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266 Cards in this Set

  • Front
  • Back
At the center of nearly all real estate transaction is some kind of?
Financing
What did early societies use as security for debts
Land
The concept of the gage used by early German lenders was?
A deposit made in promise of the fulfillment of an agreement
In medieval England, the basis for prohibiting charging interest for money loaned was throught to be
Natural Law
Early in the growth of the US a lack of ____ prevented the mortgage lending business from becoming an important part of the economy.
Cash deposited as savings
In the early part of the 19th Century, who was allowed by law to print money?
Almost anyone, including states, private banks, and individuals
In the mid 19th Century what was the common loan to value ratio used by lenders in Midwestern US
40-50%
A non-amortizing loan is a loan
Where none of the principal is included in the payments
Disintermediation refers to
Withdrawal of money from saving accounts
What does a lender do to offer forbearance on a loan
Allows borrowers to temporarily stop making morgage payments.
In early society, which of the following indicatd wealth
Land
In Germany after the fall of the Roman Empire what was a Live Gage
An item of personal property used as collateral for a loan
What was the right of the borrower to regain ownership after default called, starting in Elizabethan England
Equitable right of redemption
What caused the development of the farmer mortgage business in the US in the 19th Century
the need to borrow to finance new farms as families moved into remote areas of the country
During the 19th Century mortgage lenders in the Midwest financed farms with a loan to value ratio of
40-50%
What is a nonamortized loan
A loan where none of the principal is included in the payment
What section of the busienss world is usually the first to notice a change, either up or down in the health of the economy
real estate market
What is disintermediaton
withdrawing from savings accounts
The 1989 legislation that gave authority to the bailout of the savings and loans industry by the federal government was
Financial institition of Reform
What was the best period of wage growth at all levels of employment in the last 30 years
1990s
Chapter 2
Chapter 2
Which of the following is not considered part of real property
crops grown for sale
carlos grants to laura a life estate, with the provision that upon the death of Laura the property is to revert back to carlos. what kind of estate does carlos hold
estate in revision
which of the following is NOT personal property
appurtenance
real property includes all of the following except

oil
airspace
minerals
water rights
oil
The measurement of a township is
36 square miles
The term "riparian right" refers to the rights of the owner of property bordering a
stream or river
Sharon grants her aunt a life estate for as long as her aunt lives. Upon the dealth of the aunt, the estate reverts back to Sharon. If Sharon dies before her aunt, who gets the estate when aunt dies
Sharon's Heirs
How many sections are in a township
36
When personal property is attached to a building and becomes real property it is known as
a fixture
Trade fixtures would normally be used
in the conduct of business
The rights that go along with ownership of real property are called
Bundle of rights
Which kind of estate may be willed
freehold
The ownership interest or claim a person has in real property is known as
an estate in real property
Another name ofr a leasehold estate is
less than freehold
Personal property is
movable
Chattel is
personal property
WHen real property is sold anything that hs been attached to it
goes to the buyer
Under the doctrine of correlative user
an owner may take only his or her share of the underground water
The method of land description most likely to beused in a city is
Recorded lot, block and tract system
Encumbrances that create a legal obligation to repay a debt is called
liens
the chain of title is
a recorded history of matters such as conveyances and other facts
which of hte following is a on-money encumbrances

easement
mechainic liens
judgment
trust deed
easement
which of the following gives constructive notice of the sale of real property
recording of the grant deed
ownership is severally means ownership by
one person or entity
a lien may be created by recording
a trust deed
what distinguishes a joint tenancy from a tenancy is common
right of survivorship
easements are
encumbrances
what kind of notice does recording give
constructive
threee people own a piece of property as tenants in common. what can be determined from the ownership
degree of interest ownership per tenant in common cannot be determined
Which of the following is benefited by an easement appurtenant
a dominant tenement
vesting refers to
how property is owned
how does a corporation take title to real property
severalty
in the interst each person has in tenanchy in commoni is not stated in the deed
it is understood that each owner has equal interest
all of the following are liens against real property except
encroachments
agreements effecting the use of real property are known as
covenants, conditions, and restrictions
deed restriction are imposed on a property by
the developer
which of the following is a legal non exclusive use of someones eles's property
an easement
a claimant has how many days to bring foreclosure action after a mechanic lien is recorded
90%
When money is loaned to finance real property, the security for the loan is called
collateral
any loan payment is significantally larger than any of the other payments is called an
ballon payment
which of the following is the evidence of a debt
promissory note
a check is a
negotiable instrument
a loan that may be increased without rewriting the trust deed is known as a
open end loan
Payment interest only is what type of loan
straight note
whena borrower fails to pay, it is known as
default
the principal on a loan is
amount borrowed
when a lender carries back a note secured by a trust deed from the buyer, the seller becomes the ______ and the buyer becomes the __________
beneficiary, trustor
When an owner uses a property as security for a loan, but does not give up possession it is called
hypothecation
a written promise to pay back a certain sum of money at a specfied terms at an agreed upon time is
a promissory note
which of the following is the security for a debt
mortgage
an "or more" clauses allows
a borrower to pay off a loan early with no penalty
someone who buys an existing negotiable note is known as
the holder in due course
if there is a conflict in the terms of the note and the trust deed or mortgage used to secure it, which will control
the provision of the note will control
what clause allows a lender to call the entire note due....
