who meets the FHA's creditworthiness standards and will occupy the home as his or her primary residence

Anyone who intends to occupy the home as a primary or secondary residence

Any buyer (owner-occupant or investor) who meets the FHA's standards

Any buyer who agrees to release the sellers from liability

Flag question: Question 52Question 521 pts

One characteristic that distinguishes securities from other types of investments is that securities:

Group of answer choices

don't put the investor at risk of losing the capital originally invested

don't give the investor direct managerial control over the enterprise invested in

are debt investments, not ownership investments

are illiquid

Flag question: Question 53Question 531 pts

Ordinarily, interim or prepaid interest is:

Group of answer choices

paid to the lender by the buyer at closing

prorated between the buyer and the seller

not required for conventional loans

refunded to the seller at closing

Flag question: Question 54Question 541 pts

PITI might include all of the following except:

Group of answer choices

escrow fees

property taxes

mortgage insurance

loan interest

Flag question: Question 55Question 551 pts

Private mortgage insurance is generally not required on conventional loans unless the loan-to-value ratio is over:

Group of answer choices

80%

90%

95%

97%

Flag question: Question 56Question 561 pts

Reverse mortgages:

Group of answer choices

are generally regarded as a form of predatory lending

involve negative amortization

enable some elderly homeowners to keep their homes

do not have to be repaid if the homeowner dies

Flag question: Question 57Question 571 pts

Secondary financing from someone other than a family member is permitted in conjunction with an FHA loan if:

Group of answer choices

the borrower cannot qualify for the loan without secondary financing

the secondary financing is obtained from an institutional lender (not from the seller)

the secondary lender waives the right to foreclose

the two loans combined do not exceed the maximum loan-to-value ratio for the transaction

Flag question: Question 58Question 581 pts

Seller financing is most likely to be used:

Group of answer choices

by low-income buyers

when market interest rates are high

in areas where subprime financing is not available

in conjunction with VA-guaranteed loans

Flag question: Question 59Question 591 pts

Temporary buydowns and hybrid ARMs might be of particular interest to home buyers who:

Group of answer choices

have little money available for a downpayment

have poor credit scores

expect interest rates to increase sharply in the next few years

expect their income to increase substantially in the next few years

Flag question: Question 60Question 601 pts

Thanks to the seller's contribution, a buyer will pay 7% interest for the first three years of a loan and then 9% for the rest of the loan's term. This is an example of a/an:

Group of answer choices

adjustable-rate buydown

graduated payment temporary buydown

level payment temporary buydown

permanent buydown

Flag question: Question 61Question 611 pts

The Jacksons are buying a home for $320,000, and they'll be required to pay a discount fee of three points for their $300,000 loan. The fee will amount to:

Group of answer choices

$9,000

$9,600

$8,000

$3,000

Flag question: Question 62Question 621 pts

The Lawrences bought a home with a VA loan in 2012. Now they're selling the property to a non-veteran who plans to assume the loan. Which of the following is true?

Group of answer choices

The Lawrences' full entitlement cannot be restored until their old loan has been paid off

The Lawrences' full entitlement will be restored if the VA approves the assumption

The Lawrences are not eligible for another VA loan

Only an eligible veteran with full entitlement can assume a VA loan

Flag question: Question 63Question 631 pts

The Lenihans are buying a single-family home with an FHA loan. The FHA insurance will require:

Group of answer choices

annual premiums

an upfront (one-time) premium that must be paid in cash at closing

an upfront premium that may be paid in cash or financed

an upfront premium that may be paid in cash or financed, plus annual premiums

Flag question: Question 64Question 641 pts

The Posts are buying a house for $254,000. Its appraised value is $255,000, and the estimated closing costs come to $8,900. Their mortgage loan has a 90% LTV, which means that the Posts are borrowing:

Group of answer choices

$229,500

$236,610

$220,590

$228,600

Flag question: Question 65Question 651 pts

The Real Estate Settlement Procedures Act would apply to which of the following loans?

Group of answer choices

A construction loan from a commercial bank

A loan from a commercial bank used to purchase vacant land

A loan from a commercial bank used to purchase an existing single-family home

A seller-provided second loan

Flag question: Question 66Question 661 pts

The Richardsons' stable monthly income is $6,000, and their recurring liabilities come to $700 per month. If they want to qualify for a 90% conventional loan, their proposed monthly housing expense (PITI) probably should not exceed:

Group of answer choices

$980

$1,460

$1,680

$1,876

Flag question: Question 67Question 671 pts

The Zinns are applying for a loan to buy a new home while their old one is still for sale. When adding up the Zinns' liquid assets, the underwriter will include:

Group of answer choices

the sales price of the old home

the appraised value of the old home

their gross equity in the old home

their net equity in the old home

Flag question: Question 68Question 681 pts

The basic purpose of an origination fee is to:

