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266 Cards in this Set
- Front
- Back
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At the center of nearly all real estate transaction is some kind of?
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Financing
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What did early societies use as security for debts
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Land
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The concept of the gage used by early German lenders was?
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A deposit made in promise of the fulfillment of an agreement
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In medieval England, the basis for prohibiting charging interest for money loaned was throught to be
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Natural Law
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Early in the growth of the US a lack of ____ prevented the mortgage lending business from becoming an important part of the economy.
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Cash deposited as savings
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In the early part of the 19th Century, who was allowed by law to print money?
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Almost anyone, including states, private banks, and individuals
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In the mid 19th Century what was the common loan to value ratio used by lenders in Midwestern US
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40-50%
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A non-amortizing loan is a loan
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Where none of the principal is included in the payments
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Disintermediation refers to
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Withdrawal of money from saving accounts
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What does a lender do to offer forbearance on a loan
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Allows borrowers to temporarily stop making morgage payments.
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In early society, which of the following indicatd wealth
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Land
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In Germany after the fall of the Roman Empire what was a Live Gage
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An item of personal property used as collateral for a loan
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What was the right of the borrower to regain ownership after default called, starting in Elizabethan England
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Equitable right of redemption
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What caused the development of the farmer mortgage business in the US in the 19th Century
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the need to borrow to finance new farms as families moved into remote areas of the country
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During the 19th Century mortgage lenders in the Midwest financed farms with a loan to value ratio of
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40-50%
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What is a nonamortized loan
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A loan where none of the principal is included in the payment
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What section of the busienss world is usually the first to notice a change, either up or down in the health of the economy
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real estate market
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What is disintermediaton
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withdrawing from savings accounts
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The 1989 legislation that gave authority to the bailout of the savings and loans industry by the federal government was
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Financial institition of Reform
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What was the best period of wage growth at all levels of employment in the last 30 years
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1990s
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Chapter 2
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Chapter 2
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Which of the following is not considered part of real property
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crops grown for sale
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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
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estate in revision
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which of the following is NOT personal property
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appurtenance
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real property includes all of the following except
oil airspace minerals water rights |
oil
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The measurement of a township is
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36 square miles
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The term "riparian right" refers to the rights of the owner of property bordering a
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stream or river
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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
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Sharon's Heirs
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How many sections are in a township
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36
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When personal property is attached to a building and becomes real property it is known as
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a fixture
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Trade fixtures would normally be used
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in the conduct of business
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The rights that go along with ownership of real property are called
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Bundle of rights
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Which kind of estate may be willed
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freehold
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The ownership interest or claim a person has in real property is known as
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an estate in real property
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Another name ofr a leasehold estate is
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less than freehold
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Personal property is
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movable
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Chattel is
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personal property
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WHen real property is sold anything that hs been attached to it
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goes to the buyer
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Under the doctrine of correlative user
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an owner may take only his or her share of the underground water
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The method of land description most likely to beused in a city is
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Recorded lot, block and tract system
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Encumbrances that create a legal obligation to repay a debt is called
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liens
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the chain of title is
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a recorded history of matters such as conveyances and other facts
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which of hte following is a on-money encumbrances
easement mechainic liens judgment trust deed |
easement
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which of the following gives constructive notice of the sale of real property
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recording of the grant deed
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ownership is severally means ownership by
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one person or entity
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a lien may be created by recording
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a trust deed
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what distinguishes a joint tenancy from a tenancy is common
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right of survivorship
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easements are
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encumbrances
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what kind of notice does recording give
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constructive
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threee people own a piece of property as tenants in common. what can be determined from the ownership
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degree of interest ownership per tenant in common cannot be determined
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Which of the following is benefited by an easement appurtenant
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a dominant tenement
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vesting refers to
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how property is owned
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how does a corporation take title to real property
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severalty
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in the interst each person has in tenanchy in commoni is not stated in the deed
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it is understood that each owner has equal interest
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all of the following are liens against real property except
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encroachments
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agreements effecting the use of real property are known as
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covenants, conditions, and restrictions
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deed restriction are imposed on a property by
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the developer
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which of the following is a legal non exclusive use of someones eles's property
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an easement
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a claimant has how many days to bring foreclosure action after a mechanic lien is recorded
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90%
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When money is loaned to finance real property, the security for the loan is called
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collateral
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any loan payment is significantally larger than any of the other payments is called an
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ballon payment
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which of the following is the evidence of a debt
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promissory note
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a check is a
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negotiable instrument
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a loan that may be increased without rewriting the trust deed is known as a
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open end loan
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Payment interest only is what type of loan
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straight note
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whena borrower fails to pay, it is known as
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default
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the principal on a loan is
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amount borrowed
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when a lender carries back a note secured by a trust deed from the buyer, the seller becomes the ______ and the buyer becomes the __________
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beneficiary, trustor
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When an owner uses a property as security for a loan, but does not give up possession it is called
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hypothecation
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a written promise to pay back a certain sum of money at a specfied terms at an agreed upon time is
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a promissory note
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which of the following is the security for a debt
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mortgage
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an "or more" clauses allows
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a borrower to pay off a loan early with no penalty
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someone who buys an existing negotiable note is known as
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the holder in due course
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if there is a conflict in the terms of the note and the trust deed or mortgage used to secure it, which will control
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the provision of the note will control
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what clause allows a lender to call the entire note due....
