Fair Housing Act and Mortgage Lending Practices, Exams of Nursing

Download Fair Housing Act and Mortgage Lending Practices and more Exams Nursing in PDF only on Docsity! Post License Course (Barney Fletcher) Questions With Complete Solutions Within the first five years around ___% of agents leave the real estate business - CORRECT ANSWER80-90% For buyers what are the five steps of the pre-qualification process - CORRECT ANSWER1. Urgency 2. Motivation 3. Financial Ability 4. Wants and Needs 5. Agency For sellers what are the five steps to the first appointment - CORRECT ANSWER1. Urgency 2. Motivation 3. Concerns 4. Expectations 5. Hesitations A person who may be willing to engage in a real estate transaction - CORRECT ANSWERProspect A person who is willing to perhaps have a conversation but has no real desire to engage in a real estate transactions - CORRECT ANSWERSuspect In determining whether a person is a suspect or a prospect we must consider - CORRECT ANSWERUrgency and motivation When setting goals, its important they be - CORRECT ANSWERSpecific Measurable Attainable Realistic Timely Most common type of target market is a particular neighborhood of homes - CORRECT ANSWERFarming A ______ analysis can be helpful in analyzing your strengths and weaknesses, which can sometimes help you pick the target market that is best for you - CORRECT ANSWERSWOT The primary objective of any type of real estate prospecting is to - CORRECT ANSWERGenerate an appointment The ratio that is computed by dividing the number of homes sold in a year by the total number of homes in the farms - CORRECT ANSWERTurnover ratio Post License Course (Barney Fletcher) Questions With Complete Solutions A method of prospecting that will involve the telephone, but only as part of a mix of different types of contacts - CORRECT ANSWERCircle prospecting A ______ agent has more control than a _____ agent - CORRECT ANSWERListing/selling This involves only one appointment with the prospective sellers. Licensee makes the presentation, show the recommended price through CMA and try to get sellers to sign the listing contract - CORRECT ANSWER1-step listing presentation What is the best way to establish a personal brand in real estate - CORRECT ANSWERTo develop a good reputation Which of the following choices is the most common way buyers find a house they purchased - CORRECT ANSWERInternet What is the most important part of your "brand" in your real estate career - CORRECT ANSWERYour reputation When a real estate licensee focuses his or her prospecting efforts on a particular neighborhood or type of buyer is the licensee's - CORRECT ANSWERTarget market As a real estate agent your primary product is - CORRECT ANSWERYour contacts When the number of listings by a particular firm is divided by the total number of listings in that neighborhood, the result is the - CORRECT ANSWERMarket share Which of the following is the best way to ask for a referral - CORRECT ANSWERWho do you know who might be looking to buy or sell a house The process of ensuring that the interior and exterior of a home are as attractive as possible is known as - CORRECT ANSWERStaging The types of media used to generate new business is known as the - CORRECT ANSWERPromotional mix When doing the initial tour of a house before making a listing presentation, one goal should be to - CORRECT ANSWERGet the sellers to view the property from the standpoint of a typical buyers rather than a seller A buyer has made an offer on a seller's house. The offer gives the buyer 10 days to have a licensed home inspection of the property and to cancel the offer if the inspection reveals significant necessary repairs unknown to the buyer. This is an example of - CORRECT ANSWERContingency clause Post License Course (Barney Fletcher) Questions With Complete Solutions In simple terms, this means that the licensee must perform the duties of the agent as would a competent real estate professional and without any negligence. - CORRECT ANSWERreasonable care and diligence If you are showing property you are listing and tell a prospective buyer that "...this property is the best for you," the relationship created could be interpreted as: - CORRECT ANSWERimplied agency Under common law, a broker who has a listing is in a position of trust and must put his or her interests above those of all others. This describes what type of obligation? - CORRECT ANSWERfiduciary What is the greatest risk in a case where a buyer's agent submits offers on several homes simultaneously? - CORRECT ANSWER. The buyer could be contractually obligated to buy more than one house and could face damages if defaulting on any of the contracts. The duty of an agent to follow the instructions of the client applies to each of the following instructions, EXCEPT: - CORRECT ANSWER. "Do not reveal to any buyers that my roof leaks." The state law that specifies which types of contracts must be in writing to be enforceable is called the: - CORRECT ANSWERStatute of Frauds. What offers must a listing broker present to a seller? - CORRECT ANSWERAll offers received prior to closing. Which of the following actions by a licensee who is working with a consumer as a non- client could cause the creation of an agency by implication? a. Filling in the blanks on a pre-printed offer to purchase real property. b. Showing homes to a consumer which meet the consumer's specified needs and desires. c. Making arrangements for a home inspection to take place. d. Making a recommendation about whether to make or accept a counteroffer. - CORRECT ANSWERMaking a recommendation about whether to make or accept a counteroffer. A seller contacted 3 brokers and asked each to suggest the listing price for his property. Broker A said $78,000. Broker B said $79,000. Broker C said $91,000. The seller listed with Broker C and the house later sold for $76,000. Broker C is guilty of violating which of his or her agency responsibilities? - CORRECT ANSWERreasonable care Post License Course (Barney Fletcher) Questions With Complete Solutions Broker Bob has a buyer agency agreement with Buyer Bill. The agreement calls for Buyer Bill to pay a 3% commission upon closing of the purchase of a home. Buyer Bill purchases Seller Sally's house. Seller Sally gave an exclusive right to sell listing agreement to Broker Betty and agreed to pay a 6% commission. In a typical transaction of this nature, how much commission will Buyer Bill have to pay to Broker Bob? - CORRECT ANSWERnothing A real estate licensee represents himself to a customer as the agent of a seller without the knowledge of the seller. The customer makes an offer on the property, which the licensee then presents to the seller. The seller accepts the offer and agrees to pay a commission to the licensee. This is an example of: - CORRECT ANSWERagency by ratification What is the purpose or effect of the equal dignities rule? - CORRECT ANSWERTo require that if the underlying contract must be in writing, any related contracts must be in writing. Which of the following clauses in an offer to purchase a property would be most attractive to a buyer who makes several simultaneous offers to purchase a residence when the buyer can only purchase one of them? - CORRECT ANSWER. An unrestricted right to terminate the contract for a limited period of time. REALTORS® may represent the seller/landlord and buyer/tenant in the same transaction only after - CORRECT ANSWERfull disclosure to and with informed consent of both parties. When acting as listing brokers, REALTORS® shall continue to submit to the seller/landlord all offers and counter-offers until - CORRECT ANSWERclosing or execution of a lease unless the seller/landlord has waived this obligation in writing. When entering into listing contracts, REALTORS® must advise sellers/landlords of: - CORRECT ANSWER1) the REALTOR®'s company policies regarding cooperation and the amount(s) of any compensation that will be offered to subagents, buyer/tenant agents, and/or brokers acting in legally recognized non-agency capacities; 2) the fact that buyer/tenant agents or brokers, even if compensated by listing brokers, or by sellers/landlords may represent the interests of buyers/tenants; and 3) any potential for listing brokers to act as disclosed dual agents, e.g., buyer/tenant agents. (Adopted 1/93, Renumbered 1/98, Amended 1/03) REALTOR® A has a listing on a seller's home and the seller has accepted an offer. The offer is contingent upon the sale of the buyer's current home. REALTOR® B has a buyer who has made an offer. Under the Code of Ethics, what should listing REALTOR® A do? a. Ignore REALTOR® B's offer since the seller's home is already under contract. b. Reveal the existence of the contract but not the contingency. Post License Course (Barney Fletcher) Questions With Complete Solutions c. Reveal the existence of the contract and the contingency. d. Present the second offer to the seller without disclosing the existence