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10 Cards in this Set
- Front
- Back
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1. A buyer’s ________ is their ability to make mortgage payments, as evaluated by their debt-to- income (DTI) ratio. pg 370 a. balance sheet b. mortgage capacity c. loan-to-value ratio (LTV) d. yield spread premium (YSP) |
b. mortgage capacity |
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2. The ________ insures mortgages with high loan-to-value ratios (LTV) that are made with less demanding cash down payment requirements than loans originated by conventional lenders. pg 376 a. Truth-in-Lending Act b. Keep Your Home California program c. MGIC Investment Corp. d. Federal Housing Administration (FHA) |
d. Federal Housing Administration (FHA) |
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3. A __________ occurs when a seller carries back a note executed by the buyer to evidence a debt owed for the purchase of the seller’s property. pg 384 a. short sale b. mortgage cramdown c. seller financing arrangement d. loan assumption |
c. seller financing arrangement |
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4. The tax impact a carryback seller will receive on their carryback financing is ________ category income, regardless of whether the property sold was in another income category. pg 385 a. portfolio b. passive c. earned d. deductible |
a. portfolio |
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5. The amount of interest a private, non-exempt lender can charge is regulated by statute and the California Constitution, collectively called: pg 389 a. usury laws. b. Fair Housing Laws. c. private mortgage insurance (PMI). d. loan sharking. |
a. usury laws. |
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6. The most common penalty suffered by a non-exempt private lender in violation of usury laws is: pg 392 a. a five year jail sentence. b. the forfeiture of all interest paid on the loan. c. the forfeiture of all principal remaining due. d. a $100,000 fine. |
b. the forfeiture of all interest paid on the loan. |
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7. Default mortgage insurance coverage provided by private insurers for conventional loans with loan-to-value ratios higher than 80% is referred to as: pg 397 a. the loan-to-value ratio (LTV). b. homeowners’ insurance. c. private mortgage insurance (PMI). d. American Land Title Association (ALTA) insurance. |
c. private mortgage insurance (PMI). |
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8. A note calling for the entire amount of its principal to be paid together with accrued interest in a single lump sum when the principal is due is called a(n): pg 402 a. straight note. b. installment note. c. interest-extra note. d. interest-included note. |
a. straight note. |
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9. ________ call for periodic adjustments to the interest rate and the amount of scheduled payments. pg 404 a. All-inclusive trust deeds (AITDs) b. Adjustable rate mortgages (ARMs) c. Fixed-rate mortgages d. shared appreciation mortgages (SAMs) |
b. Adjustable rate mortgages (ARMs) |
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10. A mortgage providing for installment payments to be periodically increased by predetermined amounts to accelerate the payoff of principal is known as a(n): pg 405 a. shared appreciation mortgage (SAM). b. graduated payment mortgage (GPM). c. adjustable rate mortgage (ARM). d. all-inclusive trust deed (AITD). |
b. graduated payment mortgage (GPM). |
