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100 Cards in this Set
- Front
- Back
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In the case of a commercial warehouse, an appraiser would be most likely to use which of the following appraisal methods? a. square-foot method b. cubic-foot method c. sales comparison approach d. front foot method |
b. cubic-foot method |
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An investor is considering buying a 25 year old apt bldg. To obtain the most accurate estimate of accrued depreciation, the investor should: a. review the owner's income tax records b. review a current professional appraisal c. refer to age-life tables d. review the owner's profit & loss statements |
b. review a current professional appraisa |
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The most difficult type of depreciation to remedy is: a. physical deterioration b. functional obsolescence c. functional deterioration d. economic obsolescence |
d. economic obsolescence |
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A property was valued using the income capitalization approach. If the property taxes increase by $1000 with all other factors remaining the same, the property value will: a. increase by an amt more than the property tax increase b. increase by an amt. equal to the property tax increase c. decrease by an amt. more than the property tax increase d. decrease by an amt. equal to the property tax increase |
c. decrease by an amt. more than the property tax increase |
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Capitalization is: a. a mathematical process for converting net income into an indication of value b. commonly used in the income approach value c. the par value of the stock of a corporation plus the face amt. of outstanding bonds & loans d. all of the above |
d. all of the above |
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Adjusted gross income equals gross income minus: a. vacancy & collection losses b. depreciation c. maintenance costs d. taxes |
a. vacancy & collection losses |
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A straight note: a. means that the principal is owned as one lump sum at the end of the term b. may be secured by a mortgage for real property c. is a legitimate instrument for the sale of real estate d. all of the above |
d. all of the above |
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Amortization tables are used to determine a loan's: a. term b. monthly payment c. rate of interest d. anual percentage rate |
b. monthly payment |
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A property is being appraised using the gross rent multiplayer. A comparable property that rents for $150/month recently sold for $24,000. I f the property being appraised will rent for $165/month, the sales price would most likely be: a. $26,400 b. $27,500 c. $28,600 d. $90,775 |
a. $26,400 |
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Of the following, which type of appraisal report would be the most comprehensive? a. form report b. letter of opinion c. narrative report d. reconciliation |
c. narrative report |
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Lindsay & Shawn bought their first home, qualifying for a 30 yr loan. The lender required regular, equal payments, of sufficient size & number to pay all interest due on the loan & reduce the amt. owed to 0 by the loan's maturity date. What kind of loan they probably have? a. partially amortized loan b. ARM c. fully amortized loan d. interest only loan |
c. fully amortized loan |
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When a buyer assumes an existing loan, the assumption on the closing statement is shown as: a. a debit to the buyer b. a credit to the seller c. both a & b d. neither a nor b |
d. neither a nor b |
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The quickest way for a beneficiary to recover title after the trustor has defaulted is by: a. estoppel b. judicial precedent c. judicial foreclosure d. unlawful detainer |
c. judicial foreclosure |
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A hard money loan is secured by a promissory note & deed of trust. In this case, the phrase "hard-money" means: a. a cash loan b. a bridge loan c. secondary financing d. a purchase money deed of trust |
a. a cash loan |
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An alienation clause has traditionally not been permitted under which of the following types of financing? a. FHA b. Cal-Vet c. Conventional d. Private Loan |
a. FHA |
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Deficiency judgments are prohibited: a. in any Cal-Vet transaction b. when a cellular carries back c. if foreclosure under power of the sale takes place d. on hard money loans |
c. if foreclosure under power of the sale takes place |
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Which of the following insures a deed of trust? a. Cal Vet b. FHA c. GNMA d. FNMA |
b. FHA |
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The down payment required by the borrower for FHA financing: a. is 3% of the first $60,000, plus 5% of the difference up to the appraised value b. is 5% of the appraised value c. depends on the type of FHA program d. FHA allows no down payment |
c. depends on the type of FHA program |
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Which of the following belongs in the credit column of the seller's closing statements? a. cash charge for buyer's deed b. proration of prepaid rents c. proration of prepaid taxes d. cash charge for recording a quitclaim deed |
c. proration of prepaid taxes |
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Which of the following is most likely to require no down payment from the buyer? a. VA b. FHA c. Cal-Vet d. Conventional |
