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134 Cards in this Set
- Front
- Back
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As transportation cost increases:
value of land decreases relative to sililar parcels with lower transportation costs the value of all land increases the value of land increases relative to similar parcels with lower transportation costs none of the above |
a
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the tendency for sililar land uses to agglomerate is termed
performance zoning like-use zoning market-based zoning economic zoning |
d
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all of the following are examples of problems that may arise out of a purely free market solution to zoning except:
free-rider problem negative externalitites inequalities in bearing the costs to enforce positive zoning outcomes zoning restrictions |
d
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anb important limitation to the ise of private restrictions for controlling land use is often:
that they are seldom recognized by local jurisdications that they cannot be enforced via the court system they may be too costly to enforce they are not publicaly recorded |
c
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the authority to control and regulate land uses:
has never been legally contested in the court of law is generally vested in local jurisdictions is generally vested in the jurisdiction of the state is determined under the goverenments authority of eminent domain |
b
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a general guide to a community's future development which includes projections of its needs for infastructure, public service, land nad financial resources is termed:
land use plan zoning plan strategic plan comprehensive plan |
d
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in a planned unit development
setbacks requirements are eliminated and building density increased to encourage compact development patterns overall building density are generally increased over traditional plans building density are generally increased over traditional plans building densities may exceed the maximum allowed in some areas ion order to provide larger areas of open space in the pud building density requirments may be exchanged and assigned to other developments of the developer |
c
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land use standards that are based on the extent to which operations impose negative externalities on the surrounding parcels, such as the impact of traffic is termed
spot zoning performance zoning standards large lot zoning standards impact zoning standards |
b
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amounf other things, zoning is intended to:
mimimize the risks inherent in property ownership enhance the degree of certaity reguarding future development patterens and standards both neither |
c
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inverse condemnation is:
legal action for just compensation taken by a landowner against the government for a claimed partial taking, perhaps due to a change in zoning a taking on the part of the goverenmnt under the authority of eminent domain a claim against the government by an individual to reinstate their rights to occupy a property previously taken a legal action taken by a landowner against another citizen to secure rights the citizens property |
a
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notion that private property cannot be taken for public use comes for local goverenemtn ordincance and changes place to place
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F notion for just compensation for private property taking stems from a phrase in the constitution
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courts have overturned zoning ordinaces that do not provide for low and moderate income houseing on the grounds that they are exclusionary
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t
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a variance request if a rezoning request that involves a proposal to change the zoning classification of a paticular parcel
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F variance request is to change small things in the rules of existing zoning, such as setbacks
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concurrency requires the developer to pay for all new utilities and improvement such as intersections
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t
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the use of performance standards such as traffic capacity at site may be used in some communities in place of site specific zoning classifications
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t
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an urban services boundry establises of a boundry beyond which urban development is discouraged or prohibited
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t
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many communities have established perminent growth moritoriums to eliminate future growth
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f it is temporary to make sure the right infastructure get put in place
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randon is a waste component of nucelar energy
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F naturally occuring radioactive gas
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a phase II EVA is required when phase III report reveals a lot of toxic waste
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F phase 2 required when phase 1 revels shit in the environment
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easements are generally identified and recorded in the subdivision plat, and they bind all future purchases by references in deeds to restrict and easment of record
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t
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in the traditional sales comparison approach the appraise reconciles the ----- to determine the ----
indicated sale price, final adjustment value indicated sale price, indicated value adjustment sale price, final adjustment value final adjusted sale prices, indicated value |
d
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changes in market conditions resulted from:
increase or decrease in demand inflation increse or decrease in supply all of the above |
d
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a technique which identifies two or more properties that are similar in all respects except for one, in order to estimate the value of the component is termend:
multiple regression analysis characteristic adjustment analysis paired-data analysis comparable sales analysis |
c
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the cost of a building today to be replicated in the same way is refered to as
reproduction replacemnt renovation replication cost |
a
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the estimated constant in a linear multiple regression model represents:
contribution of all factors that are not explained by the equation and to which the coefficient are added the explanatory power of the estimated regression model the average contribution of the model to the actual selling price the relative power of the estimated regression model to predict value |
a
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any loss of a buildings value due to excessive traffic noise is termed:
physical deterioration external obsolescence functional obsolescene remote depreciatiuon |
b
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the monthly gross rent multiplier is the monthly gross rent divided by the sale price of the property
