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Real Estate Finance Quizzes

Terms in this set (50)

Congress created the Federal Housing Administration in ___________.

a. 1949
b. 1939
c. 1984
d. 1934
(d) 1934
In order to qualify for exemption from capital gains, the property must have been the primary residence for two of the previous _____ years.

a. 6
b. 3
c. 5
d. 4
c. 5
A loan with no discount points is known as a(n) ________.

a. Birdie loan
b. Par loan
c. Interim loan
d. Air loan
b. Par loan
Funding includes which of the following activities?

(a) Transferring funds to a title or escrow company for disbursement
(b) Maintaining records of payment
(c) Building the loan file
(d) Evaluating the loan app.
(a) Transferring funds to a title or escrow company for disbursement
The monetary policies of the _________ affect interest rates and the availability of funds.

(a) Local economy
(b) Federal Reserve
(c) U.S. Congress
(d) Securities Exchange Commission
(b) Federal Reserve
Which of the following is NOT one of the three major national credit reporting agencies?

(a) Experian
(b) Equifax
(c) Equisearch
(d) Transunion
(c) Equisearch
How many credit scores do consumers have?

(a) 1
(b) 2
(c) 3
(d) Up to 12
(c) 3
Which of the following statements is NOT true of underwriting?

(a) Underwriters try to determine risk to prevent default.
(b) Both the applicant's credit history and the value of the subject property are analyzed during the underwriting phase.
(c) Underwriter's analyze creditworthiness of applicants for the lender.
(d) Underwriting is the final step in the mortgage loan process.
(d) Underwriting is the final step in the mortgage loan process.
In 2008, President Bush signed the _________ law.

(a) Dodd-Frank Act
(b) Housing and Economic Recovery Act
(c) Community Reinvestment Act
(d) Federal Fair Housing
(b) Housing and Economic Recovery Act
What is fiat money?

(a) Currency that is not backed by any precious metals.
(b) Currency backed by silver and gold.
(c) Currency backed by gold only.
(d) Currency backed by platinum.
(a) Currency that is not backed by any precious metals.
At the treasury level, funds can be raised to pay for government spending by increasing borrowing and _________.

(a) Raising taxes
(b) Offering discounts on government securities
(c) Raising the cost of real estate
(d) Flooding the market with money
(a) Raising taxes
The ____________ is the interest rate a reserve bank charges eligible financial institutions to borrow funds on a short-term basis.

(a) Basis point
(b) Index rate
(c) Consumer price index
(d) Discount rate
(d) Discount rate
The Fed uses three primary monetary policy tools to influence the cost and availability of credit: open-market operations, the discount rate and ___________.

(a) Statutory authority
(b) Taxation
(c) Reserve requirements
(d) None of these are correct
(c) Reserve requirements
The __________ charters, regulates and supervises all national banks and federal savings associations.

(a) OPP
(b) OCC
(c) TARP
(d) IRS
(b) OCC
__________ occurs when there is an excess of money supply in the market.

(a) Deflation
(b) The Discount Rate
(c) The Federal Funds Rate
(d) Monetary inflation
(d) Monetary inflation
The FDIC insurance limit for deposits is:

(a) $100,000
(b) $200,000
(c) $250,000
(d) $1,000,000
(c) $250,000
There are _______ Federal Home Loan Banks in the United States.

(a) Five
(b) Twelve
(c) Sixteen
(d) Fifty
(b) Twelve
When the costs of production and services increase, causing manufacturing prices to rise, it is called __________.

(a) Cost-push inflation
(b) Demand-pull inflation
(c) Double inflation
(d) Push-pull inflation
(a) Cost-push inflation
The Dodd-Frank Wall Street Reform and Consumer Protection Act, signed into law in 2010, established the ____________.

(a) Office of Consumer Credit Commissioner
(b) Consumer Financial Protection Bureau
(c) Community Development Block Program
(d) Department of Housing and Urban Development
(b) Consumer Financial Protection Bureau
Real estate transactions regulated by the Office of Consumer Credit Commissioner include which of the following?

(a) Home equity loans
(b) Home improvement loans
(c) Secondary mortgages
(d) All of these transactions are regulated by the Office of Consumer Credit Commissioner
(d) All of these transactions are regulated by the Office of Consumer Credit Commissioner
The Community Reinvestment Act, enacted in __________, ensures that banks serve the needs of the community in which they were chartered.

(a) 1995
(b) 2010
(c) 1977
(d) 1974
(c) 1977
Which one of these programs is not administered by HUD?

(a) FHA
(b) CFPB
(c) CDBG
(d) Ginnie Mae
(b) CFPB
Which of the following transactions is exempt from RESPA?

(a) Loans intended for sale in the secondary market
(b) Loans for manufactured homes
(c) Temporary loans
(d) Loans made in connection with a HUD program
(c) Temporary loans
Established in 1968, __________ operates a mortgage-backed securities program designed to facilitate the flow of capital into the housing industry.

(a) Freddie Mac
(b) Ginnie Mae
(c) Fannie Mae
(d) Farmer Mac
(b) Ginnie Mae
The Housing and Economic Recovery Act was enacted in _____________, and created the Federal Housing Finance Agency (FHFA).

(a) 1938
(b) 1968
(c) 1992
(d) 2008
(d) 2008
The secondary mortgage market was designed to provide greater liquidity to the residential real estate market, primarily by _______________.

(a) The sale of mortgage loans as investments
(b) Loaning money to primary market lenders
(c) Charging additional interest to borrowers
(d) Funding savings institutions in areas experiencing regional shortages
(a) The sale of mortgage loans as investments
A __________ lender is one who funds mortgage loans from deposits on hand, retaining the loans long term.

