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127 Cards in this Set
- Front
- Back
- 3rd side (hint)
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Which of the following authorizes the use of the "power of Sale" in a deed of trust? |
Beneficiary |
Trustor Court Beneficiary Trustee |
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Why would a seller accept an agreement for sale instead of a purchase money mortgage? |
The seller can keep the deed until the carryback is paid. |
-The agreement gives more flexibility to the buyer -The seller can keep the deed until the carryback is paid. -The buyer can prevent foreclosure -The purchase money mortgage note is more negotiable |
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The redemption period on a deed of trust following the trustees sale is: |
Does not exist |
30 days 90 days 6 months Does not exist |
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Who benefits from the assignments of rents clause? |
Beneficiary |
Trustee Mortgagor Beneficiary Vendee |
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A trustee under a deed of trust would not be involved in which of the following circumstances? |
Collection of monthly loan payments |
-Loan paid in full -Issuance of the Deed of Reconveyance -Trustor is delinquent -Collection of monthly loan payments |
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Which of the following requires lenders to inform borrowers, when buying a home, secured by a mortgage or trust deed, of all finance charges, fees and interest at the time of signing the loan documents? |
Regulation Z |
HUD FHA Regulation Z RESPA |
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After a mortgage forclosure any excess monies would go to the: |
Mortgagor |
Trustee Mortgagee Motgagees attorney Mortgagor |
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The supply and cost of money can be most effectively controlled by: |
Federal Reserve System |
FHA interest rates Stock prices Federal Reserve System Supply and Demand |
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The office of thrift supervision is the governing body for: |
Savings and loan associations |
Mortgage bankers Savings and loan associations Commerical banks FNMA |
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Which of the following would be an interest in Real Property? |
Fences |
Trade Fixture Fences Note Chattels |
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Except during a time of emergency, property cannot be confiscated through use of : |
Police Power |
Escheat Eminent Domain Police Power Condemnation |
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Which of the following would be a limitation of use of property by the government? |
Police Power |
Police Power Escheat Taxes Deed Restrictions |
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Which of the following is not compatible with Joint Tenancy? |
Probate |
Survivorship Probate Right of Possession Equality of rights |
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Which of the items listed below is an interest in Real property but not an estate? |
Mortgage |
Remainder Mortgage Reversion Leasehold |
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When the rent paid by the lessee, per their lease agreement, is less than the economic rent, this is called: |
Positive Leasehold |
Negative leasehold Ground Rent Positive Leasehold Excess Rent |
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A corporation is not permitted to take title to real property as: |
Both B and C |
Tenancy in Common Community Property Joint Tenancy Both B and C |
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Which type of tenancy requires only the unity of possession? |
Tenancy in Common |
Tenancy in Common Joint Tenancy Community Property Severalty |
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Which one of the following is not considered a "less-than-freehold" estate? |
Estate for years |
Estate for years Estate at Will Estate at sufference Life Estate |
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A party has the right to place a sign on your property. He has an easement: |
In gross |
By necessity Appurtenant By prescription In gross |
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When an easement only has a servient tenement it would be an easement: |
In Gross |
Appurtenant Prescription In Gross License |
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The grantor of an interest in real property may, upon violation of conditions in a deed by the grantee regain his interest. This is known as the possibility of: |
Reverter |
Rejoinder Rescission Reverter Remainder |
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What common element would apply to Tenancy in Common? |
Unequal Interests |
Right of survivorship Acquired at the same time Unequal interests Applies only to husband and wife |
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If a husband and wife decided to take title as tenancy in common, which of the following would apply? |
Husband and wife may have unequal interest |
Husband and wife must have equal interest -Right of successorship would exist. -Husband and wife may have unequal interest -They would own the property as sole and separate. |
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A quit claim deed is commonly used to: |
Release an interest in title. |
Convey title Release an interest in title Secure a loan Cloud the title to real property |
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An affidavit of value requires which of the following? |
All of these |
Grantors name and sig. Grantees name and sig Sales price of property All of these |
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Which of the following type deeds would NOT give a bona fide buyer insurable quality of title to realty? |
Quit claim deed |
Warranty Deed Special Warranty Deed Quit claim deed Bargain and Sale Deed |
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A devise is an example of a/an ______ conveyance |
Testimentary |
Involuntary Deductive Testimentary Defeasible |
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Which of the following warrants title by the seller for them and under them only. |
Special Warranty Deed |