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Fsale price divided by monthly gross rent
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the cost approach is most valuable for estimation the value of properties more than 30 years old such as historic properties
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F newer properties
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the sales comparision approach is applicable to almost all 1 to 4 family residential properties and to many larger income producing properties
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t
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if subject property is better than comparable property the subject property would be adjusted upwards
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F comparative property upwards
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a nonarm's length transaction means the buyer and seller dont have equal bargan with respect to negotiating the sale price
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t
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an adjustment in the normal sale price due to change in market conditions results in a market-adjusted normal sale price estimate
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t
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multiple regression analysis is especially useful in estimation the value of residential properties where data is liimited
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F when large number of transactions can be identified
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in multiple regression models the R2 stat measures how well the model "fits" the data
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t
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the estimated beta coefficient on the square footage of living area variable represents its marginal value
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t
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curable elements of depreciation are those whose cost exceed the value added when they are fixed or replaced
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F no greater than the value added by replacment
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a projects NOI is calculated by:
deducting all expenses and allowances from properties effective gross income deducting all expenses and allowences from properties potential gross income deducting all expenses, allowences, and capital expenditures from propperties effective gross income deducting all expenses, allowances, and capital expenditures form the properties potential gross income |
a
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which of the following expenses is not an operating expense
capital improvement expenditures management fees utilities fees advertising |
a
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in cases in which appreciation is expected in a properties NOI and market value, the overall yeild YO on a property is:
less than overall cap rate, RO greater than equity dividen rate RE less than mortgage cap rate RM greater than overall cap rate RO |
d
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dividing the equity income BTCF by equity dividend rate RE yields the:
value of the equity outstanding mortgage balance net operating income equity dividend ratio |
a
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a projects NOI is calculated by:
deducting all expenses and allowances from properties effective gross income deducting all expenses and allowences from properties potential gross income deducting all expenses, allowences, and capital expenditures from propperties effective gross income deducting all expenses, allowances, and capital expenditures form the properties potential gross income |
a
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which of the following expenses is not an operating expense
capital improvement expenditures management fees utilities fees advertising |
a
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in cases in which appreciation is expected in a properties NOI and market value, the overall yeild YO on a property is:
less than overall cap rate, RO greater than equity dividen rate RE less than mortgage cap rate RM greater than overall cap rate RO |
d
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dividing the equity income BTCF by equity dividend rate RE yields the:
value of the equity outstanding mortgage balance net operating income equity dividend ratio |
a
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the cap rate found by dividing the NOI of a recently sold property by its selling price does not take into account any estimate of the property;s future cash flows
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F cap rate determined by the NOI of a property by its selling price takes into account investors future cash flow expectations
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the allowance known as the reserve for replacement and other nonrecurring expenses is estimated by annualizing all the costs of periodically replacing the component of improvement that depreciates faster than the building itself like carpet
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t
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the equity dividen rate is obtained by dividing before tax cash flow by overall value of property
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F BTCF divided by value of equity
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the preferred method to estimate RO, if good price, income, and expense data are available, is mortgage-equity analysis
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F direct market extraction from sales data
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the mortgage constant can be thought of as the cap rate of debt financing
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t
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discount rates are the largest component of most cap rates
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t
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a clause which grants the holder of the note the right to all remaning payments on the loan should the borrower default
accelerated due-on-sale interest escalation or adjustment prepayment insurance |
accelaration clause
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an acceleration clause that is enforceable upon the sale of the property
accelerated due-on-sale interest escalation or adjustment prepayment insurance |
due on sale clause
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a clause that allows lenders to adjust the interest rate charged with respect to stated index
accelerated due-on-sale interest escalation or adjustment prepayment insurance |
interest escalation and adjustment clause
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a clause that imposes a penalty on borrowers for making early payments of principle on the amount borrowed
accelerated due-on-sale interest escalation or adjustment prepayment insurance |
prepayment clause
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a clause which requires borrowers to make payments of their hazard insurance premium along with their periodic payment of principle and and interestaccelerated
due-on-sale interest escalation or adjustment prepayment insurance |
insurance clause
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technically a mortgage is best defined as:
a loan from a lending institution a loan on a property a contractual pledge for real estate to serve as collateral for a loan all of the above |
c
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in the U.S.