a. VA |
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An open-end mortgage allows a borrower: a. to create interim liens b. to make intermittent payments c. to secure additional funds without rewriting the original loan d. to obtain an interest rate lower than the current market rate |
c. to secure additional funds without rewriting the original loan |
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The government financing program under which approved applicants are required to apply for life insurance: a. Cal-Vet b. FHA c. VA d. all of the above |
a. Cal-Vet |
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Any loan payment that is significantly larger than any of the other payments is called: a. a final payment b. a balloon payment c. a credit payment d. an installment payment |
b. a balloon payment |
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When a seller carries back a note secured by a trust deed from the buyer, the seller becomes the_________, and the buyer become the________. a. beneficiary, trustor b. trustor, beneficiary c. trustee, trustor d. trustor, trustee |
a. beneficiary, trustor |
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Which of the following is the evidence of a debt? a. trust deed b. promissory note c. mortgage d. financing agreement |
b. promissory note |
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Which of the following are parties to a trust deed? a. trustor-trustee-grantee b. grantor-grantee-trustee c. trustor-trustee-beneficiary d. beneficiary-trustee-grantee |
c. trustor-trustee-beneficiary |
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Which of the following requires a judicial foreclosure? a. mortgage b. land contract with power of sale c. AITD d. trust deed |
a. mortgage |
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What is the system of lending institutions, private investors and government Credit agencies that buy pools of loans from loan originators? a. Federal Reserve system b. Federal banking system c. secondary mortgage market d. primary mortgage market |
c. secondary mortgage market |
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Of all the institutional lenders, which type makes the majority of home loans? a. mutual savings banks b. savings banks c. credit unions d. insurance companies |
b. savings banks |
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When a borrower fails to pay, it is known as: a. redemption b. reinstatement c. default d. devise |
c. default |
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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? a. notice of unlawful detainer b. notice of default c. notice of sale d. notice to vacate |
b. notice of default |
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Who holds the title to a property bought with a Cal-Vet entitlement? a. the veteran b. the trustee c. the CA Dept. of VA d. the VA |
c. the CA Dept. of VA |
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A bare lot would most likely be appraised using which of the following principals? a. principal of land use b. principal of substitution c. principal of correlation d. principal of net distribution |
b. principal of substitution |
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A kiosk is: a. the highest beam on a house b. a unit of measurement c. a free-standing info booth d. an Eskimo house |
c. a free-standing info booth |
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How are the improvements & the land valued when using the cost approach? a. separately, using the principal of substitution b. separately, by more than one approach c. together, using the principal of highest & best use d. together, using the market value approach |
a. separately, using the principal of substitution |
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Compared to an installment note, a straight note: a. has equal annual payments of principal b. has no payments of principal during the term of the loan until the last payment c. has a greater total effective interest rate d. none of the above |
b. has not payments of principal during the term of the loan until the last payment |
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On an installment note with a monthly payment of $218, the first payment has $6 going to principal and the rest to interest. On future payments: a. money decreases to principal & increases to interest b. money increases to principal & decreases to interest c. a balloon payment is due at the end of the term d. negative amortization is the result |
b. money increases to principal & decreases to interest |
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In a deed of trust, the power of sale is give to the: a. beneficiary b. office of the foreclosure marshal c. trustee d. office of the county clerk |
c. trustee |
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FHA & VA loans differ from most conventional loans insofar as: a. there are civil penalties for nonpayment of the loan b. there is a restraint on alienation of title c. they have no prepayment penalty d. the buyer must obtain a term life-insurance policy |
c. they have no prepayment penalty |
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A trustee sale has resulted in foreclosure. The trustee must wait at least 3 months before: a. recording a conveyance b. recording a notice of default c. posting a notice of sale d. recording a deficiency judgment |
c. posting a notice of sale |
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The interest rate may be increased or decreased during the term of the loan under which of the following government financing programs? a. FHA b. Cal-Vet c. VA d. both FHA & VA |
b. Cal-Vet |