General Warranty Deed Special Warranty Deed Quit Claim Deed Disclaimer Deed |
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Who has the weakest claim to title? |
A person living off the property with a quit claim deed |
-A person living on the property with a deed -A person living off the property with a recorded grant deed -A person living off the property with a quit claim deed -A person living on the property with a recorded grant deed |
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When purchasing a piece of property in which your spouse is not to have any interest, which deed would be used to relinquish any rights to the property? |
Disclaimer Deed |
Quit claim deed Gift Deed Disclaimer Deed Releasing deed |
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Which of the following documents would be used to remove cloud on the title? |
Quit claim deed |
Special Warranty Deed Quit Claim Deed Disclaimer Deed Bargain and Sale deed |
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A mechanics lien, once filed, is a valid lien on the subjects property for how long? |
6 months |
90 days 60 days 6 months 1 year |
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What is the borrowing instrument that permits additional sums of money to be loaned by the same security device? |
Open end note and mortgage |
Subordination clause Partial advance Obligatory advances Open end note and mortgage |
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Which of the following is a security instrument in a real estate transaction? |
Trust deed |
Note Trust Deed Easement Estoppel |
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Arizona State Law provides for which of the following in regards to a mechanics lien? |
Assignment of the lien |
-Extension of time for filing lien by agreement -Assignment of the lien -Filing within 60 days for the original contractor -Priority over mortgages and other liens, including property tax liens |
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In states allowing a trust deed, which of the following is NOT true? |
A trust deed conveys legal title to the trustor |
-A trust deed serves as security for the debt -A trust deed substitutes for the first mortgage -A trust deed conveys legal title to the trustee -A trust deed conveys legal title to the trustor |
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A trust deed is signed by the: |
Trustor |
Trustor Trustee Beneficiary Trustee and Beneficiary |
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The Real Estate Settlement and Procedures Act applies to all of the following EXCEPT: |
Commercial Loan |
FHA VA A loan sold to Fannie Mae Commercial Loan |
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The agency that regulates Reg Z is: |
FTC |
HUD VA FTC RESPA |
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Real estate loan usury rates are set by: |
State Laws |
Federal Laws State Laws Code of real estate Statute of frauds |
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A trustor lists his property for sale. He was notified of default on the trust deed, which had occurred 45 days prior to notification. The Trustor, under these conditions: |
May sell the property within the 90 day reinstatement period |
-Cannot sell the property without the trustees permission -Cannot sell the property without the beneficiarys permission -May sell the property within the 90 day reinstatement period -Must bring all payments current before signing a purchase contract with a potential buyer |
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The lender may consider his mortgage or trust deed to be: |
Personal Property |
Estates in Land Personal Property Real property An encumberance on his property |
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Which of the following cannot be a trustee? |
CPA |
Savings and loan institutions Attorney Real Estate Broker CPA |
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Which of the following carries out the "Power of Sale" in a deed of trust? |
Trustee |
Trustor Court Beneficiary Trustee |
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A trustees fee under a deed of trust is: |
.005 of the existing loan balance |
1/2 of 1% of the original loan balance -.05 of the existing loan -.005 of the existing loan -.005 of the original loan |
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As a salesperson, you sell a piece of property for your client in which he takes back a purchase money mortgage as part payment. The buyer in this situation becomes the: |
Mortgagor |
Mortgagee Mortgagor Grantor Beneficiary |
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A wraparound loan would never be which of the following? |
a first deed of trust |
An agreement for sale a junior a first deed of trust a purchase money mortgage |
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Which of the following would NOT apply to a deed of trust? |
Redemption periods |
Redemption periods Option to judicially foreclose Reinstatement period Curing the default |
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Which of the following would not occur in a forbearance? |
Foreclosure sale |
Work out Deferment Moratorium Foreclosure sale |
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You own a piece of land that is free and clear, you borrow against your equity on a first deed of trust. You then buy a mobile home and live on the property. The lender can foreclose against: |
The land only |
The mobile home only The land only The mobile home and land Neither if the property was less that 2n1/2 acres |
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How much time fo you have to reinstate on a default of carryback loan? |
60 dayss |
30 days 60 days 120 days 9 months |
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The vendor has elected to foreclose an agreement for sale as a mortgage. Which of the following applies? |
Redemption |
Redemption Reinstatement Forefeiture No foreclosure is allowed |
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A contract is written so the seller will carry back a potion of the sales price. After the close of escrow, the seller sells the carry-back loan to another party. Which statement describes this action? |
Assignment of Beneficial interest |
Assignment of beneficial interest assumption with novation subordination clause sale with leaseback |
