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296 Cards in this Set
- Front
- Back
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How many members does TREC have? |
9 6 brokers, 3 public representatives Appointed by the Governor and approved by the senate. |
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Texas Real Estate License Act was enacted in |
1949 |
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TRELA's primary purpose is to |
protect the public |
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A complaint filed with TREC must be |
in writing and signed. It cannot be filed anonymously. |
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The commission is authorized to to subpoena |
documents, records, and witnesses |
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When a licensee or unlicensed person fails to comply with a subpoena, |
the commission may file suit with the AG
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The practice of real estate brokerage activities without a license is a |
Class A misdemenaor |
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The fine for unlicensed brokerage activity is |
$1,000 |
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The maximum fine for for an individual who acts as an agent without a license is |
$4,000 per day of unlicensed activity
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the Recovery Fund exists to |
Reimburse and compensate the public for monetary damages |
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When the The Recovery fund account balance is below $1,000,000, the commission may assess |
no more than $10 per licensee to bring the balance of the account to $1,700,000 |
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The maximum amount that may be paid for all judgments against a licensee relating to a single real estate transaction is |
$50,000 |
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The maximum amount that may be paid for judgments and losses from ALL of a licensee's real estate transactions is |
$100,000 |
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What is TREC authorized to do? |
advise with reference to the law it administers |
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TREC is responsible for |
adopting rules and enforcing real estate laws |
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TREC does NOT have the authority to |
enact the laws that govern real estate licensees |
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The members of the commission are |
appointed by the Governor and approved by the Senate |
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Withing the Commission 6 members are license RE brokers. How many members represent the public? |
3 |
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The Broker-Lawyer Committee consists of |
13 members 6 attorneys, 6 brokers, and on member of the public |
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The Commission is authorized to take investigative action against a licensee |
as deemed necessary by the commission and when reasonable cause exists |
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The Commission is authorized to demand |
the appearance of an unlicensed person for a Commission hearing (subpoena) |
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The power of subpoena is the governmental right to |
demand that a person appear or provide files and information for the Commission hearing |
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When a licensee fails to comply with a subpoena, the Commission may |
enforce the subpoena through the Attorney General |
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What power does the Commission have when an unlicensed person fails to comply with a writ of subpoena |
file suit through the Attorney General to enforce the subpoena |
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What recourse is available to the commission when someone acts as a real estate agent without a license? |
civil penalties |
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When an individual practices real estate agency activities without a license, what recourse is available? |
TREC may impose a $1,000 fine for each day of unlicensed activity |
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After an agent uses funds out of the Recovery Trust fund, he can be subject to: |
suspension of license |
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What is the primary purpose of the Texas Real Estate Commission? |
protecting the public from the illegal activities of licensees and their unlicensed employees. |
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Where can a real estate licensee appeal a complaint that has been filed against him? |
district court |
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If a licensee is investigated by TREC, who else is involved? |
broker and licensee |
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An investor acts as an owner-agent in real estate law transactions for the sale(purchase) of his own property. Commission rules: |
do not limit the number of sales(purchases)in which he may participate |
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An individual who practices real estate brokerage activities on behalf of another person for compensation must be licensed when engaged in activities that involve the: |
purchase, lease, exchange, management, management, option, rental, sale, listing, auction or appraisal of real estate |
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Matching individuals from different areas of the country and assisting with the exchange of their property |
requires a real estate license |
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An unlicensed assistant is prohibited by the Real Estate License Act from: |
canvassing names from the telephone directory to solicit property listings |
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When participating in the sale of real estate by auction, the agent is required to be licensed as |
an auctioneer |
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TRELA allows a real estate broker to be paid a fee for preparation of: |
an appraisal |
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In Texas, what type of license is required to sell real estate by lottery? |
auctioneer |
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An individual is exempt from real estate licensure in TX when |
offering an employer's property for rent |
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On site manager of an apartment is |
NOT required to hold a real estate license |
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A person who sells cemetery lots is |
Not required to have a real estate license |
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A trustee conducting a foreclosure auction is |
NOT requires to have a real estate license |
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A builder who sells his own homes |
does not need a real estate license from the Commission in the normal course of business activities |
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Wen engaged in real estate activities an attorney at law is |
exempt form real estate licensing requirements |
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An attorney at law who engages in real estate activities |
is exempt from the formal requirement to be licensed as a salesperson |