of the offer or the contingency. Feedback - CORRECT ANSWERc. Reveal the existence of the contract and the contingency. A REALTOR® has a listing on a client's house. The sellers are getting a divorce and need to sell the home quickly. Under what circumstances can the REALTOR® reveal this fact to a potential buyer? - CORRECT ANSWERd. Only after getting informed consent from the seller. Act was designed to ensure that persons of any race could sign and enforce contracts and could buy and sell and lease property. - CORRECT ANSWERCivil Rights act of 1866 The Sherman Antitrust Act prohibits each of the following activities, EXCEPT: Select one: a. Commingling. b. Price fixing. c. Boycotts. d. Tying arrangements - CORRECT ANSWERa. commingling A listing agreement may be terminated by: Select one: a. The seller b. The buyer's broker c. The salesperson that obtained the listing d. Death of the salesperson - CORRECT ANSWERa. the seller Brokers must hold their client's funds in a/an: Select one: a. Office safe. b. Savings account. c. Trust or escrow account. d. Special account managed by the Board of Realtors. - CORRECT ANSWERc. trust or escrow account A broker has the buyer's earnest money deposit deposited in an escrow account. The amount of the deposit exceeds the amount of the broker's commission for the sale. The broker may remove his commission on this sale ONLY: Select one: a. When the buyer moves into the property. b. When the seller moves out of the property. c. When the closing is completed. Post License Course (Barney Fletcher) Questions With Complete Solutions d. Establish complaint procedures. - CORRECT ANSWERa. Add two new protected classes; Recent years have seen increasing complaints centering on fair housing problems having to do with REO properties. What is typically the complaint? Select one: a. Excessive numbers of foreclosures in minority neighborhoods; b. Failure to prevent squatters from taking over the property; c. REOs located in African-American and Latino neighborhoods receive less upkeep and maintenance than those in Caucasian neighborhoods; d. It is too difficult to sell REO properties in minority neighborhoods. - CORRECT ANSWERc. REOs located in African-American and Latino neighborhoods receive less upkeep and maintenance than those in Caucasian neighborhoods; Which of the following phrases in a rental advertisement would be deemed discriminatory against the disabled? Select one: a. Attractive independent living; b. Walking distance to shopping; c. Accessible for the disabled; d. None of the above. Feedback - CORRECT ANSWERa. Attractive independent living; An apartment complex has a "no pets" policy. Mary is a blind person who applies to rent a unit, but she wants to have her certified guide dog live in the apartment with her. This request: Select one: a. Can only be granted if the landlord agrees to remove "no pets" policy; b. Should be considered "reasonable accommodation;" c. Should be considered a "reasonable modification;" d. Cannot be granted. - CORRECT ANSWERb. Should be considered "reasonable accommodation;" In 1968 the Supreme court ruled in the Jones vs. Mayer Co. case. The courts' decision upheld the law which provides protection on the basis of: Select one: a. Sexual discrimination; b. Racial discrimination; c. Discrimination on the basis of national origin d. Religious discrimination - CORRECT ANSWERb. Racial discrimination; Which of the following choices would be an example of a member of the "familial status" protected class under the Fair Housing Amendments Act? Select one: a. Any married couple; Post License Course (Barney Fletcher) Questions With Complete Solutions b. A single mother with a 19-year old child; c. A married couple with two grown children; d. A pregnant woman. - CORRECT ANSWERd. A pregnant woman. In what circumstance is the owner required to pay any costs associated with a reasonable accommodation? Select one: a. In no cases; b. In all cases; c. Only if the owner receives operating subsidies from the government, such as Section 8 vouchers; d. Only if the property was built after 1991. - CORRECT ANSWERb. In all cases; The 1988 Amendment to the Federal Fair Housing Act, Title VIII, declared it unlawful to discriminate: Select one: a. Against households with children under 18 years of age; b. On the basis of age; c. Because of sexual orientation; d. On the basis of the sex of the buyer or renter - CORRECT ANSWERAgainst households with children under 18 years of age; Which of the following documents may include a question about the applicant's race? Select one: a. A mortgage application only; b. A rental application only; c. Both a mortgage application and a rental application; d. Neither a mortgage application nor a rental application. - CORRECT ANSWERa. A mortgage application only; If a prospective buyer (who is of a minority group) asks an agent to show her properties, the agent should: Select one: a. Show her properties in areas that are predominantly of the same minority group; b. Refer her to an agent in the firm of the same minority; c. Advise her that the firm does not handle people of her minority group and refer her to another brokerage d. Show her any property for which she is financially qualified - CORRECT ANSWERd. Show her any property for which she is financially qualified A victim of discriminatory conduct files a lawsuit and wins the case. Part of the judgment in the case is for emotional distress and loss of a housing opportunity. This part of the judgment is called: Select one: a. Consequential damages; Post License Course (Barney Fletcher) Questions With Complete Solutions b. Punitive damages; c. Injunctive relief; d. Declaratory relief. - CORRECT ANSWERa. Consequential damages; When HUD sends a complaint to a respondent, that respondent has how many days to submit an answer to the complaint? Select one: a. 5 days; b. 10 days; c. 15 days; d. 30 days; - CORRECT ANSWERb. 10 days; If a dark-skinned African-American refused to rent an apartment house to a lighter- skinned African-American, that would be considered: Select one: a. Discrimination on the basis of race only; b. Discrimination on the basis of color only; c. Discrimination on the basis of both race and color; d. Not to be a violation of the Fair Housing Act. - CORRECT ANSWERb. Discrimination on the basis of color only; Each of the following would be considered a "person with a disability," EXCEPT: Select one: a. An individual who currently uses illegal drugs; b. A person with a past history of mental impairment; c. A person with a learning disability; d. A person who has difficulty walking. - CORRECT ANSWERa. An individual who currently uses illegal drugs; If a landlord or property manager treats Caucasian tenants better than Latino tenants, that would be an example of: Select one: a. Overt evidence of disparate treatment; b. Comparative evidence of disparate treatment; c. Evidence of disparate impact; d. Both A and B above. Feedback - CORRECT ANSWERb. Comparative evidence of disparate treatment; A fair housing complaint on the basis of excluding those with a record of criminal conviction may be based on allegations of: Select one: a. Disparate impact; b. Disparate treatment; c. Either of the above; d. None of the above. - CORRECT ANSWEREither of the above; Post License Course (Barney Fletcher) Questions With Complete Solutions d. To show that the burden of the criminal conviction policy puts a heavier burden on members of a protected class. - CORRECT ANSWERd. To show that the burden of the criminal conviction policy puts a heavier burden on members of a protected class. In a fair housing investigation, "testers" are most often used to find: Select one: a. Overt evidence of disparate treatment; b. Comparative evidence of disparate treatment; c. Evidence of disparate impact; d. Both A and B above. - CORRECT ANSWERb. Comparative evidence of disparate treatment; When must the owner of an apartment complex grant a reasonable accommodation to a disabled tenant? Select one: a. When the disability is readily apparent and the accommodation is not an undue burden on the owner; b. Whenever the tenant requests one; c. When the tenant requests one and the request does not place an undue burden on the owner; d. At no time, since reasonable accommodations are always voluntary. Feedback - CORRECT ANSWERWhen the tenant requests one and the request does not place an undue burden on the owner; A disparate impact case has gone to trial. The plaintiffs have shown that a particular policy has had a disparate impact on a particular protected class. However, the defendant has shown that the policy serves a legitimate business necessity. What will be the next step? Select one: a. The case will be dismissed. b. The plaintiff will have to show that the policy involved a discriminatory intent on the part of the defendant; c. The plaintiff will have to show that other policies might have served the same business necessity with less disparate impact on protected classes; d. The defendant will have to prove that there was no discriminatory intent when it set the policy. - CORRECT ANSWERThe plaintiff will have to show that other policies might have served the same business necessity with less disparate impact on protected classes; Claims filed with HUD for alleged Fair Housing violations must be filed within: Select one: a. 90 days; b. 180 days; c. 1 year; d. 2 years. - CORRECT ANSWERc. 