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When a lenders advertising is considered bait and switch it would be regulated by: |
Truth in Lending |
Federal Reserve Fair Housing act of 1988 Truth in Lending Sherman antitrust laws |
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According to RESPA, a lender must disclose which of the following? |
If the loan will be sold |
If the loan will be sold The reason the loan was denied Other lenders with lower rates What loan is best for the borrower |
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Truth in Lending Act regulation would apply is a loan has more than: |
4 payments |
1 payment 2 payments 3 payments 4 payments |
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When the seller creates a wraparound loan with the buyer the benefit to the seller would be: |
Arbitrage |
Estate for years Arbitrage Negative Amortization Novation |
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When the federal reserve wants to stimulate the economy, they would: |
Lower reserve requirements |
Raise interest rates Raise the discount rate Lower the FHA qualifying rates Lower reserve requirements |
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According to RESPA, what is the maximum amount of tax reserves a lender may impound? |
Two Months |
one month 2 months 3 months 6 months |
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The book "settlement costs and you" is a requirement of: |
RESPA |
Federal Reserve Regulation Z RESPA Fair Housing Act |
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A mortgage broker would differ from a mortgage banker in that: |
A banker can service the loans |
A broker can service the loan A banker can service the loan A broker would only make FHA & VA loans A banker has a strict loan limit |
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When a buyer takes over a sellers loan "subject to", which of the following is true? |
Seller is still liable for the loan |
Seller is still liable for the loan Seller is released of all loan liability Buyer assumes all loan liability Lender will make the buyer qualify for the loan |
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To negotiate a "tax deferred exchange: without the payment of any tax at the time of the exchange, an apartment house owner could trade for: |
An apartment house, and assume a loan equal to or greater than the loan on his property, and no boot |
-An apartment and $2,000 boot -An apartment house and assume a smaller loan on his property. -A residence of equal value, and no boot. -An apartment house, and assume a loan equal to or greater than the loan on his property. |
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How many times in 10 years could a single person sell their personal home and recieve, tax-free, a gain of $250,000? |
5 times |
Once Twice 5 times Not available to single taxpayers |
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If a partner shop does not pay its debts, the creditors may collect from the personal assets of: |
General Partners |
Limited Partners General partners Stockholders of an incorporated company None of the above |
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Short term captial gains are taxed at: |
Ordinary income tax |
Max of 15% Max of 20% max of 28% Ordinary income tax |
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Which of the following relate to "joint and several" liability: |
General Pertnership |
Limited partnership General Pertnership Corporation REIT |
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All of the following relate to commercial real estate depreciation EXCEPT: |
Land Value |
Economic Life Straight Line 39 years Land Value |
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The maximum amount of gain that would be tax-free to a married homeowner who sells their personal residence would be: |
$500k |
$125k $250k $500k Unlimited |
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To recieve a tax free sale of your principal residence, the homeowner must live in the property for at least: |
2 years |
6 months 12 months 18 months 2 years |
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Which of the following is true regarding an S corporation? |
Limited number of investors |
Personal Liability Double Tax Limited number of investors Higher tax rate than a regular corp. |
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The required down payment by the VA of a non-graduated payment garaunteed loan is ___% of the loan amount |
0% |
3.8% 1.25% 3.5% 0% |
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FHA monthly loan payments include all of the following EXCEPT: |
Pre Paid Loan Interest |
Loan principal Pre-paid property taxes pre paid property insurance Pre paid loan interest |
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The "escape clause" in FHA insures financing of a home purchase is the: |
Clause protecting the lender from loss he might sustain in the event of a forclosure |
-PrePayment rights of the buyer -Clause protecting the lender from loss he might sustain in the event of foreclosure. -Right of the buyer to withdrawn if the appraisal is lower than the contract price -The right for future loan assumption with novation |
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FHA Title I was created for which of the following reasons? |
Home improvement loans |
-Home purchases -Home improvement loans -Graduated payment loan -Created the Fed. National Mortgage Association |
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The Mortgage Insurance Premium required for an FHA insured loan would least likely benefit which of the following? |
Borrower |
Borrower Lender FHA HUD |
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The interest on a conventional loan is: |
Simple |
Compound Simple Pre paid Insured |
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Which of the following conventional loan to value ratios would not need private mortgage insurance? |
80-20% |
80-20% 85-15% 90-10% 95-5% |
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The total amount of the VA gauranteed loan entitlement is: |
Determined by congress |
The amount of the loan 10% of the loan 100% of the loan Determined by congress |