goverenmnt encourages the development of mortgage securities wall street investment banks participate in the commercial mortgage market equity financing sources include life insuracne companies all of the above |
d
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the secondary mortgage market serves as:
a source for the sale of mortgages to investors a source for loan origination a source for loan renegoation all of the above |
a
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firms which assist pension funds, insurance companies, or other lenders in distributing mortgage obligations to mortgage investors are known as:
conduits advisors go betweens tranches |
a
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mortgage documents containing notes with specific language about the borrowers promis to repay loans establish what is termed:
recourse financing a lein a foreclosure statement nonrecourse financing |
a
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the public equity quadrant of real estate markets includes the following major participants:
pension funds equity REITs insurance companies banks |
b
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money that is invested in shares issued and traded in securities markets of pools of mortgage loans such as mortgage-backed securities is termed:
private equity public equity private debt public debt |
d
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a loan in which a builder is required to obtain a forward commitment to secure construction financing is termed:
open-end loan wrap-around loan covered loan purchase money mortgage |
c
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a clause which requires that all remaning payments are due on the loan be paid in the even of default is termed:
acceleration clause late payment clause payment clause foreclosure clause |
a
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the right given to borrowers to make up overdue payments when in default, but prior to a sale of the property is termed:
equity right of redemption judicial right of preforeclosure payment statutory right of redemption right of satisfaction |
a
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the public equity quadrant of real estate markets includes the following major participants:
pension funds equity REITs insurance companies banks |
b
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money that is invested in shares issued and traded in securities markets of pools of mortgage loans such as mortgage-backed securities is termed:
private equity public equity private debt public debt |
d
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a loan in which a builder is required to obtain a forward commitment to secure construction financing is termed:
open-end loan wrap-around loan covered loan purchase money mortgage |
c
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a clause which requires that all remaning payments are due on the loan be paid in the even of default is termed:
acceleration clause late payment clause payment clause foreclosure clause |
a
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the right given to borrowers to make up overdue payments when in default, but prior to a sale of the property is termed:
equity right of redemption judicial right of preforeclosure payment statutory right of redemption right of satisfaction |
a
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in all states, the borrowers rights in a mortgage contract end with the foreclosure sale
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F in many states a statutory right or redemption period exists
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in lein-theory states mortgages instruments contain power of sale clauses that allow foreclosure without going to court
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f nonjudicial
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real estate investment in england and japan occurs without highly competive private mortgage markets
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t
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money that flows to the lender from two sources enable the lender to participate in the creation of mortgage--these sources are deposits and the sale of mortgage to the secondary mortgage market
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t
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in title theory states, lenders technically recieve title to property in mortgage contracts.
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t
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money invested directly in properties by those who take ownership and operate the properties is termed private debt
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f private equity
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construction loans generally have higher interest rates that permanent loan due to the increased risk
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t
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an arrangement in which the buyer obtains a first mortgage from the seller, and thus an instutional lender never becomes a party to the agreement, is termed a purchase money mortgage
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t
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the construction loan may be extended for a long term as a standard first mortgage loan
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F it is just during the construction period
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the repayment of land development loans oftern occur in a lump sum with the completion of the development or witht he sale of the individual lot.