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The punishment for false advertising by a broker is, among other things: a. $1000 fine b. $2000 fine c. $3000 fine d. $4000 fine |
a. $1000 fine |
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Failure to disclose that an advertiser is a licensee acting as an agent is known as: a. competitive advertising b. false advertising c. blind advertising d. unilateral advertising |
c. blind advertising |
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Amortization tables are used to determine a loan's: a. term b. monthly payment c. rate of interest d. annual percentage rate |
b. monthly payment |
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The lender of a 2nd deed of trust sells all interest in a property for less than the unpaid balance of the note. This practice is known as: a. discounting b. leveraging c. liquidating d. panic selling |
a. discounting |
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The power of 6 separate parcels of real property wants to offer all the parcels as security for a mortgage loan. The type of mortgage obtained will most likely be: a. blanket b. straight c. purchase money d. all-inclusive |
a. blanket |
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An agreement by a lender to offer a loan on real estate if and when the borrower demands it is known as a(n) ______________loan commitment. a. standby b. interim c. backup d. substituted |
a. standby |
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A standard policy of title insurance does insure the policy holder against loss occasioned by: a. changes in zoning ordinances b. improper delivery of a recorded deed c. easements by prescription not shown by public records d. claims of persons in physical possession of the property that are not shown by public records |
b. improper delivery of a recorded deed |
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Which of the following defined the term "equity" as used in real estate transactions? a. the owner's interest in real property over & above valid liens against it b. the difference between the fair market value or price of the property & the loan indebtedness against it c. the down payment on the property made at the time of purchase d. any of the above |
d. any of the above |
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Which of the following is not covered by the federal Truth-in-Lending Act? a. a $20,000 agricultural loan b. a $20,000 trust deed for a residence c. a $20,000 Cal-Vet loan for a residence d. a $60,000 trust deed for a residence |
a. a $20,000 agricultural loan
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Which of the following prohibits discriminatory loan practices on the part of financial institutions? a. Civil Rights Act of 1968 b. Housing Financial Discrimination Act of 1977 c. Equal Credit Opportunity Act d. Truth-in-Lending Act |
b. Housing Financial Discrimination Act of 1977 |
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When 2 or more separate parcels are combined to make the total more valuable, this practice is called: a. ownership in severalty b. plottage c. blocking d. accumulating |
b. plottage |
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Vacant land, in an unusually inactive market is best appraised by: a. highest & best use b. market approach c. cost approach d. residual value |
a. highest & best use |
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Which is the best approach when calculating the present value of a house built in 1910? a. replica cost of construction b. current construction cost c. original construction cost d. original construction cost w/ cost of living index |
b. current construction cost |
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In the case of a commercial warehouse, an appraiser would be most likely to use which of the following appraisal methods? a. square foot method b. cubic foot method c. sales comparison approach d. front foot method |
b. cubic foot method |
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The most difficult type of depreciation to remedy is: a. physical deterioration b. functional obsolescence c. functional deterioration d. economic obsolescence |
d. economic obsolescence |
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What type of insurance will a lender require to be verified by the escrow holder? a. health insurance b. auto coverage c. fire insurance d. accidental death |
c. fire insurance |
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Which Government Sponsored Enterprise (GSE) was initially created by Congress in 1938 to buy & sell FHA-insured loans from lenders, but since 1972 was permitted to buy & sell conventional conforming mortgages in the secondary mortgage market? a. Fannie Mae b. Freddie Mac c. Ginnie Mae d. Munie Mae |
a. Fannie Mae |
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A land project is a type of subdivision that has at least: a. 20 unimproved lots b. 50 unimproved lots c. 9000 registered voters d. 5000 registered voters |
b. 50 unimproved lots |
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Which agency gives a tax clearance receipt in the sale of a business? a. ABC b. Dept. of Bulk Sales c. HUD d. Board of Equalization |
d. Board of Equalization |
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The "adjusted cost basis" includes what additions to the "cost basis"? a. vacancy factor b. cost of improvements c. depreciation d. cost to purchase |
c. depreciation |
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Investors with a small amount of capital can pool their resources to buy real estate through: a. the stock market b. a Real Estate Investment Trust (REIT) c. foreclosure trusts d. savings banks |