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accelaration clause
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whenever there is seller financing in a real estate transaction the law requires the buyer and seller to complete a
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seller financing disclosure statement
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note calls for payment of interst only
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a straight note
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which of the following is inconsistent with the others
agreement of sale contract sale land contract |
all inclusive trust deed
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Chapter 5
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Chapter 5
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Which of the following are parties to a trust deed
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trustor, trustee, bene
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When payment in full is made the ____ issues a ded of reconveyance upon request from the ___________
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trustee; beneficiary
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How long is the statue of limitations on a mortgage?
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4 years
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Generally, the states that use ______ conduct judicial foreclosures
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Mortgages
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When a borrower does not pay on a loan secured by a trust deed, what must be recorded to start foreclosure
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notice of default
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Under a trust deed, the trustor is the party who
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signs a promissory note and deed of trust
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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
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trustor to the trustee
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A strictt foreclosure allows a lender to
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get title to the property immediately upon default
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After a foreclosure, it there is any money left over in excess of the loan amount and other fees, the lender must
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return any proceeds to the borrower
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Another name for non judicial foreclosure is
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foreclosure by power of sale
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The interest of a credtor (lender) in the property of a debtor (borrower) is called the
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security interest
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Which of the following is not mentioned in a trust deed
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notice of deficiency
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who is the lender
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beneficiary
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bare legal title is held by
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trustee
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the trustee may become involved in only tow processes what are they
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foreclosing and reconveying the loan
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the statute of limitations runs out of a note secured by a mortgage in
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four years
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The equity of redemption allows a borrower in default to
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redeem the property for specified time period before or after the foreclosure sale
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satisfaction of a mortgage requires which of the following
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payment in full
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a lender's remedy for default on a loan is
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foreclosure
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what is a junior lienholder
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the holder of a second mortgage
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Chapter 6
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Chapter 6
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Which of the following is a non-institutional lender?
Commerical bank saving bank private individuals credit union |
Private individuals
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Saving banks receive most of the money that they loan out from
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sasving deposited by customers
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Large commercial loans would most likely be made by an
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insurance company
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the majority of residential loans are originated by
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mortgage bankers
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Investors with small amount of capical can pool their resources to buy real estate throught
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Real estate investments trust
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The process of depositors removing funds from savings is called
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disintermediation
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Which of the following are primary sources of construction loans
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commercial loans
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in the late 1970's one of the main reasons for the flow of funds out of savings and loan associations was
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uncontrolled inflation
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What kind of bank is owned by depositors whoses return on their investments is determined by how successful the bank's investmens strategies are
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mutual savings bank
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All of the following are non financial institutions except
universities pension funds credit union title companies |
credit unions
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Institutions that make real estate loans are known as
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financial intermediaries
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Which of the following are all purpose lenders
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commerical banks
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the largest single resource for residential mortgage credit is
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thrifts
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one of the following is not a thrift institution
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mortgage bankers
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one of the main reasons for the flow of funds out of the S&L associations in 1980 was
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deregulation of the industry
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Saving and loan legislation in 20th century
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The Garn St. Germain Depository Institution Action of 1982
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The type of institution owned by the depositors who return on their investment is determined by the success of the bank's investment strategy
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Mutual savings bank
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Who makes mortgage loans to consumers and sells them to institutional investors
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mortgage banks
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The process of assembling into on package a number of mortgage loans, prior to selling them to an investor is called
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warehousing
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Chapter 7
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Chapter 7
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The system of lending institutions, private investors, and government credit agencies that buys pools of loan from orginators is known as the
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secondary mortgage market
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the instrument used to secure a loan on a personal property is the
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security agreement
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The nation's largest source of financing for home mortgages is the
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Federal National Mortgage Association
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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
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open-ending lending
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What type of loan allows for the interest reate to adjust periodically in relationship to a predetermined index plus a pre-established margin
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Adjustable rate mortgage
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What is the name of the nation's central bank
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Federal Reserve Bank System
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The job of the Federal Reserve Bank System is to regulate
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the flow of money and credit to promote economic growth with stability
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The federal Open Market Committee (FOMC)establishes the goals of
