Real Estate Finance Practice Exam

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• The act that mandates lenders to disclose terms and conditions of consumer loans is known as:
• What does TILA stand for?
• What is meant by 'negative amortization'?
• What does "equity buildup" refer to?
• What act was passed in 2010 to create accountability in regulating mortgage lenders and brokers?
• What is the main purpose of a Good Faith Estimate (GFE)?
• Which clause specifies the conditions when a lender can demand loan repayment due to borrower default?
• Conventional loans are typically not insured by which type of organization?
• What defines an assumable mortgage?
• What is the role of a mortgage banker?
• A clause that allows a lender to demand repayment of the entire loan balance upon borrower default is known as?
• What does the term "zoning" refer to in real estate?
• The purpose of __________ is to promote the informed use of consumer credit by requiring disclosures about its terms and cost.
• If a borrower has experienced a foreclosure, what is the waiting period to use FHA financing to purchase a new home?
• Which type of account guarantees the safety of funds up to a certain limit in the case of bank failure?
• What does 'negative amortization' indicate about loan payments?
• Which act requires lenders to clearly communicate the annual percentage rate (APR) to borrowers?
• What type of credit transactions does TILA primarily apply to?
• What is the purpose of a secondary appraisal?
• What is the effect of the Federal Reserve on mortgage rates?
• The Federal Home Loan Bank System is essential for which purpose?
• Which of the following describes the overall aim of TILA?
• What is the significance of a credit report in real estate finance?
• What does DTI stand for in real estate finance?
• What is an assumable mortgage?
• Why are unpaid property taxes important to lenders?
• What does the term 'foreclosure' imply?
• In the context of real estate finance, what does loan underwriting involve?
• Major responsibilities of the Mint include all of the following EXCEPT:
• Define 'hard money loan'.
• What is a reverse mortgage?
• Which agency was established in 1933 to enhance stability in the financial system?
• How many days must a lender or mortgage broker provide a Good Faith Estimate (GFE) after receiving the application?
• RESPA is categorized as which type of statute?
• What is PMI in the context of mortgage lending?
• What do points represent in mortgage financing?
• In real estate, what is a lien?
• The ___________ is intended to encourage depository institutions to help meet the credit needs of the communities in which they operate.
• What is a mortgage-backed security?
• What factors contribute to a property’s market value?
• What are distressed properties?
• _______________ are the amount of funds that a depository institution must hold in reserve against specified deposit liabilities.
• What is a land contract?
• What does equity in real estate represent?
• What is a balloon mortgage?
• What is a bridge loan?
• What is a Real Estate Investment Trust (REIT)?
• What does the Fair Housing Act aim to eliminate?
• During foreclosure, what happens to the borrower's ownership of the property?
• What does the term "loan origination" refer to?
• What is the difference between primary and secondary mortgage markets?
• What is the relationship between TILA and RESPA?
• Which of the following is a requirement for mortgage lenders under RESPA?
• What is the purpose of an amortization calculator?
• In financing terms, what does LTV stand for?
• What is a home equity line of credit (HELOC)?
• What is typically evaluated in the underwriting process?
• What is the primary role of a real estate appraiser?
• During which phase does ownership transfer in a real estate transaction?
• What is mortgage insurance designed to do?
• Which entity is recognized as the largest buyer of residential mortgages in the U.S.?
• A current medium of exchange collectively in the form of coins and banknotes is referred to as what?
• What type of loan is a collaboration among lenders to share in a loan that is too big for one lender?
• Which term best describes the management, creation, and study of money, banking, and credit?
• What is meant by loan modification?
• What is the primary purpose of a mortgage in real estate transactions?
• What is the term for a written promise to pay a sum of money at a future date?
• Which factors are typically considered during the underwriting process?
• Lending institutions often charge a higher interest on which type of mortgages to compensate for increased risk?
• What does FHA stand for?
• Which factor does not typically affect the loan-to-value ratio (LTV)?
• When a borrower defaults on a secured loan, what can the lender do?
• All of the following are functions of the department of Treasury EXCEPT:
• What is a permanent change in one or more of the terms of a borrower's loan called?
• What is an investment property?
• A borrower who secures a loan with fluctuating rates based on a market index is using what type of mortgage?
• What is the typical structure of multifamily properties?
• What is an FHA 203(k) loan?
• What does 'zoning' refer to in real estate?
• What type of mortgage adjusts its interest rate periodically based on a predetermined index?
• In a short sale, what does the lender agree to do?
• What aspect do points paid at closing directly affect?
• What does the Equal Credit Opportunity Act prohibit?
• What is required for a borrower to qualify for a mortgage?
• Which entity typically performs a title search?
• Which type of mortgage typically provides less favorable terms for the borrower?
• What term describes a creditor's right to seize property if payments are not kept up?
• Which of the following is NOT included in a promissory note?
• What does amortization mean in finance?