b. a Real Estate Investment Trust (REIT) |
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The Real Estate Law requires anyone negotiating a loan to have: a. a securities license b. a loan broker license c. a real estate license d. a college degree |
c. a real estate license |
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A $540,000 house is built among houses worth $70,000 to $80,000. The new house's value will be effected by the less expensive houses. This represents the principle of: a. contribution b. regression c. progression d. change |
b. regression |
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Under the ECOA (Equal Credit Opportunity Act), a lender must provide an applicant a copy of the appraisal report obtained in connection with the loan for which the applicant applied. Which statement is incorrect? a. the applicant must send written request within a reasonable period of time of the application b. the lender must promptly send a copy of the appraisal report upon receiving the written request c. the applicant must pay for the cost of the appraisal in order to be entitled to a copy d. the lender may require the applicant to reimburse the lender for the cost of the appraisal |
c. the applicant must pay for the cost of the appraisal in order to be entitled to a copy |
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According to RESPA (Real Estate Settlement Procedures Act), which disclosure must be given to borrowers when they apply for a loan? a. Good Faith Estimate (GFE) of settlement costs b. Mortgage Servicing Disclosure Statement c. Special Information Booklet d. all of the above |
d. all of the above |
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The most commonly purchased form of title insurance is: a. standard b. ALTA c. ALTA-R d. RESPA |
a. standard |
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Colin held a standard policy of title insurance on a property that he purchased two years before his death. Shortly after Colin's death, hi heir Ben decides to present a claim based on a title defect. In this instance, Ben: a. does not have a claim because the title policy is only valid during Colin's life b. does not have a claim because the title policy guarantee is only for 1 yr c. would only have a claim if he was named in the title policy as an insured d. has a claim |
d. has a claim |
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On the GFE (Good Faith Estimate), how are fees & settlement charges determined? a. they are the actual cost of vendors b. they are the average of costs supplied by competitive bid c. they are the estimated, normal fees for the type of loan as known by the loan originator d. they are industry wide standard costs |
c. they are the estimated, normal fees for the type of loan as known by the loan originator |
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What is the main difference between the GFE & the HUD-1? a. the GFE is given at closing & the HUD-1 is given at application b. the charges on the GFE are actual, whereas those on the HUD-1 are estimates c. the charges on the GFE are estimated, whereas those on the HUD-1 are actual d. the only difference between the GFE & the HUD-1 is the timing of their delivery |
c. the charges on the GFE are estimated, whereas those on the HUD-1 are actual |
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Gene & Margaret borrowed $297,000, payable interest only, for 5 years. At the maturity of the loan, the full amt is due. This is know as a(n): a. straight note b. partially amortized note c. amortized note d. fixed interest note |
a. straight note |
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On an installment note with a monthly payment of $218, the first payment has $6 going to principal and the rest to interest. On future payments: a. money decreases to principal & increases to interest b. money increases to principal & decreases to interest c. a balloon payment is due at the end of the term d. negative amortization is the result |
b. money increases to principal & decreases to interest |
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In a deed of trust, the power of sale is given to the: a. beneficiary b. office of the foreclosure marshal c. trustee d. office of the county clerk
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c. trustee |
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FHA & VA loans differ from most conventional loans insofar as: a. there are civil penalties for nonpayment of the loan b. there is a restraint on alienation of the title c. they have no prepayment penalty d. the buyer must obtain a term life insurance policy |
c. they have no prepayment penalty |
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A trustee sale has resulted in foreclosure. The trustee must wait at least 3 months before: a. recording a reconveyance b. recording a notice of default c. posting a notice of sale d. recording a deficiency judgment |
c. posting a notice of sale |
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In a foreclosure, the reinstatement period is until_____ days before the date of the trustee's sale. a. 5 b. 21 c. 3 d. 45 |
a. 5 |
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The most expeditious way for a beneficiary to recover title after the trustor has defaulted is by: a. estoppel b. judicial precedent c. judicial foreclosure d. unlawful detainer |
c. judicial foreclosure |
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A hard money loan is secured by a promissory note and deed of trust. In this case, the phrase "hard money" means: a. cash loan b. bridge loan c. secondary financing d. purchase money deed of trust |
a. cash loan |