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Before someone can sell real estate limited partnerships the agent must: |
have a securities license |
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Texas Veterans' Land Board Program loans require |
the property that is being purchased be located in TX and the veteran live in TX |
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If the salesperson initiates the termination of sponsorship by a broker, the salesperson must |
notify TREC |
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If the Broker initiates the termination of sponsorship of a salesperson, the broker must |
notify TREC |
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TREC punishment for an unlicensed salesperson activities is $1,000 per day for |
each day the person acts without a license, regardless of the number of activities. |
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TREC and Statutory law REQUIRE written agreement when an agent is |
acting as an intermediary |
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TREC does not REQUIRE written agreement when a licensee is acting as |
an agent |
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The single family residential real estate contract is approved by TREC and no representations are made regarding |
legal validity or adequacy of any provision within the contract |
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When the seller wants to reserve part or all of the mineral estate the agent should have the buyer and the seller sign the |
Addendum for Reservation of Oil, Gas, & Other Minerals form that is promulgated by TREC |
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When the seller owes more than the sales price on the property, the sales contract should have an additional form called |
the Short Sale Addendum |
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When a Broker opens a new office |
an associate can be the manager of the branch office; a broker does not have to be the manager of the branch office |
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Selling a house by lottery is |
illegal for real estate licensees |
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A real estate licensee can get in trouble with TREC for placing a "For Sale" sign on someone's property |
without written permission |
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When a client wants to pay a bonus to you, you |
send or give it to your broker. Remember, all compensation- including a bonus- has to be paid to your broker. |
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The IABS form is provided to the buyer, seller, landlord, and tenant for |
residential or commercial transactions |
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The IABS form is signed by |
the buyer, seller, landlord, and tenant |
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When an HOA wants rules & regulations concerning flags in teh neighborhood |
the rules can limit the display of flags to symbols for the USA, State of TX, or US Armed Forces |
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An unlicensed assistant can show open houses, but |
cannot complete the TREC contract forms and cannot accept earnest money |
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The Statute of Frauds requires you to complete a WRITTEN lease when |
the term is greater than 1 year |
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When the seller wants to keep living in his property after closing, |
the buyer and the seller sign TREC form no. 15-5 |
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When the buyer wants to move into the property before they close and pay for the property, |
the buyer and seller sign TREC form no. 16-5 |
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Broker is responsible for an agent's |
occupational(professional) acts |
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The seller is responsible for disclosing a death on the property that occurs due to faulty wiring: however, when a death occurs due to electrocution that was accidental and caused by the victim |
the death DOES NOT have to be disclosed to the purchaser |
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Seller's disclosure of lead or lead contaminants is signed by |
the buyer, seller, agent, and other agent |
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Seller's disclosure of lead or lead contaminants also applies whether the seller has resided in the property and also when |
the property is being rented to a tenant |
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a bench is a |
fixture |
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Shrubs and bushes are |
included in the real estate transaction |
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An Apartment Manager needs a license; however |
an on-site manager does not |
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Reducing environmental hazards is done by |
abatement |
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Radon is a cancer causing radioactive gas. It is colorless. It is naturally occurring in the environment and is caused by radioactive decay. Radon problems are fixed by |
certified mitigation |
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When a home was built in 1992 and the purchasers are concerned there may be asbestos in the home, they should |
do nothing because it is illegal to use asbestos in the US since 1977 |
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Where there is an abandoned commercial manufacturing plant that may have toxic problems, the area may be referred to as |
a brownfield |
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When a handicap tenant builds a handicap accessible ramp on the landlord's property, the landlord can |
insist the tenant remove the ramp when the lease expires |
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Blockbusting is an |
ILLEGAL practice of getting listings from sellers |
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Puffing is a |
LEGAL practice involving an agent's opinions about a property |
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Exclusive right to sell listing contract means |
the seller pays the agent a commission when the seller, agent, or subagent locate a buyer for the property |
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An Exclusive Agency listing contract mean the seller is |
NOT obligated to pay the agent a commission when the seller locates the buyer for the property |
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An Executory contract is |
an offer is accepted and the contract is created, but the transaction had not closed |
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Abstract of Title is |
ALL recorded documents for the property (lease, lien, easement, deed, deed of trust, mortgage) |
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Chain of title is the chain of ownership to a property so it is a |
list of the grantor and grantee names as identified in the deed |
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Co ownership is a |
tenancy in common |
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HUD-1 is a form for 1-4 family __________ real estate closing statements when there is a lender providing financing for the buyer |
residential |
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Counter offer must be ________. |
written |