• What does a homestead exemption do for homeowners?
• The primary purpose of the CRA is to encourage which of the following?
• What is a lien in real estate?
• What does RESPA focus on specifically?
• What is the main goal of the Dodd-Frank Act in relation to mortgage finance?
• What is equity in real estate?
• How does a foreclosure sale function?
• What does the underwriting process involve?
• What effect does a foreclosure have on a borrower's credit score?
• What is a key benefit of cash-out refinancing for borrowers?
• What does "skin in the game" signify in real estate finance?
• What is an amortization schedule?
• In real estate finance, what does "capitalization rate" represent?
• In the United States, money is controlled by the ____________.
• Which legislation regulates the practices of real estate settlement service providers?
• What does the term 'underwriting' refer to in lending?
• What is the benefit of refinancing a mortgage?
• How does a reverse mortgage function?
• What happens to borrower eligibility for FHA loans after a foreclosure?
• What is "subprime lending"?
• When is a mortgage considered fully amortized?
• Which document is essential for a borrower intending to assume a mortgage on a property?
• What type of information does a credit report detail?
• A loan where multiple lenders share the risk of a single large loan is known as what type of loan?
• What type of financing is characterized as ranking behind the primary secured lender?
• What is the purpose of a mortgage pre-approval?
• What is the purpose of the Truth in Lending Act (TILA)?
• What does it mean to "lock-in" a mortgage interest rate?
• What type of document is a closing disclosure?
• What is the goal of an amortization schedule?
• What is the difference between fixed-rate and adjustable-rate mortgages?
• What is a comparative market analysis (CMA)?
• Which of the following best describes real property?
• What role does FNMA play in real estate finance?
• What is often a condition for waiving PMI in mortgage lending?
• What are property taxes used for?
• Which of the following financing options typically has the least amount of borrower protection?
• What is the primary benefit of an interest-only mortgage?
• What role does the Federal Reserve play in real estate finance?
• How does a fixed-rate mortgage differ from an adjustable-rate mortgage?
• How many years of job history with the same employer is typically required to qualify for a loan?
• What is buyer's remorse in real estate?
• What role does a loan originator play?
• What is the primary purpose of a lien?
• If a loan of $765,000 has a down payment of $85,000, what is the loan-to-value ratio?
• What is a key requirement of the SAFE Act?
• Which of the following is a common reason for borrowers to face foreclosure?
• What is the function of escrow in real estate?
• Which regulation deals specifically with closing costs and settlement procedures?
• For Bryan and Carla to qualify for their monthly payment of $1780 and long-term debt of $630, how much monthly income must they have with qualifying ratios of 28%/36%?
• Which of the following is NOT a part of the secondary money market?
• In a transaction with a sales price of $475,000, an LTV of 90%, and a tax rate of $1.97 per $100, what is the prorated credit due to the buyer if closing is on July 17th?
• How does inflation typically affect mortgage interest rates?
• What is the term used for the evidence of indebtedness?
• Which document outlines the terms of a loan, including repayment amounts and schedule?
• Under which law must borrowers be provided with a Good Faith Estimate (GFE)?
• What does the down payment on a home generally represent?
• What determines the duration of a leasehold estate?
• Which act is designed to enhance consumer protection by requiring a joint development and maintenance of a Federal registration system for individual employees involved in residential mortgage loan origination?
• Which law specifically addresses discrimination in the provision of financial assistance?
• When does title transfer in a contract for deed?
• What does the term "market conditions" typically refer to?
• What does the term "escrow" refer to in real estate transactions?
• Which clause requires written consent from the lender before the borrower can transfer or sell the collateralized property?
• What is the primary function of the Federal Reserve System?
• What does the term "underwriting" refer to in mortgage lending?
• Which party is typically not listed on the deed of trust?
• What is meant by a leasehold estate?
• What does an encumbrance typically impact in real estate?
• What is a custodial account in real estate financing?
• What is the significance of the Fair Housing Act?
• What is the main purpose of a loan estimate?
• What type of loan is a conventional loan?
• What does foreclosure refer to in real estate?
• What is a key feature of an interest-only mortgage?
• Which organization supports housing initiatives in low-income areas of Texas?
• What is the primary purpose of a mortgage?
• Which entity is responsible for regulating reserve requirements?
• What is the primary function of the Consumer Financial Protection Bureau (CFPB)?
• Which document is used to convey property ownership during a mortgage transaction?
• What does the acronym SAFE in the context of mortgage lending stand for?
• If a sales price is $175,000, the LTV is 85%, and the interest rate is 4.75%, how much interest would be paid in the first full month?
• Which of the following is a benefit of a fixed-rate mortgage?
• What is a deed in lieu of foreclosure?
• What is the primary function of Fannie Mae and Freddie Mac in the mortgage market?
• With a sale price of $323,500 and an LTV of 85%, what is the monthly PMI factor when given an actual year calculation of .0033?