1 year; Post License Course (Barney Fletcher) Questions With Complete Solutions Which of the following documents may include a question about the applicant's race? Select one: a. A mortgage application only; b. A rental application only; c. Both a mortgage application and a rental application; d. Neither a mortgage application nor a rental application. - CORRECT ANSWERa. A mortgage application only; A property owner creates the following policy: There shall be no "loud and boisterous activity on the premises, music played loud and/or with too much bass, a continuous or excessive number of guests, noisy children, or vehicles with very loud exhaust system." Is this policy likely to be found to be enforceable? Select one: a. No, primarily because of the reference to noisy children; b. Yes, it is reasonable and serves a legitimate business necessity; c. No, primarily because of the reference to loud music; d. No, primarily because of the reference to automobiles. Feedback - CORRECT ANSWERa. No, primarily because of the reference to noisy children; Sally owned a rental home which she has never occupied. Under the federal Fair Housing Act, under what circumstance might she be able to sell this rental property and be exempt from the Fair Housing Act? Select one: a. As long as she uses the services of a real estate licensee; b. As long as she discloses the exemption from the Fair Housing Act in any advertisement; c. Under no circumstances; d. As long as she does not sell more than one such property in any two-year period. - CORRECT ANSWERAs long as she does not sell more than one such property in any two-year period. A victim of discriminatory conduct files a lawsuit and wins the case. Part of the judgment in the case is for emotional distress and loss of a housing opportunity. This part of the judgment is called: Select one: a. Consequential damages; b. Punitive damages; c. Injunctive relief; d. Declaratory relief. Feedback - CORRECT ANSWERa. Consequential damages; In past years, fair housing complaints involving insurance companies typically involved complaints regarding: Post License Course (Barney Fletcher) Questions With Complete Solutions Select one: a. Steering; b. Redlining; c. Blockbusting; d. Discriminatory pricing. - CORRECT ANSWERb. Redlining; A real estate licensee who works only with buyers has told a Latino buyer that the local school district is very good but offers no English as a Second Language program. The same licensee tells Caucasian buyers that the local school district is great. This licensee has: Select one: a. Done nothing wrong; b. Engaged in steering; c. Engaged in redlining; d. Engaged in blockbusting. - CORRECT ANSWERb. Engaged in steering; A couple has rented a one-bedroom apartment. After a new baby arrived, the landlord filed an eviction notice on the couple because the landlord's policy is that the occupancy limit is two people per bedroom. Which of the following statements is the most likely result of a fair housing lawsuit filed by the tenants? Select one: a. The eviction would likely be upheld due to the HUD Keating Memo which suggests occupancy limits of 2 persons per bedroom. b. The eviction would likely be overturned because of the age of the child. c. The eviction would likely be upheld if the occupancy limit was clearly disclosed in the rental agreement or lease. d. The eviction would be overturned as it is unconstitutional. - CORRECT ANSWERb. The eviction would likely be overturned because of the age of the child. Which of the following statements is/are true regarding the addition of sexual orientation and the gender identity as members of a protected class? Select one: a. It is based on a Supreme Court decision and a Presidential Executive Order; b. It is based on the protected class of sex; c. Both of the above; d. None of the above. - CORRECT ANSWERc. Both of the above; The burden of proof falls on the plaintiff in which of the following aspects of a disparate impact case? I. Proving that the policy has a disparate impact; II. Proving that the policy serves a business necessity. III. Proving that an alternative policy could achieve the business necessity without a disparate impact Select one: a. I only; b. I & II; c. I & III; Post License Course (Barney Fletcher) Questions With Complete Solutions b. Racial discrimination; c. Discrimination on the basis of national origin d. Religious discrimination - CORRECT ANSWERb. Racial discrimination; Which of the following phrases in a rental advertisement would be deemed discriminatory against the disabled? Select one: a. Attractive independent living; b. Walking distance to shopping; c. Accessible for the disabled; d. None of the above. - CORRECT ANSWERa. Attractive independent living Adeline is selling her own home as a For Sale By Owner (FSBO). On Sunday, a full price offer is made by an Asian couple. Adeline refuses the offer made by the couple. On Monday, Adeline accepts an offer, $4000 below the asking price from a Caucasian family. Has Adeline violated any laws and if so which one? Select one: a. There is no violation because homeowners selling their own property are exempt from Federal Fair Housing laws; b. Adeline has violated the Federal Fair Housing Act of 1968; c. Adeline has violated the Civil Rights Act of 1866; d. Adeline has violated the state license laws. - CORRECT ANSWERc. Adeline has violated the Civil Rights Act of 1866; The 1988 Amendment to the Federal Fair Housing Act, Title VIII, declared it unlawful to discriminate: Select one: a. Against households with children under 18 years of age; b. On the basis of age; c. Because of sexual orientation; d. On the basis of the sex of the buyer or renter - CORRECT ANSWERa. Against households with children under 18 years of age; According to the State Building Code Occupancy Standards, if a couple had triplets, the minimum square footage of a bedroom for the triplets would be: Select one: a. 70 square feet; b. 120 square feet; c. 150 square feet; d. 210 square feet. - CORRECT ANSWERc. 150 square feet; The Fair Housing Act is part of what larger law? Select one: a. The Civil Rights Act of 1964; b. The Civil Rights Act of 1866; Post License Course (Barney Fletcher) Questions With Complete Solutions c. The Civil Rights Act of 1968; d. The Civil Rights Act of 1974. - CORRECT ANSWERc. The Civil Rights Act of 1968; An apartment complex owner has a rule regarding the use of the pool which states "Children must leave the pool by 6:30 pm and must be supervised by a resident relative at all times when using the pool." Which of the following statements is correct about whether this policy would constitute discrimination on the basis of familial status? Select one: a. Since safety is a valid concern, this policy would be permissible. b. This policy would be a violation, solely because of the requirement that the supervising adult must be a relative; c. This policy would be a violation, solely because of the time restriction; d. This policy would be a violation because of both the time restriction and the requirement that the supervising adult must be a relative. Feedback - CORRECT ANSWERhis policy would be a violation because of both the time restriction and the requirement that the supervising adult must be a relative. The law that states that it is illegal to refuse to sign a contract because the other party is not a Caucasian is: Select one: a. The Civil Rights Act of 1866; b. The Fair Housing Act; c. The Fair Housing Amendments Act of 1988; d. The Gramm-Leach-Bliley Act. - CORRECT ANSWERa. The Civil Rights Act of 1866; Which of the following property owners would be exempt from the prohibition against discrimination in the Civil Rights Act of 1866? Select one: a. The owner of a single-family residence who owns 3 or less such residences and does not use a licensed real estate agent; b. A religious organization that gives housing preferences to its members; c. Both of these choices; d. None of these choices. - CORRECT ANSWERd. None of these choices. What is the recommended practice for a licensee to follow when asked about the local school districts? Select one: a. Act as a resource rather than an advisor; b. Give an honest opinion about each school district; c. Give no information about school districts; d. Recommend the best school district in the area. - CORRECT ANSWERa. Act as a resource rather than an advisor; In today's economy, what is the most common type of discrimination complaint filed against municipalities? Post