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An offer ________ when a counter offer is made by the other party. |
terminates |
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When a broker posts pictures of another broker's property for sale on Cragslist, |
the broker must get permission from the broker and the owner. |
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Confidential information survives closing |
and can never be disclosed in the future |
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Section 1031 exchanges are identified by the federal tax code(IRS) and allow for |
tax benefits when someone sells real estate and takes the profits and buys another piece of real estate. They can sell commercial property and buy residential property or they can sell residential property and buy commercial. |
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The most common form a depreciation for real estate appraisers is |
straight-line |
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When an advertisement is placed for VA residents because the landlord is trying to get Veterans to occupy the property, |
the advertising is OK. Veterans are not a protected class under the Civil Rights Act |
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Land contracts with installment payments is a |
contract for deed |
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Ranges, townships, and sections are part of |
a RECTANGULAR survey legal description (not governments survey) |
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Cost approach is for |
special use property |
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Income approach is for |
income producing property whether it is residential rental, apartments or office buildings. They all produce rental income and appraiser estimates value with the income approach. |
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Without a will |
Intestate |
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Without a will and without heirs |
Escheat |
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Option fee must be paid to the seller within |
3 days of the contract date or there is no option. |
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The process to settle the estate of a deceased person |
probate |
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TREC rules require the IABS information to be made available in |
easy to ready text that is at least 10 pt font |
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An investor acts as an owner-agent in real estate sales transactions for the sale(purchase) of his own property. Commission rules: |
do not limit the number of sales(purchases) in which he may participate |
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An individual who practices real estate brokerage activities on behalf of another person for compensation must be licensed when engaged in activities that involve the: |
purchase, lease, exchange, management, option, rental, sale, listing, auction, or appraisal of real estate. |
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|
Matching individuals from different areas of the country and assisting with the exchange of property |
requires a real estate license |
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An unlicensed assistant is prohibited by the Real Estate License Act from: |
canvassing names from the telephone directory to solicit property listings. |
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When participating in the sale of real estate by auction, the agent is required to be licensed as: |
an auctioneer |
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In Texas, what type of license is required to sell real estate by lottery? |
auctioneer |
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An individual is exempt from real estate licensure in Texas when |
offering an employer's property for rent. |
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An on-site manager for an apartment complex is |
NOT required to have a real estate license |
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|
A person who sells cemetery lots is |
NOT required to have a real estate license |
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|
A trustee conducting a foreclosure auction is |
NOT required to have a real estate license |
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A builder who sells his own homes does |
NOT need a real estate license from the Commission in the course of normal business activities |
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When engaged in real estate activities an attorney-at-law is |
exempt form real estate licensing requiremements |
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An attorney-at-law who engages in real estate activities is |
exempt from the formal requirement to be licensed as a salesperson |
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Before someone can sell real estate limited partnerships, the agent must: |
have a securities license |
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An individual needs a securities license to: |
sell real estate limited partnerships |
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An individual acts as the designated person for a corporation or limited liability company which is licensed as a Texas real estate broker. What is required of that individual? |
have an active Texas real estate broker license |
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In order for a limited liability partnership or LLP to act as an agent and sell real state in Texas, statutory law requires that one of the partners be: |
licensed as a broker |
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In order for a corporation to earn real estate sales commissions, an officer of the corporation is required to be: |
a real estate broker licensee |
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All except which of the following may perform property tax consulting services? Appraiser Broker Inspector Salesperson |
Inspector |
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A broker who is NOT a registered property tax consultant may still legally perform property tax consulting services concerning |
single-family residences |
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Real estate inspectors use a standard, promulgated for for |
an inspection, TREC form no. REI 1-3 |
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To be eligible for a real estate license, an individual must |
satisfy the Commission as to the individual's integrity |
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A licensed inspector is prohibited from acting simultaneously as an inspector and all of the following except: termite inspector undisclosed buyer undisclosed seller listing broker
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termite inspector |
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In the sale of real estate who is NOT licensed to perform an inspection of the property? real estate inspector professional inspector listing broker apprentice inspector |
listing broker |
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In order to apply for a real estate sales license, the applicant needs two classes in: |
real estate principles |
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Which of the following is not a requirement to file an application for sales licensure? payment of the application fee minimum age of 18 broker sponsorship completion of the education requirements |