accelaration clause
whenever there is seller financing in a real estate transaction the law requires the buyer and seller to complete a
seller financing disclosure statement
note calls for payment of interst only
a straight note
which of the following is inconsistent with the others

agreement of sale
contract sale
land contract
all inclusive trust deed
Chapter 5
Chapter 5
Which of the following are parties to a trust deed
trustor, trustee, bene
When payment in full is made the ____ issues a ded of reconveyance upon request from the ___________
trustee; beneficiary
How long is the statue of limitations on a mortgage?
4 years
Generally, the states that use ______ conduct judicial foreclosures
Mortgages
When a borrower does not pay on a loan secured by a trust deed, what must be recorded to start foreclosure
notice of default
Under a trust deed, the trustor is the party who
signs a promissory note and deed of trust
when a power of sale clause is included in a trust deed, the right to sell a property in the event of default on the loan is given by the
trustor to the trustee
A strictt foreclosure allows a lender to
get title to the property immediately upon default
After a foreclosure, it there is any money left over in excess of the loan amount and other fees, the lender must
return any proceeds to the borrower
Another name for non judicial foreclosure is
foreclosure by power of sale
The interest of a credtor (lender) in the property of a debtor (borrower) is called the
security interest
Which of the following is not mentioned in a trust deed
notice of deficiency
who is the lender
beneficiary
bare legal title is held by
trustee
the trustee may become involved in only tow processes what are they
foreclosing and reconveying the loan
the statute of limitations runs out of a note secured by a mortgage in
four years
The equity of redemption allows a borrower in default to
redeem the property for specified time period before or after the foreclosure sale
satisfaction of a mortgage requires which of the following
payment in full
a lender's remedy for default on a loan is
foreclosure
what is a junior lienholder
the holder of a second mortgage
Chapter 6
Chapter 6
Which of the following is a non-institutional lender?
Commerical bank
saving bank
private individuals
credit union
Private individuals
Saving banks receive most of the money that they loan out from
sasving deposited by customers
Large commercial loans would most likely be made by an
insurance company
the majority of residential loans are originated by
mortgage bankers
Investors with small amount of capical can pool their resources to buy real estate throught
Real estate investments trust
The process of depositors removing funds from savings is called
disintermediation
Which of the following are primary sources of construction loans
commercial loans
in the late 1970's one of the main reasons for the flow of funds out of savings and loan associations was
uncontrolled inflation
What kind of bank is owned by depositors whoses return on their investments is determined by how successful the bank's investmens strategies are
mutual savings bank
All of the following are non financial institutions except

universities
pension funds
credit union
title companies
credit unions
Institutions that make real estate loans are known as
financial intermediaries
Which of the following are all purpose lenders
commerical banks
the largest single resource for residential mortgage credit is
thrifts
one of the following is not a thrift institution
mortgage bankers
one of the main reasons for the flow of funds out of the S&L associations in 1980 was
deregulation of the industry
Saving and loan legislation in 20th century
The Garn St. Germain Depository Institution Action of 1982
The type of institution owned by the depositors who return on their investment is determined by the success of the bank's investment strategy
Mutual savings bank
Who makes mortgage loans to consumers and sells them to institutional investors
mortgage banks
The process of assembling into on package a number of mortgage loans, prior to selling them to an investor is called
warehousing
Chapter 7
Chapter 7
The system of lending institutions, private investors, and government credit agencies that buys pools of loan from orginators is known as the
secondary mortgage market
the instrument used to secure a loan on a personal property is the
security agreement
The nation's largest source of financing for home mortgages is the
Federal National Mortgage Association
The process where financial institutions that formerly had been restrained in their lending activities by law, are allowed to compete freely for profits in the marketplace is known as
open-ending lending
What type of loan allows for the interest reate to adjust periodically in relationship to a predetermined index plus a pre-established margin
Adjustable rate mortgage
What is the name of the nation's central bank
Federal Reserve Bank System
The job of the Federal Reserve Bank System is to regulate
the flow of money and credit to promote economic growth with stability
The federal Open Market Committee (FOMC)establishes the goals of
Monetary policy
What statement must be provided to a borrower by anyone negotiationg a loan
Mortgage Loan Disclosure Statement
How many Federal Reserve Banks are there
12
The process of depositors removing funds from saving is called
disintermediation
A process where financial that formerlly had been restrained in their lending activities by the law were allowed to compete freely for profits in the marketplace
deregulation
The economic system in America is a
mixed capialistic system
Which of the following is not a tool of the Fed in regulation the economy
regulation of secondary money market