License Course (Barney Fletcher) Questions With Complete Solutions Select one: a. Restrictive zoning that attempts to exclude African-American people from moving into the city; b. Unreasonable building codes; c. Unreasonable occupancy limits; d. Restrictions against group homes for the disabled in residential neighborhoods. - CORRECT ANSWERRestrictions against group homes for the disabled in residential neighborhoods. Sally owned a rental home which she has never occupied. Under the federal Fair Housing Act, under what circumstance might she be able to sell this rental property and be exempt from the Fair Housing Act? Select one: a. As long as she uses the services of a real estate licensee; b. As long as she discloses the exemption from the Fair Housing Act in any advertisement; c. Under no circumstances; d. As long as she does not sell more than one such property in any two-year period. - CORRECT ANSWERd. As long as she does not sell more than one such property in any two-year period. What determines whether a person is a member of the familial status protected class? Select one: a. Whether a couple is married; b. Whether a person has (or will soon have) custody of a child under the age of 18; c. Whether the household includes at least three people; d. All of the above. - CORRECT ANSWERb. Whether a person has (or will soon have) custody of a child under the age of 18; In what circumstance is the owner required to pay any costs associated with a reasonable accommodation? Select one: a. In no cases; b. In all cases; c. Only if the owner receives operating subsidies from the government, such as Section 8 vouchers; d. Only if the property was built after 1991. - CORRECT ANSWERb. In all cases; Which of the following statements is/are true regarding the addition of sexual orientation and the gender identity as members of a protected class? Select one: a. It is based on a Supreme Court decision and a Presidential Executive Order; b. It is based on the protected class of sex; c. Both of the above; d. None of the above. - CORRECT ANSWERc. Both of the above; Post License Course (Barney Fletcher) Questions With Complete Solutions d. Homeowners buying less house than they can afford - CORRECT ANSWEREquity skimming involves getting a homeowner to sign over his or her current home, not buying a new home. The correct answer is: Homeowners buying less house than they can afford _____ is the process of attempting to make money earned illegally appear to be legitimate. Select one: a. Money laundering; b. Misrepresentation; c. Duress; d. Flipping. - CORRECT ANSWERa. Money laundering; If a lender advertised a loan with an exceptionally low teaser rate without disclosing that the rate only applies for the first month of the loan, the advertisement: Select one: a. Would be legal, but unethical as bait and switch advertising; b. Would be both illegal and unethical as bait and switch advertising; c. Would be legal, but unethical; d. Would be ethical, but not legal. - CORRECT ANSWERThe correct answer is: Would be both illegal and unethical as bait and switch advertising; What is the primary method by which the SAFE Act promotes ethical mortgage lending and origination practices? Select one: a. By requiring a license, which can be suspended or revoked; b. By giving clear ethical guidancel c. By specifying underwriting standards; d. By requiring HUD-approved loan counseling. - CORRECT ANSWERa. By requiring a license, which can be suspended or revoked; Which statement is FALSE regarding duress? Duress: Select one: a. Can take any number of forms; b. May force a person to do something against his or her will; c. Duress is caused by a party who benefits under the contract; d. Covers situations of forcing someone's assent by legal means - CORRECT ANSWERd. Covers situations of forcing someone's assent by legal means Which of the following statements is the most accurate statement regarding the difference between ethical standards and legal standards: Select one: a. Ethical standards guide us on what we should (or should not) do; b. Legal standards guide us on what we should (or should not) do; c. There is no relationship between legal standards and ethical standards; Post License Course (Barney Fletcher) Questions With Complete Solutions d. Legal standards and ethical standards are the same. - CORRECT ANSWERa. Ethical standards guide us on what we should (or should not) do; Each of the following items on a loan application is a possible red flag for mortgage fraud, EXCEPT: Select one: a. The employer's address is a PO Box; b. The accumulation of assets seems excessive in relation to income; c. Same telephone number for the borrower and the employer; d. A family with small children is purchasing a larger house. - CORRECT ANSWERA young family purchasing a larger house would not be a red flag. If the house being purchased seems to small for the number of occupants, that might be a red flag. The correct answer is: A family with small children is purchasing a larger house. Which of the following rules is NOT used by consumers to reduce the chances of identity fraud? Select one: a. Know what is in the credit file; b. Monitor credit file so notification occurs when credit inquiry made; c. Sign all new credit cards upon receipt; d. Shredding is not needed for records of account details. - CORRECT ANSWERThe false statement is that shredding is not needed. The correct answer is: Shredding is not needed for records of account details. Which statement best describes duress? Select one: a. Duress is when a person is asked to do something willingly; b. If duress was caused by party gaining from contract, court will not recognize it; c. Duress covers situations that involve forcing someone's assent by illegal threats; d. Duress includes falsifying a required document. - CORRECT ANSWERc. Duress covers situations that involve forcing someone's assent by illegal threats; If a property has been sold multiple times in the past several years, what type of mortgage fraud might that indicate: Select one: a. Fraud for property; b. Equity skimming; c. Property flipping; d. Cash back on closing. - CORRECT ANSWERc. Property flipping; Mr. Jones owns a house worth $150,000, on which he owes $100,000. He also owes an additional $150,000 to various creditors, including credit card companies and other unsecured lines of credit. He sells the home to his daughter for $110,000 and shortly thereafter files for bankruptcy. The bankruptcy court is likely to view this sale to his daughter as: Post License Course (Barney Fletcher) Questions With Complete Solutions Select one: a. A prudent business move; b. A fraudulent transfer; c. An unethical, but not illegal transaction; d. None of these choices. - CORRECT ANSWERSince the property was sold for less than fair market value shortly before the bankruptcy filing, it will most likely be viewed as a fraudulent transfer. The fact that the sale was to a family member reinforces this likelihood. The correct answer is: A fraudulent transfer; Which of the following statements is NOT true of mortgage fraud-for-property? Select one: a. The applicant might overstate his or her income; b. The applicant often has no intention of ever repaying the loan; c. The transaction might involve a "silent second;" d. The applicant often makes significant misrepresentations on the application. - CORRECT ANSWERIn a fraud-for-property scheme, the applicant usually fully intends to repay the loan. The applicant is lying in order to get a loan for which the applicant would not otherwise qualify. They typically intend to live in the property and intend to make the required payments. The correct answer is: The transaction might involve a "silent second;" The "ability to repay" test of the Dodd-Frank Act was designed to address: Select one: a. The foreclosure crisis; b. Abuses in the subprime mortgage market; c. High interest rates; d. Excess competition. - CORRECT ANSWERb. Abuses in the subprime mortgage market; Charlie is paid $10,000 to pretend to be the purchaser of a home. He fills out the loan application and attends the closing, but the property is actually owned by someone else. Charlie has acted as a: Select one: a. Straw buyer; b. Property flipper; c. Holder of a throw-away second; d. Intermediary buyer. - CORRECT ANSWERa. Straw buyer; The practice of purchasing a home not from any rational economic analysis but from purely speculative expectations regarding future appreciation relates to which of the following theories: Select one: a. Greater Fool Theory; b. Hot Potato Theory; Post License Course (Barney Fletcher) Questions With Complete Solutions a. Not interfere; this is not her concern; b. Inform only the licensees about the scheme; c. Call the lender immediately; d. Francis should offer to assume the negotiations with the seller. - CORRECT ANSWERc. Call the lender immediately; A scammer might artificially inflate the value of a home in order to: