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12 Cards in this Set
- Front
- Back
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The Real Estate Settlement Procedures Act provides: a secondary market for mortgage loans that real estate advertisements must include the annual percentage rate that the mortgagor must be given an estimate of closing costs that the mortgagee must be given an estimate of closing costs |
A: that the mortgagor must be given an estimate of closing costs RESPA requires the disclosure within three days of loan application, of the good faith estimate of closing costs. |
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When an out-of-state investor sells a property in Colorado, which of the following is required of the closing entity? withhold up to 2 per cent of the selling price as a state transfer tax withhold up to 2 per cent of the selling price as possible income tax liability withhold up to 2 per cent of the net proceeds of the sale as sales tax withhold up to 2 per cent of the net proceeds of the sale as possible income tax |
A: withhold up to 2 per cent of the selling price as possible income tax liability When the seller is out of state after closing, the Colorado Department of Revenue requires withholding of the lesser of 2 per cent of the selling price or the entire net proceeds due to the seller at closing. |
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A standard title insurance policy offers protection to the grantee the grantor the lender heirs of the grantor |
A: the grantee The correct answer is "Grantee", better know as the "Buyer". The Seller purchases the insurance to protect the beneficiary, the Buyer from lawsuits against the title. The Buyer is known as the "Grantee" because the Seller as the "Grantor" transfers ownership by granting the property using a deed to the "Grantee" who is the Buyer. |
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An out of state investor sells a property in Colorado. The closing entity must withhold up to 2 percent of the Selling price as possible income tax liability. Selling price as a state transfer tax Net proceeds of the sale as sales tax. Net proceeds of the sale as possible income tax. |
A: Selling price as possible income tax liability. The law is that the closing entity must withhold 2% OR the entire net amount whichever is less at closing for possible income tax liability when the person selling has an out of state address. |
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Which deed usually coveys residential property in Colorado? General Warranty Deed Special Warranty Deed Bargain & Sale Deed Quitclaim Deed |
A: General Warranty Deed In general usually the general warranty deed is used. |
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The following statements refer to RESPA regulations except which one? A good faith estimate of finance costs must be given to a buyer. Residential transactions financed by federally related mortgage loans. Discrimination because of race is not allowed An informational book regarding closing costs must be given to a mortgagor. |
A: Discrimination because of race is not allowed Discrimination is not a part of RESPA |
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A requirement of RESPA is that: licensees be tipped for recommending a good title company no seller may require the buyer to purchase title insurance from a particular title company buyers are not required to purchase a mortgagee’s title policy title insurance is always a requirement for all transactions |
A: no seller may require the buyer to purchase title insurance from a particular title company RESPA eliminates kickbacks, and prevents sellers from requiring the use of a specific title company. |
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How is the broker’s fee usually shown on the settlement statement? Debit to the seller, credit to the broker Debit to the seller, credit to the buyer Debit ½ to seller, debit ½ to buyer, credit to the broker Debit to the buyer, credit to the broker |
A: Debit to the seller, credit to the broker |
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In Colorado "good funds" include a A check from the buyer that will clear the bank A title insurance company check A check drawn on the broker's escrow account A teller's check from a savings and loan |
A: A teller's check from a savings and loan From the Contract to Buy and Sell (Purchase Contract) Good Funds. All amounts payable by the parties at Closing, including any loan proceeds, Cash at Closing and closing costs, shall be in funds that comply with all applicable Colorado laws, including electronic transfer funds, certified check, savings and loan teller’s check and cashier’s check (Good Funds).This is also covered in Real Estate Commission Rule E-36:E-36. Good funds at closingPursuant to 38-35-125, a real estate licensee who provides closing services shall not disburse funds or instruct an agent to disburse funds until those funds have been received and are either: (1) available for immediate withdrawal as a matter of right from the financial institution in which the funds have been deposited or (2) available for immediate withdrawal as a consequence of an agreement of a financial institution in which the funds are to be deposited or a financial institution upon which the funds are to be drawn. Such agreement with a financial institution must be for the benefit of the licensee providing the closing service. If the agreement contains contingencies or reservations no disbursements can be made until these are satisfied. |
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In Colorado, one half of the property tax was paid at the end of February by what date must the balance be paid to avoid a penalty? March 31 March 1 June 15 April 30 |
A: June 15 June 15 is the latest that the balance can be paid to avoid a penalty. |
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What is the amount charged to the seller for the current year’s taxes, if the previous year’s taxes were $852 and the closing is July 7? 442.57 438.84 436.5 428.29 |
A: 436.5 $852 / 365 = $2.3342 X 187 = $436.50 |
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The closing statement is prepared to: determine the amount of money the seller will receive at the closing compute the amount of money the purchaser must bring to the closing serve as a receipt for all money that changes hands at the time of closing all of the above |
A: all of the above The closing statement is a detailed accounting of every dollar that changes hands at a closing. |