The primary mortgage market is where lenders make mortgage loans directly to
borrowers
Chapter 8
All of the following are government agencies except
federal national morgage association
Which of the following does not participate in the secondary market as a major players
Federal Reserve System
The real estate law requires anyone negotiating a loan to have
a real estate license
The instrument commonly used to secure a loan on personal property is known as a
security agreement
All of the following are default insurance plans Except
Farmers Insurance Administration
The four types of mortgage default insurance are
partial coverage
full coverage
coinsurance
self insurance
What type of mortgage default insurance would require the lender to carry the entire risk
self insurance
The two government agencies that participate in real estate financing are
FHA, VA
The FHA program is part of the ___ Federal agency
HUD
Which agency guarantees Loan
VA
Which of the following government programs does not require a down payment on loans up to a certain loan amount
VA
Which of the following statements is true regarding a veterns eligibility
He or she may restore eligibility when the original loan has been paid off
What is the extra insurance that lenders require from most homebuyers who obtain loans that are more than 80% of their new home's value
PMI
What is one of the three basic default insurance plan
HUD
The four types of mortgage default insurance include all except
Full coverage
The FHA
insures loans
Who may obtain a FHA loan
A citizen who qualifies
a veteran
a retiree
VA
Guarantees loans
Who may obtain a VA loan
eligiable veterans
A VA appraisal is called
Certificate of reasonable value
Who administers the Cal Vet Program
The California Department of VA
Who holds legal title to the property under a Cal Vet Loan
California Department of Veteran Affairs
Buyers with less than ___ percent down payment are normally required to pay PMI
20%
Chapter 9
Chapter 9
For the average consumer, the biggest barrier to thriving as a real estate investor has always been
lack of knowledge
Which of the following is not a type of return on investment
depreciation
The most common method used to determined the dollar amount per year that will be deducted for depreciation on income property is
straight line
A investor may defer capital gain earned froom the sale of income property
by using an installment sale
the first step for a new real estate investor is to
clarify goal
steps to relocating the right investement property include all but...
reviewing the business plan
The final stage of a real estate purchase is
the closing statement
In the purchase of investment property, a mortgage is part of the
acquisition cost
the process of calculating a property's present worth on the basis of its capacity to continue producing an income stream is called
capitalization
What is a lender's preferred measurement of a property's ability to pay its mortgage debts
debt service ratio
Depreciation for tax purposes is based on
the calculated useful life of teh property
Capital gains taxes are always due on the sale of all except
a personal residence with certain exceptions
Operating expenses include
taxes
What may not be depreciated
Land
Gross income is
the total annual income less vacancy or rental losses
The net operating income may be calculated by
substracting operating expenses from the annual gross income
what is one way to improve cash flow
lower expenses
a condo conversion may be said to
subdivide a property's air space
when investors sell real property they must pay
capital gain taxes
Chapter 10
Chapter 10
The job of a mortgage loan professional is to
help the customer complete a loan application
a recent convenience to a borrower is being able to
make a loan application over the phone
the most common way for a morgage lender to attract customer is by
referral from a real estate agent
when obtaining a loan, the most critical charge to a buyer is the
interest rate
thirty years ago a home buyers choices for loans were generally limited to
fixed rate loans
retail loan orgination is commonly offered by
small banks or small financial institutions
a retain mortgage loan orginator is normally paid a commission of
1% of the loan amount
a retail mortgage originator gets paid
upon funding of the loan by the lender
when a mortgage lender acquires a processed loan from another loan professional who has orginated the loan, the operation is called
wholesale mortgage lending
an orginating lender generally gets paid in part through an application fee paid by the
prospective borrowers
The retail approach to loan orgination is most likely to be used by
smaller banks
a retail mortgage loan orginator is normally paid a commission of ____% of the loan amount payable upon funding of the loan
1%
What was a major force of change in the mortgage lending market in the early 1980s
high volatility and instability of interest rates
unpredictable cycles of orginations in different areas of the country prevented mortgage bankers from
making long term projectins about where mortgage money was going to be needed
who orginates third-party orgination loans
HUD
when a mortgage lender acquires a processed laon from another laon professinal who has orginated the loan, the operation is called
wholesale mortgage lending
after the loan has been transferred to the wholesale lender, and has been funded either before the transfer or by the wholesale lender
it will be held in the lender's portfolio or sold on the secondary loan market
how does an orginating lender get paid
by the morgage loan servicer
what is the most important benefit to the wholeslae lender
being able to process and approve each new loan
A negative factor for a wholesale lender is