Select one: a. Obtain a larger loan; b. Get cash back at closing c. Obtain a larger loan and/or to get cash back at closing d. Justify a higher fee for an appraiser - CORRECT ANSWERc. Obtain a larger loan and/or to get cash back at closing When mortgage fraud occurs, if the borrower has no intention of ever repaying the mortgage, this would most likely involve: Select one: a. Fraud for profit; b. Fraud for property; c. Fraud for hire; d. Either fraud for profit or fraud for property. - CORRECT ANSWERa. Fraud for profit; Predatory lenders tend to target: Select one: a. Elderly borrowers; b. Non-English speaking borrowers; c. Less educated borrowers; d. Each of these groups. - CORRECT ANSWERd. Each of these groups. Which type of predatory lending practice often results in fraudulent property transfers: Select one: a. Steering; b. Loan modifications; c. Targeting; d. Prepayment Penalties. - CORRECT ANSWERMany loan modifiers will convince defaulting borrowers to sign documents which transfer title to the loan modifier. The correct answer is: Loan modifications; "The intentional use of deception to cause another person to suffer loss" is most accurately the definition of the term: Select one: a. Fraud; b. Misrepresentation; c. Negligence; d. Incompetence. - CORRECT ANSWERa. Fraud; Post License Course (Barney Fletcher) Questions With Complete Solutions Appraisal fraud is MOST likely to occur in: Select one: a. Property flipping; b. Cash back at closing; c. Credit repair scams; d. Pay up front scams. - CORRECT ANSWERa. Property flipping; Sam is a licensed MLO in Georgia and has never been disciplined for any violations of federal or state law. Sam's friend George is applying for a mortgage to finance the purchase of his first house. Sam knows that George has deliberately overstated his income. Sam takes no action and the lender discovers the overstatement. Has Sam violated the Georgia Residential Mortgage Fraud Act? Select one: a. No. b. No, because it was the borrower who overstated the inome; c. Yes, because Sam knew of the overstatement; d. Only if it can be proved that Sam knew of the overstatement - CORRECT ANSWERSam has participated in mortgage fraud, which is a violation of the law. However, the Georgia Residential Mortgage Fraud Act only applies to a pattern of mortgage fraud and this is apparently his first violation, and therefore the Georgia Residential Mortgage Fraud Act does not apply. The correct answer is: No. A mortgage loan applicant claims to work for a major corporation such as General Electric. He submits paycheck stubs for purposes of documenting his income. These paycheck stubs are handwritten, not printed. Which of the following statements is most correct: Select one: a. This is a possible indication of asset misrepresentation; b. This is a strong indication of income misrepresentation; c. This is a strong indication of occupancy misrepresentation; d. Federal laws forbid the lender or MLO from drawing any conclusion from this fact. Feedback - CORRECT ANSWERThe likelihood of a major corporation hand-writing its paycheck stubs is almost nonexistent, so this would be a strong indication of misrepresentation. It would be income misrepresentation. The correct answer is: This is a strong indication of income misrepresentation; A buyer is having trouble coming up with a down payment. The buyer borrows $40,000 from a relative one year before buying a house and uses that money for the down payment. The relative agrees to do this without any written contract. This is an example of a: Select one: a. Throw-away second; b. Silent second; Post License Course (Barney Fletcher) Questions With Complete Solutions c. Distributed second; d. Mortgage flip. Feedback - CORRECT ANSWERb. Silent second; Which of the following statements is NOT true of mortgage fraud-for-property? Select one: a. The applicant might overstate his or her income; b. The applicant often has no intention of ever repaying the loan; c. The transaction might involve a "silent second;" d. The applicant often makes significant misrepresentations on the application. - CORRECT ANSWERc. The transaction might involve a "silent second;" Which of the following statements about subprime loans is FALSE: Select one: a. Not all subprime loans are predatory, but most predatory loans are subprime; b. Subprime loans can serve a legitimate purpose; c. Subprime loans generally have a higher risk of foreclosure than other loans; d. If a subprime loan is deemed predatory as to one borrower, it would be deemed predatory as to all borrowers. - CORRECT ANSWERd. If a subprime loan is deemed predatory as to one borrower, it would be deemed predatory as to all borrowers. Sandy purchases property from Ben. Sandy later discovers that Ben did not hold the title to the property and had no right to sell the property. Ben was guilty of ______ and is liable for damages suffered by Sandy in the purchase of the property Select one: a. Title fraud; b. Mortgage fraud; c. Title withholding; d. Misrepresentation. - CORRECT ANSWERa. Title fraud; Which of the following statements is the LEAST important determinant of whether a loan is suitable to a particular mortgage loan applicant: Select one: a. The borrower's likely future income; b. The borrower's financial reserves; c. The borrower's financial sophistication; d. The compensation to the mortgage loan originator. - CORRECT ANSWERd. The compensation to the mortgage loan originator. The "throw away second:" Select one: a. Is typically recorded, but sellers are asked to sign a release at closing table; b. Has payments that are always made and are expected to be paid; c. Has three different contracts of sale; Post License Course (Barney Fletcher) Questions With Complete Solutions Which of the following types of retail centers would draw its customers from the population within 5-15 miles of the store? Select one: a. Strip center; b. Neighborhood center; c. Community center; d. Regional mall. - CORRECT ANSWERd. Regional mall. Which of the following statements about the liquidity of an investment in small rental properties is most accurate? Select one: a. Small rental properties are highly liquid; b. Small rental properties are relatively more liquid than most other types of real estate; c. Small rental properties are not liquid at all; d. Small rental properties are relatively less liquid than most other types of real estate. - CORRECT ANSWERb. Small rental properties are relatively more liquid than most other types of real estate; Which of the following choices is the most accurate definition of the term "replacement costs?" Select one: a. Replacement costs are based on the labor costs, material costs, administrative costs and profit allowance required to construct a building. b. Replacement costs are the costs of building an exact duplicate of an existing structure. c. Replacement costs are the costs of building a building that would serve the same purpose as the existing structure. d. Replacement costs are computed by totaling the installed costs of each component part of the exiting structure. - CORRECT ANSWERc. Replacement costs are the costs of building a building that would serve the same purpose as the existing structure. Which of the following items NOT would be tax deductible on a small rental property? Select one: a. Property taxes; b. Depreciation; c. Special Assessments related to the installation of a sidewalk in the neighborhood; d. Operating costs - CORRECT ANSWERc. Special Assessments related to the installation of a sidewalk in the neighborhood; Which type of buyer of a single family residence would be LEAST likely to "fall in love" with a property? Select one: a. A first-time buyer; b. A person who is buying a house as a rental property; Post License Course (Barney Fletcher) Questions With Complete Solutions c. A person who is moving to the area due to a job transfer; d. A person who is buying a vacation home. - CORRECT ANSWERb. A person who is buying a house as a rental property; Most individuals who purchase a rental house have what expectations about their investment? Select one: a. Tax benefits during the holding period and appreciation in the future; b. High levels of positive cash flow; c. Tenants who will buy the house after a stated period of years; d. All of the above. - CORRECT ANSWERa. Tax benefits during the holding period and appreciation in the future; The largest of the industrial buildings, often with ceilings of 50 feet or more are: Select one: a. Warehouses; b. Distribution centers; c. Light manufacturing d. Flex buildings. - CORRECT ANSWERb. Distribution centers; The economic rent of a property or a unit is also known as the: Select one: a. Market rent. b. Contract rent. c. Actual rent. d. Statutory rent. - CORRECT ANSWERa. Market rent. The article cited in the text about hotel investment makes each of the following points, EXCEPT: Select one: a. First time hotel investors would be best advised to build