Group of answer choices

cover the lender's overhead and costs incurred in making a loan

increase the lender's yield on the loan above the interest rate

reduce the borrower's monthly payments to an affordable level

discourage the borrower from backing out of the transaction before closing

Flag question: Question 69Question 691 pts

The federal government created the secondary mortgage market:

Group of answer choices

because the secondary market helps to moderate the disruptive economic effects of local real estate cycles

because the system had become corrupt and unnecessarily complicated

to prevent investors from profiting at the expense of middle-class home buyers

to force lending institutions to invest in their local communities

Flag question: Question 70Question 701 pts

The lender issues a certificate of reduction to:

Group of answer choices

acknowledge the transfer of title and waive the due-on-sale clause

state the balance of the loan without changing the terms of the loan

object to the transfer of title to the new owner and enforce the due-on-sale clause

Both A and B

Flag question: Question 71Question 711 pts

The loan has a fixed interest rate and level monthly payments; a portion of each month's payment is applied to interest and the remainder is applied to principal, but a balloon payment will be due at the end of the term. This loan is:

Group of answer choices

unamortized

negatively amortized

fully amortized

partially amortized

Flag question: Question 72Question 721 pts

The most common alternative private source of lending to buyers is:

Group of answer choices

insurance companies

real estate investment trusts

sellers

small private investors

Flag question: Question 73Question 731 pts

The only secondary market entity that does not purchase conventional loans is:

Group of answer choices

FNMA

Freddie Mac

GNMA

Federal National Mortgage Association

Flag question: Question 74Question 741 pts

The power of sale clause in a deed of trust permits:

Group of answer choices

the borrower to sell the property without the trustee's approval

the borrower to sell the property without the beneficiary's approval

the trustee to foreclose judicially

the trustee to foreclose nonjudicially

Flag question: Question 75Question 751 pts

The relationship between the finance charge and the amount financed is expressed in a loan's:

Group of answer choices

LTV

ARV

APR

ALV

Flag question: Question 76Question 761 pts

The statutory right of redemption allows a defaulting borrower to redeem the property:

Group of answer choices

before the sheriff's sale in a judicial foreclosure

after the sheriff's sale in a judicial foreclosure

before the trustee's sale in a nonjudicial foreclosure

after the trustee's sale in a nonjudicial foreclosure

Flag question: Question 77Question 771 pts

The term "piggyback loan" refers to:

Group of answer choices

subprime lending

secondary financing

refinancing

construction financing

Flag question: Question 78Question 781 pts

This type of predatory lending practice involves collusion between a lender and an appraiser:

Group of answer choices

balloon payment abuse

loan in excess of value

negative amortization scheme

unfair prepayment penalty

Flag question: Question 79Question 791 pts

Under the Community Reinvestment Act, depository institutions:

Group of answer choices

must report the number of mortgage loans issued to low- and middle-income borrowers

must lend to low-income borrowers without consideration for their ability to pay

are prohibited from discrimination in loan decisions based on the race or national origin of borrowers

must allocate a certain percentage of all loans they make to low-income borrowers

Flag question: Question 80Question 801 pts

Use of gift funds in a transaction requires a:

Group of answer choices

promissory note

subordination agreement

gift letter from the donor

All of the above

Flag question: Question 81Question 811 pts

Vivian North just made her monthly mortgage payment, which includes a share of her property taxes and her hazard insurance premium. What will the lender do with the tax and insurance portions of the payment?

Group of answer choices

Send them to the county auditor and the insurance company within ten days

Apply them to release part of the security property from the lien

Keep them in an impound account until payment is due

Invest them for the benefit of the borrower

Flag question: Question 82Question 821 pts

What bill, passed in 2008, authorized the Treasury Department to purchase stock in and assets of failing financial institutions?

Group of answer choices

American Recovery and Reinvestment Act

Financial Services and Modernization Act

Housing and Economic Recovery Act

Troubled Assets Relief Program

Flag question: Question 83Question 831 pts

What federal law requires lenders to disclose information that would help detect instances of redlining?