no money to be make in servicing loans
Chapter 11
Chapter 11
For demand to be effective the desire to buy must be couple with
ability to purchase
utility value refers to
the usefulness of a property
which of the following is an example of deferred maintenance
negligent care for a building plumbling system
when using the cost approach an appraiser commonly uses all of the following information except
a capitalization rate
in order to appraise a property that is unique or one of a kind the approach most likely to be used in the _____ approach
cost
the appraisal approach that is most easily understood and most commonly used by real estate agent is the
sales comparision approach
a ___ is conducted to give an unbiased estimate of the value of the real property
appraisal
the first step in the apprasial procecss is
defining or stating the problem
Which approach is most often used for appraising new buildings
cost approach
a Kiosk is
a free standing information booth
The most appropriate use of the income approach is
rental property
the most thorough and complete appraisal report is
a narrative report
in estimating the value of land what is the least important element
price asked
Granite evlis statutes on the front of an apartment building are considered a type of
functional obsolescence
the first thing to do in the appraisal process is
define the appraisal problem
which is the least desireable type of lot
key lot
the term highest and best use means
highest net return
What reflects the price paid
book value
all of teh following elements of value except
scarcity
demand
utility
plottage
plottage
which of the following is needed to use the capitalization approach
net income
Chapter 12
Chapter 12
What is probably the most time consuming part of the loan procedure
processing the loan
the company to which loan payments are made is the
original lender
the first step in the loan process is the
application
the maximum loan amount will be determined by the
value of the property and the borrower's financial condition
a debt to income ratio is the percentage of the borrower's
before tax gross income used to pay monthly debts
if a borrower makes a small down payment the
qualifying guidelines are more rigid
the lender's security for repayment of a loan if a borrower defaults is the
property being purchased
when borrowers apply for a mortgage brokers and or lenders must give the borrowers a special informatioin booklet providing the booklet is required by the
real estate settlement procedures
which of the following is not a step in getting a real estate loan
interview with the borrower
The company to which loan payments are made is referred to as the
servicer
to determine a consumer maxmum mortgage amount lenders use guidelines called
debt to income ratio
the standard loan application form used by almost every lender is called
uniform residential
the loan processor does all of the following except
funds the loan
The new technological advance being used by the mortgage lending industry is
automated underwriting
Chapter 13
Chapter 13
The practice of analyzing the degree of risk involved in a mortage loan is known as loan
underwriting
the total underwriting process involves the evaluation of the borrower and
the value of the property in question
Guidelines used to evalute a prospective borrower are called
underwriting guidelines
THe relationship between the amount borrowed and the value of the property is known as the
loan to value ratio
the lower th loan to value ratio
the lower the risk to the lender
a conventional loan is
made by an institutional lender
what would be an indication of whether a borrower will repay a loan
the borrowers credit histor
after settlement loan servicers must deliver once a year to borrowers
annual escrow statement
the _____ appraiser determines the value of the property
appraiser
The process of ____ involves the evaluation of both property and the borrower
loan underwriting
The loan to value ration is the relationship between the_____
amount borrowed and the value of the property
mortgage debt ratio of front end ratio for a loan is determined by
calculating the percentage of monthly income necessary to meet the monthly housing expense
monthly payments other than housing are known as
back end debt
Chapter 14
Chapter 14
who performs the day to day management of individual loans
the loan servicers
what law was passed in 1990 to protect borrowers from abuses that were occuring during the loan servicing period
THe national affordable housing act
Borrower cannot be charged a late fee until
60 days
Who should a borrower contact if there is a complaint against a loan servicer
HUD
Who makes the decision to transfer a loan to a service company
the company holding the loan
If a borrower has a face to face interview with a lender he or she must receive the disclosure statement
at the time of the loan application
on flood and hazard insurance who responsibility is it to provide the insurance agent or company with a notice of transfer
the older servicer
Chapter 15
Chapter 15
What do creditors look for a borrowers
ability to repay debt and williningness to do so
consumers are given an equal chance to obtain credit
Equal Credit Opportunity Act
Disclosures about its terms and costs
Truth in Lending Act
What acts requires lenders to provide information to help the public determine how well lending institutions are serving the housing community
Home Mortgage Disclosure Act
The ____ ensures that all consumers are given an equal chance to obtain credit
The equal credit Opportunity Act
when was the first civil rights leglislation enacted
1964
____ prohibits discrimination based on race...
Jones v Mayer
Under the fair housing act penalities range from up to ___ for a first violation
$10,000