a new hotel rather than purchasing an existing one; b. Investors carefully investigate the town in which to place a hotel before considering specific sites; c. Hotels should not be considered a passive investment; d. Marketing efforts are crucial for any hotel - CORRECT ANSWERa. First time hotel investors would be best advised to build a new hotel rather than purchasing an existing one; What is the impact of the "strict liability" standard for cleanup of environmental contamination? Select one: a. It means that the current and all past owners of a property must share in the clean-up costs of any contamination. Post License Course (Barney Fletcher) Questions With Complete Solutions b. It means that only the owner which caused the contamination is liable for the clean- up costs of any contamination. c. It means that the current owner is responsible for the clean-up costs of any contamination regardless of which owner caused the contamination. d. It means that no owner is responsible for the clean-up costs of any contamination unless it can be determined who was responsible for the contamination. - CORRECT ANSWERc. It means that the current owner is responsible for the clean-up costs of any contamination regardless of which owner caused the contamination. The most common type of industrial property in the United States is: Select one: a. Distribution centers; b. Warehouses; c. Light industrial; d. Flex buildings. Feedback The most common type of industrial property in the United States is light industrial. The correct answer is: Light industrial; - CORRECT ANSWERc. Light industrial; A subject property has 1,500 square feet of living space. A nearby comparable sale has 1,650 square feet of living space. The appropriate adjustment would be $5,000. This adjustment would be: Select one: a. Added to the sale price of the subject property. b. Subtracted from the sale price of the subject property. c. Added to the sale price of the comparable sale. d. Subtracted from the sale price of the comparable sale. - CORRECT ANSWERd. Subtracted from the sale price of the comparable sale. After an appraiser has made the appropriate adjustments when using the sales comparison approach, the appraiser will: Select one: a. Reconcile the indicated values. b. Average the indicated values. c. Stabilize the indicated values. d. Find the mean of the indicated values. - CORRECT ANSWERa. Reconcile the indicated values. Which of the following types of retail centers would draw its customers from the population within 3 miles of the store? Select one: a. Strip center; b. Neighborhood center; c. Community center; d. Regional mall. - CORRECT ANSWERb. Neighborhood center; Post License Course (Barney Fletcher) Questions With Complete Solutions c. Contribution. d. Time value of money - CORRECT ANSWERd. time value of money Why do lenders require higher financial reserves for loans for a rental house? Select one: a. To discourage loan applications for rental properties; b. Due to the requirements of federal law; c. As a matter of tradition; d. Because of the risk of a vacancy causing an extended period of time with no rental income. - CORRECT ANSWERIf the tenant leaves and it takes several months to get a new tenant, the owner could go a long period of time with no rental income, so financial reserves become very important. The correct answer is: Because of the risk of a vacancy causing an extended period of time with no rental income. A call center which never gets in-person visits from consumers or customers would be most likely to rent space in which of the following types of office buildings? Select one: a. Class A; b. Class B; c. Class C; d. Class D Feedback Since there is no need to impress clients or customers at this location, it would be most likely to rent space in a Class C building, which is the lowest of the ratings. There is no Class D space. The correct answer is: Class C; - CORRECT ANSWERSince there is no need to impress clients or customers at this location, it would be most likely to rent space in a Class C building, which is the lowest of the ratings. There is no Class D space. The correct answer is: Class C; In what circumstance will some of the interest paid on a mortgage securing a rental house NOT be tax deductible: Select one: a. In all cases; b. If the owner is in the highest tax bracket; c. In no cases; d. If there has been a "cash-out" refinancing. - CORRECT ANSWERInterest on a mortgage on a rental property is normally tax deductible except to the extent there has been a "cash-out" refinancing. The correct answer is: If there has been a "cash-out" refinancing. In the market for single family residences, an "institutional investor" is one who: Select one: a. Invests at least $1 million per year for 5 years; Post License Course (Barney Fletcher) Questions With Complete Solutions b. Purchases at least 5 homes in a year c. Purchases at least 10 homes in a year d. Invests at least $3 million per year for 5 years. - CORRECT ANSWERc. Purchases at least 10 homes in a year A retail center that typically has between 30,000 and 125,000 square feet of retail space and is anchored by a supermarket is known as a: Select one: a. Strip center; b. Neighborhood center; c. Community center; d. Regional mall. - CORRECT ANSWERb. Neighborhood center; A single family residence rents for $1,500 and recently sold for $187,500. What is its monthly gross rent multiplier? Select one: a. 125. b. 135. c. 150. d. 155. - CORRECT ANSWERa. 125. A Phase I Environmental Site Assessment would include each of the following, EXCEPT: Select one: a. An onsite inspection of the property. b. Interviews of knowledgeable persons such as previous owners and managers who would know the past history of the property. c. A check of local government records to review past land uses and building permits. d. Taking soil samples and obtaining lab tests. - CORRECT ANSWERd. Taking soil samples and obtaining lab tests. If you purchase a unit in a cooperative complex, what do you own? Select one: a. Your individual unit only; b. Only an undivided interest in the entire complex; c. Shares of stock in a corporation that owns the entire complex; d. Your individual unit and an undivided interest in the common areas. Feedback - CORRECT ANSWERc. Shares of stock in a corporation that owns the entire complex; The type of specialized-purpose center that typically have upscale national-chain specialty stores with dining and entertaining in an outdoor setting is known as a: Select one: a. Lifestyle center; b. Power center; Post License Course (Barney Fletcher) Questions With Complete Solutions c. Factory outlet; d. Theme/Festival; - CORRECT ANSWERa. Lifestyle center; Which of the following statements is the most accurate answer to the question of how capitalization rates are set? Select one: a. The buyer. b. The market. c. The seller. d. The real estate broker. - CORRECT ANSWERb. The market. The article cited in the text about hotel investment cautions new hotel investors about opening a full-service hotel. What are the author's reasons for doing so? Select one: a. The author says that full-service hotels are rarely profitable; b. The author says that restaurants vastly increase the number of inspections required; c. The author says that the cost and complications of a liquor license are excessive; d. The author says the restaurant and/or the bar are like running separate businesses and require their own expertise. - CORRECT ANSWERd. The author says the restaurant and/or the bar are like running separate businesses and require their own expertise. A retail center that usually has between 125,000 and 400,000 square feet of retail space and is often anchored by a discount store or supermarket is known as a: Select one: a. Strip center; b. Neighborhood center; c. Community center; d. Regional mal. Feedback - CORRECT ANSWERc. Community center; Which of the following statements is correct regarding the Section 8 housing program? Select one: a. It is designed for low income people; b. Recipients pay anywhere from 0% to 30% of their income for rent c. HUD administers the program and makes rental payments directly to the landlord; d. All of these choices. - CORRECT ANSWERd. All of these choices. What is the biggest difference between an independent living center and an assisted living center? Select one: a. The level of care; b. The size of the units; c. The distance between units; d. All of the above. - CORRECT ANSWERa. The level of care; Post License Course (Barney Fletcher) Questions With Complete Solutions The recapture of depreciation is taxed at what rate? Select one: a. 25%; b. The taxpayer's ordinary income rate; c. The taxpayer's short term capital gains rate; d. 10%. - CORRECT ANSWERa. 