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Monetary policy
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What statement must be provided to a borrower by anyone negotiationg a loan
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Mortgage Loan Disclosure Statement
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How many Federal Reserve Banks are there
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12
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The process of depositors removing funds from saving is called
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disintermediation
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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
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deregulation
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The economic system in America is a
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mixed capialistic system
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Which of the following is not a tool of the Fed in regulation the economy
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regulation of secondary money market
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The primary mortgage market is where lenders make mortgage loans directly to
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borrowers
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Chapter 8
All of the following are government agencies except |
federal national morgage association
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Which of the following does not participate in the secondary market as a major players
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Federal Reserve System
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The real estate law requires anyone negotiating a loan to have
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a real estate license
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The instrument commonly used to secure a loan on personal property is known as a
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security agreement
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All of the following are default insurance plans Except
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Farmers Insurance Administration
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The four types of mortgage default insurance are
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partial coverage
full coverage coinsurance self insurance |
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What type of mortgage default insurance would require the lender to carry the entire risk
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self insurance
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The two government agencies that participate in real estate financing are
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FHA, VA
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The FHA program is part of the ___ Federal agency
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HUD
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Which agency guarantees Loan
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VA
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Which of the following government programs does not require a down payment on loans up to a certain loan amount
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VA
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Which of the following statements is true regarding a veterns eligibility
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He or she may restore eligibility when the original loan has been paid off
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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
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PMI
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What is one of the three basic default insurance plan
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HUD
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The four types of mortgage default insurance include all except
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Full coverage
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The FHA
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insures loans
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Who may obtain a FHA loan
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A citizen who qualifies
a veteran a retiree |
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VA
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Guarantees loans
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Who may obtain a VA loan
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eligiable veterans
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A VA appraisal is called
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Certificate of reasonable value
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Who administers the Cal Vet Program
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The California Department of VA
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Who holds legal title to the property under a Cal Vet Loan
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California Department of Veteran Affairs
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Buyers with less than ___ percent down payment are normally required to pay PMI
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20%
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Chapter 9
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Chapter 9
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For the average consumer, the biggest barrier to thriving as a real estate investor has always been
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lack of knowledge
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Which of the following is not a type of return on investment
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depreciation
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The most common method used to determined the dollar amount per year that will be deducted for depreciation on income property is
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straight line
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A investor may defer capital gain earned froom the sale of income property
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by using an installment sale
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the first step for a new real estate investor is to
|
clarify goal
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steps to relocating the right investement property include all but...
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reviewing the business plan
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The final stage of a real estate purchase is
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the closing statement
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In the purchase of investment property, a mortgage is part of the
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acquisition cost
|
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the process of calculating a property's present worth on the basis of its capacity to continue producing an income stream is called
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capitalization
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What is a lender's preferred measurement of a property's ability to pay its mortgage debts
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debt service ratio
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Depreciation for tax purposes is based on
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the calculated useful life of teh property
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Capital gains taxes are always due on the sale of all except
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a personal residence with certain exceptions
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|
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Operating expenses include
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taxes
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What may not be depreciated
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Land
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Gross income is
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the total annual income less vacancy or rental losses
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The net operating income may be calculated by
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substracting operating expenses from the annual gross income
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what is one way to improve cash flow
|
lower expenses
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a condo conversion may be said to
|
subdivide a property's air space
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when investors sell real property they must pay
|
capital gain taxes
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|
|
Chapter 10
|
Chapter 10
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|
|
The job of a mortgage loan professional is to
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help the customer complete a loan application
|
|
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a recent convenience to a borrower is being able to
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make a loan application over the phone
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the most common way for a morgage lender to attract customer is by
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referral from a real estate agent
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when obtaining a loan, the most critical charge to a buyer is the
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interest rate
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thirty years ago a home buyers choices for loans were generally limited to
|
fixed rate loans
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retail loan orgination is commonly offered by
|
small banks or small financial institutions