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t
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3 factors when deciding between a 15 or 30 years loan
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cost..is opp cost greater or less than effective cost
affordability..afford the monthy payment liquidity..sufficent fund availabel |
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major purchaser of residential mortgage loans in the secondary mortgage market is:
veterans administration governmenr national mortgage association department of house and urban development federal national mortgage association |
d
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when a mortgage is used as collateral for the issuance of a mortgage backed security the underlying mortgage is said to be:
packaged securitized obligated wrapped |
b
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a comforming conventional mortgage loan is:
only originated through conventional lenders, not mortgage bankers and brokers one that meets the standard of the federal housing administration one that meets the standard required for purchase int eh secondary market, but is not insured or guaranteed by a government agency is a flexible mortgage, designed to conform to the various needs of the borrowers |
c
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mortgage insurance is typically required on new FHA loans when the loan amount is greater than:
70 of secured property value 75 80 it is required on all loans |
d
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approx 25% of private homes now carry a home-equity mortgage
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t
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borrowers who expect to move relatively soon should choose to pay discount points to avoid high interest payments
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F no or little discount to avoid up-front interest
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the truth-in-lending act is a federal law that requires lenders to provide information on all of the costs associated with closing a residential loan
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F real estate settlement and procedures act RESPA
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if the risk-adjusted cost of self financing is equal to the effective borrowing cost of debt financing, the borrower is indifferent between the two options from a financial perspective
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t
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the most accurate guide to the refinancing decision is achieved through the use of the 2percent rule. refinancing if the market rate is two percent below the borrowers existing contract rate.
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f calculate the NPV of the expected cash flows
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one of the primary determinants of mortgage loan default is the size of the borrowers equity in the property
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tt
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agencies and private companies that pool mortgages and sell mortgage-backed securities are termed conduits
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t
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APR is the same as the effective cost of borrowing
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F APR assums that loan will be held until maturity. effective cost of borrowing considers that borrowers holding period
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jumbo loans carry a lower contract interest rate than standard conventional loans due to the economies of scale inherent in writing larger loans
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f cuz they are not as liquid a regular loan so they carry a higher interest rate
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the margin on an adjustable rate mortgage can be determined by subtracting the initial contract interest rate from the market interest rate
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F index from initial contract interest rate
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3 C's that the mortgage industry uses to evaluate mortgage applications
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credit, capacity, collateral
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savings and loan institutions, savings banks, credit unions, and commercial banks which bring together depositors and mortgage brokers are termed:
fininancial intermeditaries financial conduits fund processors funding mechanisms |
a
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financial institutions which serve a group of people with a common bond such as employess of a corporation, government units, labor unions, or trade associations are:
savings and loan institutions savings banks mortgage banks credit unions |
d
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a institution which funds long-term home mortgage loans and then hold the whole loans as investments may be called:
conduits portfolio lenders mortgage bankers mortgage brokers |
b
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a mortgage pipeline is a term used to describe:
a mortgage bankers line of possible available funds for primary lending source a commitment from a secondary market participant to purchase a line of loans a mortgage bankers approved, but currently unfunded, loan commitments a possible secondary source of mortgage money |
c
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a mortgage broker:
is an employee of a mortgage banking firm serves as an intermediate between the borrower and the lender...customer and client generally recieves a base salary, plus some percentage of the value of the loan originated from the mortgage banker all of the above |
b
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a loan type which guarantees loan losses up to 100 percent of a propertys value is:
a conventional mortgage loan a farmers home administration mortgage loan a federal houseing admin loan a VA mortgage loan |
d
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the primary guarantor of pass-through mortgage backed securities issued by approved issuers...mortgage bankers..is:
fannie mae freddie mac sallie mae ginnie mac |
d
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to obtain a conventional loan, the monthly PITI plus any monthly financial obligations, such as auto and credit card loans, must typically be less than------percent of the borrowers monthly gross income
25 28 31.5 36 percent |
d
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the federal act signed in 1975 which discourages lenders from 'redlining' certain negihborhoods is
Home loan mortgage disclosure act community reinvestment act financial institution reform, recovery,a dn enforcement act truth in lending act |
a
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mortgage bankers are often compensated:
for originating loans through the mortgage origination fees for servicing borrowers through loan processing fees for servicing loans all of the above |
d