• What is the primary purpose of title insurance?
• In what circumstance might a borrower consider refinancing their mortgage?
• What is the provision in a mortgage that allows the responsibility of an existing mortgage to be passed to the buyer?
• What is the primary purpose of the Truth in Lending Act (TILA)?
• What does the term 'subprime mortgage' refer to?
• Which term describes unscrupulous actions by lenders that induce borrowers into high-fee mortgages?
• What is the dollar amount of 2.5 points on a loan amount of $765,000?
• Federal Home Loan Banks are categorized as what type of organization?
• What is the purpose of an appraisal in real estate finance?
• What is the role of the Federal Housing Administration (FHA)?
• What is a foreclosure?
• What is a prepayment penalty?
• What does the FDIC primarily protect?
• What role do points play in mortgage financing?
• Which factor is NOT typically included in calculating APR?
• What does the term 'equity' generally refer to in real estate?
• Which of the following is required under TILA?
• How does a higher credit score generally affect mortgage rates?
• What does LTV stand for in real estate finance?
• A loan-to-value (LTV) ratio of 95% indicates what about a purchase?
• What is the purpose of a title search in real estate?
• What does an interest rate of 4.5% indicate about a loan?
• What does the term "equity" mean in real estate finance?
• Under which circumstance would the creditor be allowed to enforce a lien?
• If the loan amount is $337,500 and the down payment is $37,500, what is the LTV?
• What does the term "adjustable-rate" mean in real estate finance?
• What is the market called where borrowers and mortgage originators come together to negotiate mortgage terms?
• Why is LTV important in real estate financing?
• What is typically the focus of an appraisal in situations of financing?
• Which document is typically associated with the final settlement statement in a real estate transaction?
• The U.S. Mint operates under which government entity?
• Cash-out refinancing allows the borrower to do what?
• What factors primarily determine most real estate cycles in Texas?
• What is a special assessment tax?
• Which system provides housing finance access to reliable funding and technical assistance?
• What is the purpose of a property appraisal?
• Who is one of the largest buyers of securities in the mortgage market?
• What is the monthly insurance payment calculated from an insurance cost of $2800/year?
• What is a deed in lieu of foreclosure?
• What is required for collateralized loans?
• What is a construction loan?
• Which term describes the difference between the market value of a home and the amount owed on the mortgage?
• What does the term 'satisfaction of mortgage' signify?
• Which organization helps provide essential services and affordable housing opportunities based on income level in Texas?
• What does the term "qualifying ratio" refer to in real estate financing?
• What does it mean to have a high LTV ratio?
• Which law mandates a 30-day delayed effective date for rules made by federal agencies?
• Which of the following cannot be purchased with FHA loans?
• Which term measures the wealth and resources of a particular area, including production and consumption?
• What is the role of a mortgage broker in real estate finance?
• What is a common outcome of a reverse mortgage?
• What does the term "loan-to-value ratio" (LTV) refer to?
• The SAFE Act has been transferred to which entity for administration and enforcement?
• What is a short sale in real estate?
• What is a pre-approval in the context of mortgage financing?
• What is meant by "real property"?
• What is the primary function of the FHA?
• What do mortgage-backed securities usually provide to investors?
• What are typical consequences of a prepayment penalty?
• Which form lists the basic information about the terms of a mortgage loan for which the consumer applied?
• What does the term 'deed of trust' signify?
• What is a prepayment penalty?
• Which type of mortgage has a consistent interest rate throughout the loan term?
• Which of the following is a key benefit of TILA for borrowers?
• What is the significance of the APR (Annual Percentage Rate) in lending?
• What is a loan origination fee?
• What does FHA stand for in relation to mortgage financing?
• Which institution provides cash advances to members, including community banks and credit unions?
• Which type of mortgage is typically more suitable for long-term homeowners?
• What term describes a company or individual that originates and sells mortgage loans to investors?
• The purpose of __________ is to promote the informed use of consumer credit by requiring disclosures about its terms and cost.
• What entity is a publicly traded, federally chartered corporation that purchases agricultural loans from lenders?
• What defines a conventional loan?
• Mortgage insurance is typically required when the LTV exceeds what percentage?
• What does it typically indicate when a property’s market value declines?
• What does a foreclosure sale aim to do?
• What is the significance of the Fair Housing Act?
• Which of the following is a primary goal of the Dodd-Frank Act?
• What aspect of credit is primarily reported in a credit report?
• What advantage does a borrower typically gain from mortgage insurance?
• What usually characterizes the primary mortgage market?
• The NATIONAL HOUSING ACT of 1934 led to the creation of which entity to stimulate private credit?
• What are closing costs?
• What does RESPA primarily regulate?
• What type of mortgage involves an agreement for the funds to build improvements?
• Which condition typically indicates the need for title insurance in a real estate transaction?
• How does a balloon mortgage work?