broker sponsorship |
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The education requirements for filing an application fro broker licensure is: |
270 core hours and 630 core or related hours |
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In accordance with the rules of the Texas Real Estate Commission, when the Commission refuses to issue a license to an applicant, the applicant must be notified within: |
30 days |
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When a license candidate submits an application for approval to test with the examination service, the Commission must provide notice of a decision to approve the testing application within: |
30 days |
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Commission Form no. 1-1 must be displayed |
in the place of business |
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When the computer indicates a passing score on the licensing exam, are you authorized to practice real estate brokerage activities? |
No, you must wait until your broker has received your license |
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When may you list a client's home for sale? |
immediately after receipt of your license |
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A licensee who opens a place of business under an assumed name should notify the: |
Commission |
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A licensee who opens a place of business under an assumed name should file notice with the |
county in which each office is located |
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When a licensee opens a business in a name that is NOT her legal name, statutory law requires that she obtain an assumed name certificate from the: |
county clerk or county courthouse in each county where she operates |
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When the licensee opens a business in a name that is NOT his or her legal name, he or she must file an official Assumed Name certificate in the: |
district clerk record |
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What mandatory education is required prior to the first license renewal period of a salesperson? |
90 hours of SAE credit |
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As a salesperson you are required to take MCE for continuing education: |
after the completion of the required hours of CORE credit |
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When a real estate salesperson's license goes past the expiration date, late renewal of the license requires completion of the: |
late renewal application and required education |
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Why would you want to get a license ?
you can sell houses faster with a license. because it is law in TX. to sell a house for a friend. so you can refer friends to associates |
to sell a house for a friend |
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The minimum period of active license experience required for real estate broker license applicant is: |
4 years |
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What is the education requirement for the renewal of a broker license? |
15 hours of MCE |
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How many classroom hours of core courses will you have after your first license renewal? |
270 |
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What Commission form is displayed in clear view in all real estate offices? |
Consumer Information Form 1-1 |
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What is the subject of From 1-1? |
It states that real estate firms are licensed and regulated by TREC and any complaints or inquiries should be directed to the Commission. |
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What is the broker required to have to open a second office? |
branch office license |
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A broker may open a branch office in a neighboring town and name a licensed real estate salesperson as branch manager after he or she: |
applies for a branch office license and identifies the relationship with the main office. |
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When the association of a salesperson with the sponsoring broker is terminated, the broker MUST: |
immediately return the salesperson's license to the Commission |
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When the association of a salesperson with the sponsoring broker is terminated, the broker MUST: |
immediately return the license to the Commission and immediately notify the salesperson in writing |
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What procedures must be followed when a broker decides to terminate sponsorship of a salesperson? |
Provide written notice of the termination to the salesperson and immediately return the salesperson's license to TREC |
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A salesperson who terminates her association with a broker is required to: |
immediately notify the broker in writing |
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When a broker sponsorship for a licensee is terminated the: |
associate must be notified immediately and the license immediately returned to the Commission |
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After a salesperson notifies the Commission and the existing broker of a change in sponsorship, the salesperson may practice real estate activities when the: |
Change of Sponsorship form is signed and submitted to the Commission |
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When you change broker sponsorship, you may practice real estate activities after:
|
a sponsorship from is signed by the new sponsor and mailed to TREC. |
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When a broker's license is suspended, are the licenses of any sponsored salesperson suspended as well? |
No, the license is placed on inactive status until the salesperson is sponsored by another broker. |
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Upon suspension of the sponsoring broker's license, what happens to any sales licensees who are sponsored by the broker? The licenses of any sales associates: |
must be sponsored by another broker to retain active licensure status |
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After a broker's license is suspended for 1 year, when may a sales agent practice brokerage activities? |
upon notification of the Commission of a change in sponsorship |
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Commission rules require that a licensee notify TREC of any change of address within: |
10 days |
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A trustee auctioning a foreclosure |
does NOT need a real estate license |
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An active sales licensee who is NOT under the constraints of CORE education (SAE) requirements must complete what type of continuing ed for licensing renewal? |
15 hours of MCE |
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When an active broker licensee does NOT complete the required continuing education prior to license renewal, provisions of the Real Estate License Act: |
allow for payment of an additional $200 with the license renewal fees to give the broker an additional 60 days to complete the required education. |
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The Commission form known as 1-1, the Consumer Information Form, must be prominently displayed |