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mortgage loans on commercail properties represent the larges portion of mortgage debt outstanding
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F residentiial properties
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commercial banks often indirectly provide additional funds for the housing market by providing short term funds for mortgage banking companies
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t
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mortgage brokers are full service mortgage companies--they process, close and sell the loans they originate int he secondary mortgage market
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F Mortgage bankers
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a standby foreward commitment from the secondary market gives the lender the right, but not the obligation, to sell a prespecified dollar amount of a certin type of loan to the seller of the standby commitment
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t
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the largest purchaser of mortgages in the secondary mortgage market is the governemnt national mortgage association GNMA
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F GNMA purchases few compared to fannie mae and freddie mac
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FHA loans are originated by the Federal Housing Administration on properties that meet FHA's property and credit risk standards
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F FHA loans are originated by private lenders that meet FHA's property and credit risk standards
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the VA charges a fund fee that is a percentage of the loan, with the percentage based on the down payment
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t
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in developing and facilitating the sceondary market in mortgages, fannie mae and freddie mac have served to cause a standardization of the mortgage application and procedures required to obtain a mortgage
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t
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the most important activity of Ginnie Mae is not to purchase and sell mortgages, but to guarantee many of the pass-through mortgage backed securities are issued
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t
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the PITI-to-monthly income ratio on an FHA-loan is not as difficult for borrowers to qualify for when compared to the typical PITI-to-monthly income ration required on a conventional mortgage
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t
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what elements does a typical loan submission packet require?
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loan app, property description, appraisal value, cash flow estimates, legal and environmental info, and feasibility report
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the second largest single source of long-term commercial real estate debt is:
life insurance companies savings and loan institutions mortgage bankers commercial banks |
a
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which of the following has gained importance as a source of commercial real estate debt in the 1990's
pension funds mutual funds savings instutions life insurance companies |
a
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when a note is used in the financing of property and borrowers have personal liability, the arrangement is known as:
recourse financing nonrecourse financing personal financing personal bonding |
a
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most commercial loans do not allow borrowers to freely prepay at par, because they generally contain:
a lock out provision prepayment penalty none of the above all of the above |
d
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the index on a floating rate mortgage is typically the:
rate on the one year treasurey bill rate on ten year treasury bill rate banks charge their best customer, the prime rate average mortgage rate reported by the federal home loan bank board |
c
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a method of selling a property where the seller allows the buyer to pay the purchase price over a number of years thereby deffering taxable income is termed:
yield-maintenance agreement flexible sales agreement scheduled sale agreement installment sale agreement |
d
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the payment of a specified percentage of the property's gross or net income to a lender is termed:
equity kicker income kicker participation package corresponding relationship |
b
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the applicnts personal willingness and ability to service the debt on a commercial mortgage loan is not as crucially important as it is with residential loans
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t
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equity participants are designed to protect the lender from unexpected increases in inflation and interest rates.
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t
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the additional payment the lender receives on a participation mortgage, whether from operating cash flows or sale proceeds are classified as provisional interest
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F contingent interest
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in a sale-leaseback arrangememtn, the lender (investor) is essentially taking an all equity position
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t
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a convertible mortgage gives the borrower the option to convert his equity in the project to debt after a specified number of years
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F mortgage debt into equity
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the risk that the NOI on a property will be less than the debt service required is often referred to as financial risk
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t
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the expected variability of the return to the equity investor decreases with the amount of financial leverage
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f increases
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in contrast to residential mortgage loans, the terms and provisions of commercial mortgages are highly standardized
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f can vary greatly
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commercail property lenders seldom require a third-party appraisal of the property to estimate its market value
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f they typicall do
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the lenders minimum acceptable DCR may be used to calculate the maximum allowable loan on a project
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t
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