Group of answer choices

Equal Credit Opportunity Act

Fair Housing Act

Home Mortgage Disclosure Act

Real Estate Settlement Procedures Act

Flag question: Question 84Question 841 pts

When a borrower exercises the conversion option in an ARM, the new fixed interest rate is usually:

Group of answer choices

2% above the loan's original adjustable rate

the index rate at the time of conversion

the market rate at the time of conversion

the market rate at the time the loan was originated

Flag question: Question 85Question 851 pts

When calculating a loan applicant's stable monthly income, an underwriter may "gross up" certain types of income that:

Group of answer choices

aren't taxable

aren't considered durable

have been earned consistently for more than three years

will be withdrawn from savings prior to closing

Flag question: Question 86Question 861 pts

When the Diazes bought their home, they didn't make a downpayment, but they did pay a funding fee. They must have financed the purchase with a/an:

Group of answer choices

FHA loan

VA loan

ARM

insured conventional loan

Flag question: Question 87Question 871 pts

When the Hendersons' loan application was submitted to an automated underwriting system, the system did not give their loan a risk classification of "Approve" or "Accept." In this situation:

Group of answer choices

the Hendersons should request a recalibration of the AUS

the lender may have the application underwritten manually to see if it should be approved anyway

the Hendersons are entitled by law to additional review of their application

the lender cannot make the loan if this is a federally related loan transaction

Flag question: Question 88Question 881 pts

Which federal law applies to all credit transactions and prohibits discrimination against loan applicants?

Group of answer choices

Equal Credit Opportunity Act

Fair Housing Act

Home Mortgage Disclosure Act

Real Estate Settlement Procedures Act

Flag question: Question 89Question 891 pts

Which of the following statements regarding a borrower's net worth is not true?

Group of answer choices

Net worth is an indicator of the borrower's ability to manage financial affairs

Jewelry is an asset that contributes to net worth

A borrower must have sufficient liquid assets to close the transaction

An individual's net worth is found by subtracting her assets from her liabilities

Flag question: Question 90Question 901 pts

Which of the following is most likely to be treated as a compensating factor so that a conventional loan applicant will be allowed to have income ratios that exceed the usual maximums?

Group of answer choices

She's been at her job for at least two years

She's buying an energy-efficient home

Her current housing expense is significantly lower than the proposed housing expense

She's applying for an ARM

Flag question: Question 91Question 911 pts

Which of the following items isn't included in the finance charge for a real estate loan?

Group of answer choices

Appraisal fee

Interest

Origination fee

Points paid by borrower

Flag question: Question 92Question 921 pts

Which of the following would not be included as part of a PITI payment?

Group of answer choices

Hazard insurance premium

Homeowners association dues

Mortgage insurance premium

Title insurance premium

Flag question: Question 93Question 931 pts

Which of the following would an appraiser be most likely to use as a comparable sale for a sales comparison appraisal (with any necessary adjustments)?

Group of answer choices

A home quite similar to the subject property, located in the same neighborhood, which sold two years ago

A home quite similar to the subject property, located in the same neighborhood, which sold for a reduced price because the seller was forced to sell

A home quite similar to the subject property, located in a similar neighborhood nearby, which sold three months ago

None of the above could be used

Flag question: Question 94Question 941 pts

Which of the following should a loan applicant take to the initial loan interview?

Group of answer choices

A copy of the purchase and sale agreement, if the applicant has already entered into one

A good faith estimate of closing costs

A copy of the prequalifying certificate signed by the real estate broker

A personal credit report from a reputable credit bureau

Flag question: Question 95Question 951 pts

Which of the following is true of Fannie Mae, Freddie Mac, and Ginnie Mae?

Group of answer choices

They are all federal agencies within the Department of Housing and Urban Development (HUD)

They are all private corporations without government ties

They all issue and/or guarantee mortgage-backed securities that are sold to investors

They are all government-sponsored enterprises, not government agencies

Flag question: Question 96Question 961 pts

Which of these statements about predatory lending is true?

Group of answer choices

Most predatory lending takes place in the subprime market

Most subprime lenders engage in predatory lending practices

Predatory lending occurs primarily in connection with home purchase loans, not refinancing and home equity loans

The Home Ownership and Equity Protection Act (HOEPA) has eliminated predatory lending in all but a few states

Flag question: Question 97Question 971 pts

Which of these types of income is least likely to be counted as part of a loan applicant's stable monthly income?

Group of answer choices

Social security payments

Unemployment compensation

Welfare payments

Rental income

Flag question: Question 98Question 981 pts

Which provision in a mortgage allows the lender to demand immediate payment of the entire outstanding loan balance if the borrower defaults (for example, by repeatedly failing to pay the full amount of the loan payment)?

Group of answer choices

Alienation clause

Statutory default clause

Acceleration clause

Both A and C

Flag question: Question 99Question 991 pts

With an adjustable-rate mortgage, the loan's interest rate:

Group of answer choices

may increase, but cannot decrease, during the loan term

cannot increase after the first five years of the loan term

may increase or decrease during the loan term

is adjusted whenever the index rate changes

Flag question: Question 100Question 1001 pts

With wraparound financing:

Group of answer choices

the buyer assumes the seller's loan

the underlying loan is larger than the wrap

the due-on-sale clause in the underlying loan is not triggered

the seller continues to make the payments on the underlying loan