25%; An investor purchased a rental home for $375,000. The lot was valued at $100,000. What would be this investor's depreciation deduction for a full year? Select one: a. $13,636; b. $9,625; c. $10,000; d. $7,051. - CORRECT ANSWERc. $10,000; (recovery period of 27.5 yrs) A paired sales analysis is used: Select one: a. Primarily to value industrial properties. b. To determine construction costs. c. In a discounted cash flow analysis. d. To determine the adjustment necessary for a particular characteristic of a property in the direct sales comparison approach. - CORRECT ANSWER. To determine the adjustment necessary for a particular characteristic of a property in the direct sales comparison approach. Which of the following is deducted from effective gross income to arrive at the net operating income? Select one: a. Management costs only. b. Depreciation only. c. Both management costs and depreciation. d. Neither management costs nor depreciation. - CORRECT ANSWERa. Management costs only. The article cited in the text about hotel investment suggests that it is a bad idea to build a new hotel on the lowest end of the cost spectrum â€" such as rates below $100. What is the primary rationale for this? Select one: a. The gross income cannot be sufficient to support the costs; b. These hotels are most sensitive to economic downturns; c. Existing competing hotels will always be able to undercut your room rates; d. None of these choices. - CORRECT ANSWERc. Existing competing hotels will always be able to undercut your room rates; Post License Course (Barney Fletcher) Questions With Complete Solutions The income approach to appraisal is based primarily on the principle of: Select one: a. Anticipation. b. Substitution. c. Progression. d. Contribution. Feedback The income approach is based primarily on the principle of anticipation which states that the value of a property can be determined as a function of the anticipated income the property is likely to generate. The correct answer is: Anticipation. - CORRECT ANSWERAnticipation A proprietary lease would be associated with: Select one: a. Condominiums; b. Cooperatives; c. Both of the above; d. None of the above. - CORRECT ANSWERb. Cooperatives; In order to be considered a high-rise according to Fannie Mae's classifications, an apartment building must have: Select one: a. 5 or more floors; b. 7 or more floors; c. 9 or more floors; d. 10 or more floors - CORRECT ANSWERc. 9 or more floors; When "baseball arbitration" is used in negotiating the rent for a lease extension, which of the following choices best describes the process? Select one: a. It is a form of mediation involving several rounds of negotiations. b. It involves hiring an appraiser to determine the fair market rent. c. It requires a panel of three different owners of similar properties setting an appropriate rent level. d. Each party submits a recommended solution and the arbitrator chooses which one is more reasonable. - CORRECT ANSWERIn "baseball arbitration" each party submits a recommended solution and the arbitrator chooses which one is more reasonable. The correct answer is: Each party submits a recommended solution and the arbitrator chooses which one is more reasonable. The type of escalation clause that would require periodic appraisals of the property is: Select one: a. Step up rent increases. b. Indexed rent increases. c. Market rent increases. Post License Course (Barney Fletcher) Questions With Complete Solutions d. None of the above. - CORRECT ANSWERMarket rent increases are tied to the value of the property and therefore require periodic appraisals of the property. The correct answer is: Market rent increases. Which of the following statements is true regarding recourse loans? Select one: a. In general, commercial mortgage loans are more likely to be recourse loans than are residential mortgage loans. b. A lender can foreclose against the property only if the loan is a recourse loan. c. Recourse loans are permitted for mortgages used to purchase a personal residence in all 50 states. d. None of the above. - CORRECT ANSWERCommercial loans are far more likely to be recourse loans (where the lender can get a deficiency judgment against the borrower if the foreclosure sale does not generate enough money to fully repay the loan). Many states prohibit deficiency judgments against loans to finance the purchase of a residential mortgage. The correct answer is: In general, commercial mortgage loans are more likely to be recourse loans than are residential mortgage loans. Which of the following statements is most accurate regarding the remedy for a landlord whose tenant commits a non-material breach of the lease contract? Select one: a. The landlord could evict the tenant. b. The lease contract should specify the remedy for a non-material breach. c. There are no remedies for a non-material breach. d. The amount of rent charged would become subject to renegotiation. Feedback - CORRECT ANSWERThe correct answer is: The lease contract should specify the remedy for a non-material breach. If there is a year-end reconciliation clause in a percentage lease, when might the tenant be entitled to a rent refund of some amount? Select one: a. If the sales exceeded the breakpoint every month of the year. b. If the annual sales exceeded 12 times the monthly breakpoint. c. If sales exceeded the monthly breakpoint several times but total annual sales did not exceed the monthly breakpoint times 12. d. In each of these cases. - CORRECT ANSWERIf sales exceeded the monthly breakpoint several times but total annual sales did not exceed the monthly breakpoint times 12. Mezzanine financing is best defined as: Select one: a. The use of a second mortgage as part of the initial financing. b. The type of financing used for particular types of industrial buildings. c. An intermediate financing between the property owner and the mortgage lender. Post License Course (Barney Fletcher) Questions With Complete Solutions d. The ratio is used more often for commercial loans than for residential loans. - CORRECT ANSWERThe correct answer is: The ratio is not affected by the interest rate or amortization period of the loan. The statement "the ratio is not affected by the interest rate or amortization period of the loan" is true of the Debt Yield Ratio but is not true of the Debt Service Coverage Ratio. Lower interest rates or longer amortization periods will reduce the annual debt service which would reduce the DSCR but will not affect the Debt Yield Ratio. A retail space includes 12,000 square feet of usable square feet and 15,000 square feet of rentable square feet. What is the load factor? Select one: a. 30%. b. 25%. c. 15%. d. 10%. Feedback - CORRECT ANSWERStart with the rentable square footage of 15,000; divide that by the 12,000 square feet of usable square feet for a result of 1.25; subtract 1 for a result of 0.25, then multiply that by 100 for a result of 25%. The correct answer is: 25%. Question 19 Incorrect 0.00 points out of 1.00 Flag question Question text When a small business takes out a Section 504 loan, the business must up a down payment of at least: Select one: a. 25%. b. 20%. c. 15%. d. 10%. Feedback The minimum down payment for a Section 504 loan is 10%. The correct answer is: 10%. - CORRECT ANSWERThe minimum down payment for a Section 504 loan is 10%. The correct answer is: 10%. The monetary policy of the United States government is determined by: Select one: a. The President and the Congress. b. The Federal Reserve Board. c. The Department of the Treasury. d. All of the above. - CORRECT ANSWERb. The Federal Reserve Board. Post License Course (Barney Fletcher) Questions With Complete Solutions Which of the following actions would reduce (or decrease the growth of) the money supply? Select one: a. Buying government securities and lowering the discount rate. b. Buying government securities and raising the discount rate. c. Selling government securities and lowering the discount rate. d. Selling government securities and raising the discount rate. - CORRECT ANSWERd. Selling government securities and raising the discount rate. Why is a cash flow note also called a "soft second?" Select one: a. Because it is done without an intercreditor agreement. b. Because the loan payments are not required when the cash flow falls below a specified level. c. Because the loan is secured by the cash flow from the property, not by the property itself, and also because the loan is not recorded and is not a lien against the property. d. Because there is a subordination agreement in place. - CORRECT ANSWERBecause the loan is secured by the cash flow from the property, not by the property itself, and also because the loan is not recorded and is not a lien against the property. The ratio that shows what percentage return the lender would earn if it had to foreclose against the property before the first payment was made is the: Select one: a. Operating ratio. b. Debt Service Coverage Ratio. c. Loan-to-value ratio. d. Debt Yield Ratio. - CORRECT ANSWERd. Debt Yield Ratio. If the money supply grows too slowly, the most likely risk could be: Select one: a. Inflation. b. High