on the internet website of any person regulated by TRELA |
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Renewal of a broker's license is for a period of |
2 years and required 15 hours of MCE |
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How long do licensees, who are NOT sponsored by a broker, have to get sponsored after they pass the exam and apply for licensure on inactive status? |
1 year |
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What happens when you go to get your license, or renew your license, and you owe money on a student loan? |
An application or renewal may be rejected by the Commission if TREC has received information from the TGSLC that the applicant has defaulted on a student loan. |
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Why would someone get a license? to get a sales commission to save money for insider trading for real estate knowledge |
to get a sales commission |
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An application for renewal may be rejected by the Commission when the commission receives information from the Texas Guaranteed Student Loan Council concerning the applicants: |
default on a student loan |
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When is it legal for you to practice real estate activities? |
When your broker receives your license |
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To qualify for licensure as a salesperson, the pre-licensing education requirements is 2 semester hours of : |
law of agency |
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If you default on a TGSLC loan, your license will |
not be renewed |
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To reactivated a broker's license, what is required by the Commission? |
completion of MCE, submission of TREC required form and payment of required fees |
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If you default on a TGSLC loan and your license comes up for renewal, the Commission may: |
terminate your license |
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To renew a salesperson's license, the licensee must complete at least |
90 hours of core credit (SAE)
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To sell manufactured homes you are |
NOT required to be licensed |
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An agent is required to take 2 credit hours of |
Agency Law |
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When can a commission be split with a foreign broker? |
when the broker conducted the transaction from out of state |
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When a salesperson leaves the sponsorship of a broker, the listings |
stay with the broker |
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If an agent changes companies, what will happen to her listings? |
the listings will continue under the current company |
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The action referred to as telephone canvassing |
requires a license if the call is made in TX |
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The educational requirement for obtaining a license to act as a mediator between a homeowner and the Appraisal Review Board is: |
40 classroom hours |
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What is the maximum fee that may be charged by a mediator who represents a homeowner before the Appraisal Review Board? |
$350 |
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When a licensee pays a $250 MCE deferral fee to TREC: |
the broker can pay the salesperson's commissions during the 60 day time period. |
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When a real estate licensee pays the $250 deferral fee for MCE, what is permissible? |
The broker can continue to pay the agent's commissions. |
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The Consumer Information Form should be displayed |
in the lobby |
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If you work in another office that is separate and away from the corporate office, TREC requires the: |
branch office license |
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Plots of land that can be sold without a license |
as long as it is his own property |
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When a salesperson terminated broker sponsorship, what is the first action that should be taken by the licensee? |
Notify the broker in writing. |
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An unlicensed assistant may |
host an open house |
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An unlicensed assistant may hold an open house but cannot |
give details about the property |
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The requirement that you place the clients interests above your own interest is essential to which section of the canons of professional ethics and conduct? |
Fidelity |
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The highest priority of an agent to ask on behalf of the client is: |
Fidelity |
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The highest priority of an agent to ask on behalf of the client is: |
Fidelity |
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When a third-party enters into a contract, the broker owes the party: |
Honest, fair treatment |
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The highest priority of an agent to ask on behalf of the client is: |
Fidelity |
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When a third-party enters into a contract, the broker owes the party: |
Honest, fair treatment |
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In accordance with the canons of professional ethics and conduct, knowledge of market value is an example of: |
Competency |
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The highest priority of an agent to ask on behalf of the client is: |
Fidelity |
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When a third-party enters into a contract, the broker owes the party: |
Honest, fair treatment |
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In accordance with the canons of professional ethics and conduct, knowledge of market value is an example of: |
Competency |
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When an agent advertises property for sale in a magazine, the advertisement must include a description with the: |
Name of the broker |
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The highest priority of an agent to ask on behalf of the client is: |
Fidelity |
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When a third-party enters into a contract, the broker owes the party: |
Honest, fair treatment |
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When acting as a property manager for the first time, the priority of the manager is to initiate a contract with the owner that specifies the |
duties to be performed by the agent. |
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The relationship between property owner and the property manager is considered |
a special agency |
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The relationship between the property owner and the leasing agent is considered |
general agency |
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The relationship between the property owner and property manager who is also a leasing agent is considered a |
general agency relationship |
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The basic goals of the property manager are: |