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a retain mortgage loan orginator is normally paid a commission of
|
1% of the loan amount
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a retail mortgage originator gets paid
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upon funding of the loan by the lender
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when a mortgage lender acquires a processed loan from another loan professional who has orginated the loan, the operation is called
|
wholesale mortgage lending
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|
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an orginating lender generally gets paid in part through an application fee paid by the
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prospective borrowers
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The retail approach to loan orgination is most likely to be used by
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smaller banks
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a retail mortgage loan orginator is normally paid a commission of ____% of the loan amount payable upon funding of the loan
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1%
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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
|
|
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who orginates third-party orgination loans
|
HUD
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|
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when a mortgage lender acquires a processed laon from another laon professinal who has orginated the loan, the operation is called
|
wholesale mortgage lending
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|
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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
|
|
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how does an orginating lender get paid
|
by the morgage loan servicer
|
|
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what is the most important benefit to the wholeslae lender
|
being able to process and approve each new loan
|
|
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A negative factor for a wholesale lender is
|
no money to be make in servicing loans
|
|
|
Chapter 11
|
Chapter 11
|
|
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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
|
|
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which of the following is an example of deferred maintenance
|
negligent care for a building plumbling system
|
|
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when using the cost approach an appraiser commonly uses all of the following information except
|
a capitalization rate
|
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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
|
|
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the appraisal approach that is most easily understood and most commonly used by real estate agent is the
|
sales comparision approach
|
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a ___ is conducted to give an unbiased estimate of the value of the real property
|
appraisal
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the first step in the apprasial procecss is
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defining or stating the problem
|
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Which approach is most often used for appraising new buildings
|
cost approach
|
|
|
a Kiosk is
|
a free standing information booth
|
|
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The most appropriate use of the income approach is
|
rental property
|
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the most thorough and complete appraisal report is
|
a narrative report
|
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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
|
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which is the least desireable type of lot
|
key lot
|
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the term highest and best use means
|
highest net return
|
|
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What reflects the price paid
|
book value
|
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|
all of teh following elements of value except
scarcity demand utility plottage |
plottage
|
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which of the following is needed to use the capitalization approach
|
net income
|
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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
|
|
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the maximum loan amount will be determined by the
|
value of the property and the borrower's financial condition
|
|
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a debt to income ratio is the percentage of the borrower's
|
before tax gross income used to pay monthly debts
|
|
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if a borrower makes a small down payment the
|
qualifying guidelines are more rigid
|
|
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the lender's security for repayment of a loan if a borrower defaults is the
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property being purchased
|
|
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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
|
|
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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
|
|
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what would be an indication of whether a borrower will repay a loan
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the borrowers credit histor
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after settlement loan servicers must deliver once a year to borrowers
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annual escrow statement
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the _____ appraiser determines the value of the property
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appraiser
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The process of ____ involves the evaluation of both property and the borrower
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loan underwriting
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The loan to value ration is the relationship between the_____
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amount borrowed and the value of the property
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mortgage debt ratio of front end ratio for a loan is determined by
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calculating the percentage of monthly income necessary to meet the monthly housing expense
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monthly payments other than housing are known as
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back end debt
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Chapter 14
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Chapter 14
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who performs the day to day management of individual loans
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the loan servicers
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what law was passed in 1990 to protect borrowers from abuses that were occuring during the loan servicing period
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THe national affordable housing act
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Borrower cannot be charged a late fee until
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60 days
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Who should a borrower contact if there is a complaint against a loan servicer
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HUD
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Who makes the decision to transfer a loan to a service company
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the company holding the loan
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If a borrower has a face to face interview with a lender he or she must receive the disclosure statement
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at the time of the loan application
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on flood and hazard insurance who responsibility is it to provide the insurance agent or company with a notice of transfer
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the older servicer
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Chapter 15
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Chapter 15
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What do creditors look for a borrowers
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ability to repay debt and williningness to do so
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consumers are given an equal chance to obtain credit
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Equal Credit Opportunity Act
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Disclosures about its terms and costs
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Truth in Lending Act
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What acts requires lenders to provide information to help the public determine how well lending institutions are serving the housing community
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Home Mortgage Disclosure Act
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The ____ ensures that all consumers are given an equal chance to obtain credit
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The equal credit Opportunity Act
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when was the first civil rights leglislation enacted
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1964
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____ prohibits discrimination based on race...
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Jones v Mayer
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Under the fair housing act penalities range from up to ___ for a first violation
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$10,000
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