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real estate quiz 3
Terms in this set (38)
Private mortgage insurance (PMI) is usually required on _____ loans with loan-to-value ratios greater than _____ percent.
Home, 80 percent
The dominant loan type originated and kept by most depository institutions is the:
Adjustable rate mortgage.
Which of the following mortgage types has the most default risk, assuming the initial loan-to-value ratio, contract interest rate, and all other loan terms are identical?
Interest only loans
A mortgage that is intended to enable older households to "liquify" the equity in their home is the
Reverse annuity mortgage
A jumbo loan is
A conventional loan that is too large to be purchased by Fannie Mae or Freddie Mac
The maximum loan-to-value ratio for an FHA loan over $50,000 is approximately
The maximum loan-to-value ratio on a VA guaranteed loan is
Conforming conventional loans are loans that
Are eligible for purchase by Fannie Mae and Freddie Mac.
Home equity loans typically
Have tax-deductible interest charges
The best method of determining whether to refinance is to use
Net benefit analysis.
Probably the greatest contribution of FHA to home mortgage lending was to
Establish the use of the level-payment home mortgage.
Mortgage banking companies:
Collect monthly payments and forward them to the mortgage investor.
In recent years, the mortgage banking industry has experienced:
Currently, which type of financial institution in the primary mortgage market provides the most funds for the residential (owner-occupied) housing market?
For all except very high loan-to-value conventional home loans the standard payment ratios for underwriting are
28 percent and 36 percent
The numerator of the standard housing expense (front-end) ratio in home loan underwriting includes
Monthly principal, interest, property taxes, and hazard insurance.
The most profitable activity of residential mortgage bankers is typically
The normal securitization channel for jumbo conventional loans is
The reduced importance of certain institutions in the primary mortgage market has been largely offset by an expanded role for others. Which has diminished and which has expanded?
Savings and loan associations; mortgage bankers.
Warehousing in home mortgage lending refers to
Short-term loans made by commercial banks to mortgage bankers
A salesperson who collects a down payment deposit from a potential buyer must place the funds in
The hands of his broker.
One of the most effective ways that salespersons or brokers can distinguish themselves as a preferred agent in a particular specialization of real estate brokerage is to
Obtaining a related industry designation.
A broker, acting as the agent of a seller, must deal honestly and fairly with whom?
Everyone involved in the transaction
Real estate salespersons can lose their licenses for
Commingling escrow (trust) money with personal funds.
The state real estate commission is responsible for
Establishing education requirements for licensees
Real estate brokers are paid commissions primarily for
Providing a service.
A real estate broker is what type of agent for his or her principal?
The sub agency relationship that traditionally has characterized multiple listing services (MLS) has tended to result in the wide-spread danger of:
Unintended dual agency
How are commission rates charged by real estate brokers determined?
By agreement between broker and principal
According to most listing contracts, a broker has earned a commission when
The broker finds a buyer who is ready, willing, and able to buy on the terms specified in the listing contract
If a buyer defaults on a contract to purchase real property, which of the following is not a remedy the seller can pursue?
Sue for assignment.
When contracts for the sale of real property are placed with a disinterested third party for executing and closing, they are said to be placed in:
Which of the following conditions would be a defect to mutual assent in a contract for the sale of real property?
One party attempts to perpetrate fraud on the other
Oral evidence in contract disputes is prohibited by:
The parol evidence rule
Which of the following is one of the terms of a real estate contract?
Price to be paid
An earnest money deposit is:
A payment of money by a buyer to evidence good faith
In most straightforward transactions involving houses or other relatively small properties, the contract is:
A form, with blanks filled in by the broker.
Equitable title to real estate is:
The right to obtain legal title conveyed by the contract for sale.