Finance !previously Incorrect Answers! (Part 1/2)

Front 1

The National Housing Act of 1934, in addition to providing for the insuring of loans, has had a number of secondary benefits, including all of these EXCEPT?

Back 1

Secondary Benefits: Instituting scientific subdivision planning to reduce neighborhood deterioration, stimulating mortgage investment on a nationwide basis ,creating a comprehensive system of valuing property and rating mortgage risk.

Excluding: establishing maximum standards of construction

Hint 1

The National Housing Act of 1934 created the FHA. The other three choices are all secondary benefits plus establishing minimum standards of construction, not maximum.

Front 2

A certain lender has the following lending policies and characteristics: makes many loans on commercial properties; makes relatively few construction loans; usually seeks to avoid administering loans; prefers to make long-term loans. This describes which lender?

Back 2

Life insurance companies

Hint 2

The characteristics listed describe those of an insurance company.

Front 3

In a period of inflation, the Federal Reserve Board would take which action to curb inflation?

Back 3

Raise reserve requirements and sell bonds

Hint 3

To curb inflation, the Federal Reserve Board would raise the reserve requirements for its member banks and enter into the bond market in a selling capacity. If the Federal Reserve Board reduced reserve requirements, lowered discount rates, or bought bonds, it would make more money available and create greater inflation.

Front 4

A balloon payment would be a characteristic of a(n)?

Back 4

partially amortized loan.

Hint 4

A partially amortized loan is not fully paid off in installments. On the due date, the balance is paid off in a lump sum called a balloon payment because it substantially exceeds any individual installment. The term "amortized" loan generally means "fully amortized." This is a loan fully paid off by installments over its term.

Front 5

Which would hold equitable title?

Back 5

Both trustor under a deed of trust and vendee under a land sales contract

Hint 5

Equitable title is the right to any equity in the property. Both the vendee (buyer) and trustor (buyer) would hold or retain equitable title.

Front 6

In a purchase money mortgage, the mortgagor is identified as the party who?

Back 6

signs the note.

Hint 6

The mortgagor is the buyer of the property who is borrowing the money and would therefore sign the note. The mortgagee is the receiver of the note who lends the money or extends credit.

Front 7

A person purchased a property for $70,000 and made a $14,000 down payment. If the person borrowed the balance of the purchase price, it would be considered a purchase money trust deed if the borrower received this amount from?

Back 7

The seller, a friend, or a lender.

Hint 7

If a deed of trust (or mortgage) is executed in the act of and for the purpose of purchasing property that is the security, it is a purchase money deed of trust (or mortgage), regardless of whether the beneficiary (lender) is the seller or a third party.

Front 8

A real property sales contract is defined as an agreement wherein one party agrees to convey title to another party upon the satisfaction of specified conditions set forth in the contract and that?

Back 8

Does not require conveyance of title within one year from date of formation of the contract.

Hint 8

"Does not require conveyance of title within one year from date of formation of the contract" completes the sentence in the question. The two parts constitute a quotation from section 2985 of the Civil Code, which defines a land contract.

Front 9

Which term relates specifically to the secondary money market?

Back 9

Discounting of mortgages

Hint 9

Mortgages (including notes and trust deeds) are frequently sold and exchanged in the secondary money market. They are usually sold at a discount.

Front 10

A trustor, under a deed of trust, defaults on a note and refuses to reinstate the loan. The most expedient thing for the beneficiary to do is to institute a?

Back 10

foreclosure sale.

Hint 10

A trustee's foreclosure takes approximately four months and is referred to as foreclosure sale. A sheriff's sale would be a court foreclosure known as a judicial foreclosure and could take up to four years.

Front 11

A purchase money mortgage may be defined as one?

Back 11

Taken on all or part of the purchase price.

Hint 11

A purchase money mortgage applies to any money used to purchase the ownership of property, either from credit extended by the seller ("soft money") or a cash loan from a lender ("hard money").