(a) Primary
(b) Secondary
(c) Portfolio
(d) Private
(c) Portfolio
Which of the following statements is INCORRECT?

(a) Ginnie Mae securities are the only mortgage-backed securities to carry the credit guaranty of the U.S. Government.
(b) Ginnie Mae was established to promote home ownership in the United States
(c) Investment in Ginnie Mae MBS is very safe for investors.
(d) Ginnie Mae sells mortgage-backed securities and purchases mortgage loans.
(d) Ginnie Mae sells mortgage-backed securities and purchases mortgage loans.
The FHFA maximum loan limits for conventional loans acquired by Fannie Mae and Freddie Mac increased in 2017 for the first time since ______.

(a) 2001
(b) 2006
(c) 2010
(d) 2008
(b) 2006
Which of the following housing objectives does Fannie Mae address?

(a) Regional imbalances of available mortgage credit
(b) The origination of mortgages for sale
(c) The standardization of mortgage loans
(d) Fannie Mae addresses all of these housing objectives
(d) Fannie Mae addresses all of these housing objectives
The Agricultural Credit Act, which established Farmer Mac to facilitate the creation of a secondary market for agricultural mortgage products, was passed in __________ by Congress.

(a) 1987
(b) 1997
(c) 1980
(d) 1932
(a) 1987
Which statement regarding savings and loans is INCORRECT?

(a) Savings and loans make loans for construction, purchase, repair or refinancing of houses.
(b) Savings and loans have no state or federal charters.
(c) Savings and loans are usually locally owned and privately managed
(d) All of these statements are incorrect.
(b) Savings and loans have no state or federal charters.
A(n) _________ is a person, corporation or firm not otherwise in banking that provides its own funds for mortgage financing purposes.

(a) Mortgage broker
(b) Savings and loan association
(c) Mortgage banker
(d) Commercial banker
(c) Mortgage banker
Which act increased the insurance coverage on all federally insured credit union accounts up to $250,000?

(a) Community Reinvestment Act
(b) Equal Credit Opportunity Act
(c) SAFE Act
(d) Dodd-Frank Wall Street Reform Act
(d) Dodd-Frank Wall Street Reform Act
What percentage of its net income does an Equity Estate REIT distribute to investors in the form of dividends?

(a) 10-15%
(b) 20-25%
(c) 50%
(d) 95-100%
(d) 95-100%
What type of property might an Equity Estate REIT purchase?

(a) Office buildings
(b) Apartments
(c) Self-storage facilities
(d) All of these types of properties are purchased by Equity Estate REITs
(d) All of these types of properties are purchased by Equity Estate REITs
A _________ is a debt instrument.

(a) corporate bond
(b) savings account
(c) share of stock
(d) checking account
(a) corporate bond
Which of the following states is more popular with foreign investors?

(a) New Mexico
(b) Colorado
(c) Virginia
(d) Texas
(d) Texas
Which of the following is NOT reviewed by loan underwriters to determine creditworthiness?

(a) Collections, foreclosures, bankruptcies
(b) Credit scores
(c) Inquiries on credit report
(d) Social media platforms
(d) Social media platforms
_____________ inquiries are known as neutral inquiries because they are not rated as either positive or negative on a credit report.

(a) Periodic review
(b) Pre-approval
(c) Consumer initiated
(d) All of these inquiries are considered neutral
(d) All of these inquiries are considered neutral
The borrower is asked to provide their full name, _____________, social security number, and present address in Part III of the Uniform Residential Loan Application.

(a) Gender
(b) Marital status
(c) Credit history
(d) Employment status
(b) Marital status
_____________ credit cards typically have higher interest rates than ___________ cards.

(a) Secured, unsecured
(b) Unsecured, secured
(c) Debit, conventional
(d) None of these is correct
(a) Secured, unsecured
For a property to have value, it must have four characteristics, including demand, scarcity, _____________, and transferability.

(a) utility
(b) F=functional obsolescence
(c) appraisal
(d) depreciation
(a) utility
Default can lead to a number of negative consequences for the defaulting party, including __________.

(a) Damage to credit score
(b) Default-related fees
(c) Foreclosure
(d) Default can lead to any or all of these negative consequences
(d) Default can lead to any or all of these negative consequences
A ___________ cannot be accepted from borrowers who can financially afford their mortgage payments.

(a) Short sale
(b) Refinance
(c) HECM
(d) Deed in lieu
(d) Deed in lieu
In order to qualify for the Streamlined Modification Program, borrowers must have missed _______ or more monthly payments on loans originated before 2008.

(a) 1
(b) 2
(c) 3
(d) 12
(c) 3
The type of foreclosure that involves the lender filing a lawsuit on the homeowner that has defaulted is known as _______.

(a) judicial foreclosure
(b) strict foreclosure
(c) power of sale
(d) statutory foreclosure
(b) strict foreclosure
The Mortgage Debt Relief Act of 2007 allows taxpayers to exclude up to __________ of debt on their principal residence.

(a) $500,000.00
(b) $1,500,000.00
(c) $2,000,000.00
(d) $20,000,000.00
(c) $2,000,000.00
In order to qualify for HAFA, a borrower must not have been convicted within the last ______ of felony larceny, theft, fraud, forgery, or tax evasion in connection with real estate transactions.

(a) 20 years
(b) 10 years
(c) 7 years
(d) 6 months
(b) 10 years
Which agency oversees HAMP?

(a) USDA
(b) United States Mint
(c) FHFA
(d) HUD and the Department of the Treasury
(d) HUD and the Department of the Treasury
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