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A veteran wishes to place a refinance loan on his existing home with a VA loan. The lender will make the loan at 10% and 2 points. Which of the following statements are true? |
The veteran may take the loan and pay the points |
VA loans are only available for the first time purchases -The veteran can take the equity loan but pay no points -The veteran can be required to pay up to one point as long as it is called an origination fee -The veteran may take the loan and pay the points |
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When a new FHA loan is acquired the mortgage insurance premium: |
Is an up-front and monthly premuim |
-Is paid by the lender -Is a quaterly payment -Cannot be added to the loan -Is an up-front and monthly premium |
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Which of the following is FALSE regarding a VA loan? |
Borrower cannot pay more than the Cert. of Reasonable Value |
-Property must be owner occupied -The loan is garaunteed -The loan is fully amortized -Borrower cannot pay more than the Cert. of Reasonable Value |
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If FHA is to insure a loan placed by a lender for the purchase of Real estate, each of the following must be met EXCEPT: |
Government funds must be available |
-Govn't funds must be available -Mortgage Insurance Premium must be prepaid -There is a set ratio of loan to property values -The building and the borrower must meet the standards set by FHA |
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If a buyer wants to purchase a property with an FHA Insured Loan you would refer him to: |
Primary Market |
FHA Secondary Market HUD Primary Market |
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PMI will automatically be eliminated from a conventional loan under what curcumstances? |
When the loan amount is reduced to 78% |
After 5 years of payments Upon borrower becoming disabled When the loan is sold to FNMA When the loan amount is reduced to 78% |
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All of the following are true regarding an FHA insured loan EXCEPT |
Us citizenship is required. |
-Require a larger downpayment -No pre-payment penalty -Borrower is subject to 1% loan origination fee -US Citizenship is required, |
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The maximum VA loan limit is: |
determined by the lender |
Set by VA is 4x the gaurantee Determined by the lender 60% of eligibility |
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FHA and VA loans would cover: |
Single and multi-family unites |
Non-Owner occupied rental properties Home and business loans Land Loans Single and multifamily units |
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Conventional Lenders receive their financial resources from: |
Daily Depositors |
Fed Govt Fed Reserve Fed National Mort. Association Daily Depositors |
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an FHA loan would NOT include which of the following? |
Due on Sale Clause |
OR MORE clause Full Amortization Due on Sale clause Discount points |
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Private Mortgage Insurace covers: |
Portion of the loan over 80% |
The entire loan 20% of the loan Portion of the loan over 80% Portion of the loan over 20% |
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All of the following are advantages of variable rate loan except |
Annual Adjustments |
No prepayment penalty Annual adjustments Assumability Lower Initial Interest Rate |
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A lender would add a margin to an index to accomplish which of the following? |
To keep current with the cost of new mortgages |
To have an amortized loan To Keep current with the cost of new mortgages To avoid a prepayment penalty To avoid private mortgage insurance |
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When determining the FRONT END ratio of a loan which of the following would be used? |
Monthly PITI divided by Gross Monthly Income |
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Monthly payments on a FHA loan would most likely increase due to a: |
Rise in insurance |
Rise in Insurance Rise in interest rate Shortening of the length of the loan Change in loan amount |
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When a variable rate loan quotes a specific margin, which of the following are true? |
The margin may not increase more than 2% annually |
-The margin is adjusted annually -The margin is set at time of loan -The margin may not increase more than 5% over life -The margin may not increase more than 2% annually |
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Interest rates on FHA loans are determined by: |
Market Conditions |
HUD Congress Market Conditions FHA Administration |
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The main appeal of FHA loans to the borrower lies in: |
Minimum down payment |
Low interest rates Minimum down payment Unlimited mortgage ceiling Easy accessibility |
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A variable loan is characterized by: |
Amortized payment |
A balloon payment Interest only payment Principal only payment Amortized payment |
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Variable rate loans are normally used when: |
Conventional rates are High |
-Conventional rates are low -The loan is non-conforming -Conventional rates are high -When the borrower is trying to avoid paying points |
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When a fixed rate 30 year loan is partially prepaid, this will have an effect of: |
Shortening the life of the loan |
lowering monthly payments Shortening the life of the loan Avoiding a pre payment penalty Lower total principal payment |
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FHA will insure loans on all of the following EXCEPT: |
Twenty unti Apartment building |
Single family residnece Owner occupied duplex Owner occupied four plex Twenty unit apartment building |
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The borrower would sign a notice called "Importance of a Home Inspection" when buying under which of the following conditions? |
FHA loan |
Cash sale VA loan a loan with PMI FHA loan |
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The BACK END ratio of a loan would apply to: |