maintaining the value of the improvements, collecting rent and generating income |
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The PRIMARY responsibilities of a property manager are: |
collecting rent and maintaining the property |
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When a property is not maintained in suitable living condition what may occur where the tenant can break the lease without penalty? |
constructive eviction |
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A commercial property management firm responsible for preparing an income statement will calculate the difference between: |
scheduled gross income and effective gross income as vacancy and lost rent |
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A commercial property management firm responsible for preparing an income statement will categorize management salary as |
an expense |
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A commercial property management firm responsible for preparing an annual operating budget will categorize the cost of advertising as |
an expense |
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An estate at will is the type of leasehold estate that may be: |
terminated at any time by lessor or lessee |
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The type of leasehold estate that may be terminated at any time by lessee or lessor? |
tenancy at will |
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According to statutory law, after expiration of the initial lease term, when the landlord continues to accept rent from the tenant, the lessee is a: |
tenant at will |
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A leasehold estate that is automatically renewed until canceled by either party is a: |
periodic estate
*also know as month-to-month tenant and estate from year-to year |
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A leasehold estate for a definite period of time that is not automatically renewed at lease expiration and requires the lessee to vacate the premises with no notice of termination is? |
estate for years or tenancy for years |
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When the lease provisions require the landlord/lessor to pay property taxes, insurance premiums, and utility expenses, the rent is referred to as? |
gross rent |
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The requirement for the lessor to pay expenses for maintenance and operation of the property are included in the lease contract and referred to as? |
gross lease |
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When the lease requires the lessee to pay property taxes, insurance premiums, and utility expenses, the rent is referred to as |
net rent |
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What type of lease requires the tenant to pay monthly base rent and an additional amount of rent that is based on a percentage of sales? |
a percentage lease |
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What type of lease allows the lessee to build on the property, but a t the end of the lease the improvements belong to the lessor? |
ground lease |
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When the lease has expired and no rent is being paid but the lessee still occupies the property it is? |
tenancy at sufferenace |
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When a commercial tenant has permanently attached an item of personal property to to the leased premises, the item is considered a trade fixture and is considered property of the |
tenant and may be removed from the property until expiration of the lease |
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At termination of the lease, any trade fixtures are property of the |
landlord
* note that prior to the termination of the lease, the tenant may remove any trade fixtures and is required to restore the property to its original condition |
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Combining adjacent or abutting properties and creating a larger, single parcel of land is called: |
an assemblage |
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Combining adjacent properties and creating a larger, single parcel of land, thereby increasing the overall value of the property is called? |
plottage |
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A PUD or planned unit development consists of |
parcels of land owned that are owned separately and commonly owned areas that are for use by all the individual owners |
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The higher the cap rate on a property the |
risk |
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the higher the yield on an investment property the |
higher the risk
* low risk is associated with a low yield |
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A disadvantage of investing in real estate is the |
limited liquidity or illiquidity |
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Slow return on investment is |
another reason a person may not invest in rental property |
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Loan discount points benefit the |
lender or mortgagee |
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Discount points are considered |
prepaid interest |
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When the amount of points increase the lender's yield will ___________ and the borrower's effective interest rate will ________. |
increase & increase |
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The term "effective rate of interest" describes |
APR on a mortgage loan |
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The payment of points as prepaid interest, cause APR to be the |
"highest" interest rate
** higher than the interest rate stated in the promissory note and higher than the usury rate |
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The effect of loan discount points on the lender is |
an increase in yield and an increase in APR |
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The effect of an increase in the amount of loan discount points is to |
increase the yield to the mortgage |
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When the supply of money decreases, there is a corresponding |
increase in price |
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A lender engages in usury for charging an |
interest rate that is higher than the legally allowed interest rate |
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Usury laws were enacted to protect the |
Consumer and mortgagor (borrower) |
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Who monitors usury rates and interest rates? |
Consumer Credit Commissioner |
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When an unethical lender takes advantage of the borrower's lack of knowledge, the business practices are referred to as: |
predatory lending |
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The technical term for liquidation of debt by installment is |
amortzation |
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In a fully amortized loan, at the end of the term, the loan balance is |
zero |
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In a partially-amortized loan, the borrower makes monthly interest payments for a period of years and a final payment which is |
interest and the entire unpaid loan balance |
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In a CPM or constant payment mortgage, the borrower makes |