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An alienation clause has traditionally not been permitted under which of the following types of financing? a. FHA b. Cal-Vet c. Conventional d. Private Loan |
a. FHA |
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Deficiency judgments are prohibited: a. in any Cal Vet transaction b. when a cellular carries back c. if foreclosure under power of the sale takes place d. on hard money loans |
c. if foreclosure under power of the sale takes place |
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Which of the following insures a deed of trust? a. Cal Vet b. FHA c. GNMA d. FNMA |
b. FHA |
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Which of the following contains the largest area? a. 20% of a township b. 2 sections c. both a & b are correct d. neither a nor b is correct |
a. 20% of a township |
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Which of the following parties is required to pay the discount points charged for an FHA loan? a. the party who ordered the appraisal b. the buyer c. the seller d. the buyer or seller, depending on their agreement |
d. the buyer or seller, depending on their agreement |
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Which of the following is most likely to require no down payment from the buyer? a. VA b. FHA c. Cal Vet d. Conventional |
a. VA |
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The amount of VA guaranteed loan is limited to: a. $16,000 b. 35% of the purchase price c. 100% of the assessed value of the property d. the amount of the Certificate of Reasonable Value (CRV) |
d. the amount of the Certificate of Reasonable Value (CRV) |
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An open end mortgage allows a borrower: a. to create an interim liens b. to make intermittent payments c. to secure additional funds without rewriting the original loan d. to obtain an interest rate lower than the current market rate |
c. to secure additional funds without rewriting the original loan |
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The gov't financing program under which approved applicants are requires to apply for life insurance: a. Cal Vet b. FHA c. VA d. all of the above |
a. Cal Vet |
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The interest rate may be increased or decreased during the term of the loan under which of the following gov't financing programs? a. FHA b. Cal Vet c. VA d. both FHA & VA |
b. Cal Vet |
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Transfer of ownership to real property via the California Veterans Farm & Home Purchase (Cal Vet) Program is accomplished by means of which of the following docs? a. grant deed b. reconveyance deed c. real property sales contract d. warranty deed |
c. real property sales contract |
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An owner wishes to refinance a first trust deed. However, a second deed of trust is also in effect. In order to refinance property, the second trust deed should contain: a. an escape clause b. an alienation clause c. a subordination clause d. an acceleration clause |
c. a subordination clause |
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The best wood to ward off termites is: a. cedar b. redwood c. Douglas Pine d. Douglas Fir |
b. redwood |
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The party that generally benefits the most from a subordination clause in a deed of trust is the: a. trustor b. trustee c. beneficiary d. mortgagee |
a. trustor |
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The main purpose of a subordination clause is: a. to convert a freehold to a leasehold estate b. to make one encumbrance take an inferior position to another encumbrance c. to convert a deed of trust to a mortgage d. to transfer a first mortgage to another party |
b. to make one encumbrance take an inferior position to another encumbrance |
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A second trust deed with an unpaid balance of $5000 was sold for $3500. This is an example of: a. depreciating b. marginalizing c. discounting d. devaluing |
c. discounting |
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The due date for the 2nd installment of real property taxes is: a. Dec. 10 b. Feb. 1 c. Mar. 1 d. Apr. 10 |
b. Feb. 1 |
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Uncle Robert sells his house to his niece Judy. He accepts a small down payment and takes back the balance of $125,000 at 11% interest as a junior loan. Judy agrees to make payment of $1400/month which includes taxes & insurance. From the monthly payments, Robert puts aside a portion for the taxes and insurance and makes the payment on the existing underlying loan on the property. What type of financing did Robert provide for Judy? a. all inclusive b. overriding c. wraparound d. all of the above |
d. all of the above |
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The owner of 6 separate parcels of real property wants to offer all the parcel as security for a mortgage loan. The type of mortgage obtained will most likely be: a. blanket b. straight c. purchase money d. all inclusive |
a. blanket |
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Another name for panic selling is: a. redlining b. blockbusting c. fraud d. fearful negligence |
b. blockbusting |
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What is a "take out" loan? a. a short term interim loan b. a short term construction loan c. a long term loan taken out after construction d. a long term construction loan |
c. a long term loan taken out after construction |
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Which of the following lenders would tend to charge a buyer the most points during a tight money market? a. VA b. FHA c. Cal Vet d. a mortgage company |
d. a mortgage company |