Total Monthly Obligation divided by Gross Monthly Income |
-Sales price compared to annual gross income -Monthly loan payment compared to monthly gross income -Total monthly obligation divided by gross monthyl income -Total TAX obligation divided by annual gross income |
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When a lender is allowed to determine if a borrower qualifies for FHA insurance the process is called a: |
Direct Endorsement |
Certificate of Eligibility Direct Endorsement Conditional commitment Primary lender financing |
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When a lender reviews a FICO score for a borrower it tells the lender if: |
The borrower has sufficient credit |
The borrower has sufficient credit The loan will be a mortgage or a deed of trust The adjustable rate loan will have a cap The loan will have a pre payment penalty |
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When a loan is made to a borrower with poor credit and low ratios, this type of loan would be called: |
Sub Prime |
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Which of the following apply to a VA loan? |
Funding Fee |
Funding fee MIP PMI Front and back end rates |
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The VA Funding Fee would change based on: |
Loan to Value |
Loan to Value Length of service Amount of Loan insurance Military Rank |
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When a veteran pays off a VA loan in full, the veteran is entitled to: |
Reinstatement of full benefits |
Partial reinstatement Reinstatement of full VA benefits Return of MIP paid Return of PIM paid |
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In a Joint Venture: |
The land owner contributes the land to a new business entity and shares in the profits |
-The land owner contributes the land to a new business entitiy and shares in the profits -A wealthy individual contributes all the money needed for the business -The broker must be a general partner -The seller uses the installment sale tax deferral method |
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The term 'Cap Rate' refers to: |
The net income divided by the price |
-A factor of the price divided by the annual income -The cash flow divided by the cash investment needed -Future appreciation and tax shelter -The net income divided by the price |
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Adjusted gross income includes: |
Rents, minus vacancies, minus credit losses, plus other income |
Rents, minus expenses Rents, minus vacancies, minus expenses Rents minus vacancies, minus credit losses, plus other income Rents, minus vacancies, minus credit losses, minus expenses, plus other income |
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An Assignment of Lease form performs what function? |
Conveys the leasehold to the buyer of the business |
Conveys the leasehold to the buyer of the business Conveys the title of the real property to the buyer Conveys the title of the personal property to the buyer Conveys the title of the intangibles to the buyer |
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Permanent finance payments would include which of the following? |
Principal and Interest |
Interest only Principal Only Principal and interest Principal interest, loan insurance |
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Which of the following would be an advantage of an SBA loan? |
High loan to value ratio |
High loan to value ratio Low loan to value ratio No money down required Lender is guaranteed against all loss |
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The gross rent multiplier is calculated by: |
Dividing the price by the gross rents |
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When a lender makes a real estate loan, all of the following would be required EXCEPT: |
Filing of a U.C.C |
Extended ALTA insurance policy Property appraisal Environmental Study Filing of a U.C.C |
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When a lender requires a debt coverage ratio, this would relate to: |
The ratio of Annual Net Income to Annual Debt Service |
-The ratio of annual net income to annual debt service -The ratio of annual gross income to annual debt service -The ratio of loan to investor capital -A percentage of return to value paid |
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When a buyer of a business reviews a balance sheet, it would show: |
Net worth |
Monthly income Net worth Percentages of income and expenses Monthly expenses |
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The statute of frauds was brought into being to prevent: |
Perjury |
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According to the statute of frauds, which of the following need NOT be in writing to be enforceable at law? |
Agreements between two brokers to divide commissions. |
-Contracts between agent and principal in which commission is to be paid -Agreements between two brokers to divide commissions -A brokers authorization to sell real property. -A power of attorney for the sale of real estate |
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In filing a notice of intention to subdivide with the Real Estate Commissioner which of the following need NOT be stated? |
Floor plans for houses to be built |
-condition of title -Provisions for public utilities -Floor plans for houses to be built -copies of contracts to be used in the purchase |
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When a borkers license is revoked, the licenses of the salespeople in the brokerage agency are: |
Automatically Suspended |
Immediately revoked Automatically revoked Automatically suspended Unaffected |
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When a broker and a salesperson cannot resolve a dispute over a commission, their recourse is to: |
Bring action to court |
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Who is responsible for formulating the Commissioners Rules? |
Real Estate Commissioner |
State Legislature Advisory Board AZ Association or REALTORS Real Estate Commissioner |
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What is the maximum amount of personal money a broker can keep in his trust account? |
$3,000 |
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