constant monthly payments to principal and interest until the loan is completely repaid or fully amortized |
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What kind of mortgage includes PITI? |
budget mortgage |
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Escrow payments of PITI are deposited into a special account called: |
Impound account, budget mortgage account, or escrow account |
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Balloon loans are considered what type of loan? |
partially amortized and final payment includes interest and principal |
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Term loans are referred to as |
interest only loans |
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In real estate financing a blanket loan or blanket mortgage the mortgagor collateralizes |
more than one property and executes a single debt instrument to purchase multiple properties |
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A blanket mortgage is best for who? |
A developer of a subdivision |
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A _____________ loan is a loan made with real estate as security an without governmental participation. |
conventional |
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the purpose of mortgage insurance (PMI or MIP) is to |
allow lenders to make loans at high loan to value ratios. |
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A ___________ mortgage is the instrument signed by a borrower to finance the purchase of chattel and real property. |
package |
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Personal property and real property are collateral for what type of loan? |
Package loan |
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The buyer who purchases a fully furnished condo obtains a |
package mortgage |
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Home equity loan interest payments are |
tax deductible |
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An appropriate method for borrowing money when the entire home mortgage loan has been paid off? |
Home Equity loan |
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A reverse annuity mortgage or RAM is suited to collateralize property with a |
low loan-to-value ratio and high equity |
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An objective of an ARM or adjustable rate mortgage is to |
make loan qualification easier and the interest rate lower |
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The cap rate of an ARM is the |
maximum amount that the interest rate may increase over the entire term of the loan. |
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In the event of default, the quickest foreclosure is provided by |
a contract for deed * also known as an installment sale contract, land sale contract, land contract for deed, or conditional sales contract |
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The contract for deed conveys |
equitable title to the vendee until the final payment is made |
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What type of mortgage provides for the mortgage lender to share in the appreciation of value to a property and receive a share of the profit once the property is sols? |
Shared Appreciation mortgage or SAM |
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In mortgage lending who approves or denies a loan based on the property and the applicant? |
Underwriter |
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Who is an intermediary between the borrower and the lender? |
Mortgage loan officer |
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An FHA loan amount is based on property vale and established by the |
CVR (Certified Value Report) |
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Sales price and estimated value in a CVR is important to what kind of loan? |
FHA |
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If the developer of a subdivision refuses to participate in a sale of property to a buyer with FHA insured financing, the broker has |
NOT engaged in an illegal action and has NOT discrimated |
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FHA loans require payment of |
MIP (mortgage insurance premium) |
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Conventional loans require payment of |
PMI (private mortgage insurance) |
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A CRV is important to |
VA loans |
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When a mortgage loan is paid off, the lien is cleared by |
release of lien which is recorded in the Bureau of Conveyances and records of the County Clerk. |
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A mortgagee's policy of title insurance portects |
the mortgagee(lender) and guarantees that the lender holds the highest priority lien against the property |
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The ____________ ______________ states the terms for repayment of the mortgage debt. |
promissory note |
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The deed of trust is a |
guarantee of payment by the borrower and a pledge of the property as collateral for the debt |
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When a lender accepts a deed to the property rather than foreclosing on the property and borrower, the deed |
does not eliminate any junior liens that may be outstanding |
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What contains the provision that allows a borrower who is in default to arrange for make up payments to bring the loan to current status |
forbearance clause |
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Notice of acceleration of the mortgage is posted with the |
Bureau of Conveyances |
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What allows the lender to require loan pay-off when the borrower is in default? |
Acceleration clause |
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Provision in a loan that prohibits loan assumption? |
Alienation clause |
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A due-on-sale clause or alienation clause guarantees that the |
mortgagee will be paid when the owner sells the property |
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Who enforces RESPA? |
HUD |
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The Real Estate Settlement Procedure Act (RESPA) establishes the guidelines for |
closing procedures on first lien loans for 1-4 family residential properties |
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The Truth in Lending Act is enforced by |
the FTC |
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The truth In Lending Act is also known as |
Regulation Z |
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The objective of Regulation Z aka Truth-in-Lending Act is to |
provide the consumer with information which enables the borrower to avoid the uniformed use of credit and cost of borrowing money |
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Regulation Z (Truth in Lending Act) concerns the |
"true" cost of borrowing money |
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RESPA concerns the |
"true" closing costs |
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The only time marital status is a protected class is in the |
Equal Credit Opportunity Act |
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It is _____________ for a lender to deny a loan applicant whose income is mostly form sales commissions. |
legal |