interest rates. c. Disintermediation. d. None of the above. - CORRECT ANSWERb. High interest rates. What is the benefit to a tenant of the non-disturbance clause in a lease? Select one: a. It gives the tenant some assurance that the tenant will not lose the lease if the property is foreclosed upon. b. It prevents the landlord from excessive on-site inspections. c. It prevents the property from going through a foreclosure. d. None of these choices. - CORRECT ANSWERa. It gives the tenant some assurance that the tenant will not lose the lease if the property is foreclosed upon. Post License Course (Barney Fletcher) Questions With Complete Solutions A provision in a commercial loan that prohibits early repayment of the loan for some period of time is known as a(n): Select one: a. Interest guarantee. b. Lockout. c. Defeasance. d. Step-down. - CORRECT ANSWERb. Lockout. If the money supply grows too quickly, the most likely risk could be: Select one: a. Inflation. b. Recession. c. High interest rates. d. Excessive unemployment. - CORRECT ANSWERa. Inflation. Under Regulation Z, which of the following types of loan originator compensation would be considered to be based on the terms or conditions of the loan: Select one: a. A higher compensation if the applicant accepts a prepayment penalty clause. b. A higher compensation if the applicant has a credit score above 720. c. A higher compensation if the applicant accepts a prepayment penalty clause and/or has a credit score above 720. d. All of these choices would be considered to be compensation based on the terms or conditions of the loan. - CORRECT ANSWERd. All of these choices would be considered to be compensation based on the terms or conditions of the loan. The finance charge, as computed under the Truth in Lending Act, would include each of the following, EXCEPT: Select one: a. Mortgage insurance premiums. b. Discount points. c. Appraisal fees. d. Loan origination fees. - CORRECT ANSWERc. Appraisal fees. The new Loan Estimate Form combines what previous forms? Select one: a. The GFE and initial TIL. b. The GFE and HUD-1. c. The TIL and HUD-1. d. The GFE and Special Information Booklet. - CORRECT ANSWERa. The GFE and initial TIL. Under Regulation Z, if a loan is subject to the Loan Estimate disclosure requirement, the earliest the loan could possibly close is: Post License Course (Barney Fletcher) Questions With Complete Solutions b. A refinance of an existing first mortgage from the same lender; c. A home equity line of credit; d. A commercial loan. - CORRECT ANSWERc. A home equity line of credit; If a mortgage broker charges higher fees to so that they can pay a referral fee to a real estate licensee, the borrower could sue the mortgage broker and obtain a judgement for: Select one: a. Three times the amount of the extra fee. b. Three times the amount of the total fee. c. Twice the amount of the extra fee. d. Twice the amount of the total fee. - CORRECT ANSWERIf a mortgage broker charges higher fees to so that they can pay a referral fee to a real estate licensee, the borrower could sue the mortgage broker and obtain a judgement for up to three times the amount of the total fee, not just the overcharge. The correct answer is: Three times the amount of the total fee. Under the Truth in Lending Act, which of the following phrases in an advertisement would be considered a "trigger term" that would require additional disclosures in the ad? Select one: a. "Only a 5% down payment is required;" b. "FHA loans available;" c. "No down payment required;" d. "No closing costs." Feedback A specific down payment such as 5% would be a trigger term under TILA However, the statement "no down payment" is not a trigger term. The correct answer is: "Only a 5% down payment is required;" - CORRECT ANSWER"Only a 5% down payment is required;" When making the disclosures required under the safe harbor provision of the Regulation Z prohibition against steering, the loan originator would be required to consider loan options from all creditors with which the originator regularly does business: Select one: a. In all cases. b. If the loan originator regularly does business with less than three creditors. c. If the loan originator regularly does business with less than five creditors. d. In no cases. - CORRECT ANSWERb. If the loan originator regularly does business with less than three creditors. One of the criteria for a loan being subject to the Truth in Lending Act is that the credit is subject to a finance charge or is payable by a written agreement in more than _____ installments. Select one: a. 4. Post License Course (Barney Fletcher) Questions With Complete Solutions b. 6. c. 12. d. 24. - CORRECT ANSWER4` Which of the following would be considered a "Settlement Service Provider?" Select one: a. A mortgage loan originator who takes an application for a mortgage loan. b. A licensed real estate agent who is representing the seller. c. The individual who performed the title search. d. All of these choices. - CORRECT ANSWERAll of these choices. Which of the following statements is true regarding referrals of consumers to an affiliated company? Select one: a. The customer or client must be informed that they are not required to use the services of the affiliated entity and are free to use other companies b. The only thing of value that is received from the arrangement (other than reasonable payments for goods, facilities or services actually furnished) is a return on the ownership interest. c. Both of these statements. d. None of these statements. - CORRECT ANSWERc. Both of these statements. The loan amount in a mortgage loan could increase if: Select one: a. It is an adjustable rate mortgage. b. It has a negative amortization feature. c. It has a balloon payment. d. Any of these choices. - CORRECT ANSWERb. It has a negative amortization feature. One of the loan options that must be disclosed when using the safe harbor provisions of the Regulation Z prohibition against steering is a loan with the lowest interest rate without a number of unfavorable factors. One of these factors relates to a balloon payment. Which of the following statements is correct regarding loans with balloon payments which are presented as an option for this disclosure category: Select one: a. The loan cannot have a balloon payment at any time. b. The loan cannot have a balloon payment in the first 10 years of the loan. c. The loan cannot have a balloon payment in the first 7 years of the loan. d. The loan cannot have a balloon payment in the first 5 years of the loan. - CORRECT ANSWERThe correct answer is: The loan cannot have a balloon payment in the first 7 years of the loan. What would be the consequences of a loan originator's failure to comply with the safe harbor provisions of the Regulation prohibition against steering: Select one: Post License Course (Barney Fletcher) Questions With Complete Solutions a. The loan originator would likely face fines and/or suspension or revocation of his or her mortgage loan originator license or registration. b. The loan originator would be deemed to have violated the prohibition against steering. c. The loan originator would be guilty of a misdemeanor. d. The loan originator would lose the protection of having been deemed to have complied with the prohibition against steering. Feedback - CORRECT ANSWERThe correct answer is: The loan originator would lose the protection of having been deemed to have complied with the prohibition against steering. The Loan Estimate Form must be delivered to or mailed to the consumer no later than the third business day after: Select one: a. Initial substantive contact. b. Consummation of the loan. c. The consumer's acceptance of the proposed loan. d. Receipt of the application. - CORRECT ANSWERd. Receipt of the application. Which of the following practices are recommended when establishing a Marketing Services Agreement (MSA)? Select one: a. Entering into an MSA with an affiliated company. b. Entering into an MSA with a month-to-month term. c. Including fees for allowing access to the firm's sales meetings. d. None of the above. - CORRECT ANSWERd. None of the above. What is the CFPB's primary concern about Marketing Services Agreements (MSAs)? Select one: a. These MSAs are flatly prohibited. b. Many of these agreements are, in effect, a way to attempt to circumvent the prohibition against kickbacks and referral fees. c. These agreements need the prior approval of the CFPB, which often does not occur. d. None of these choices. - CORRECT ANSWERb. Many of these agreements are, in effect, a way to attempt to circumvent the prohibition against kickbacks and referral fees. Shortly after a loan is consummated an error was discovered in the Closing Disclosure that changed the amount paid by the borrower. The creditor would have _____ to deliver or mail a revised Closing Disclosure. Select one: a. 30 days from the borrower's receipt of the Closing Disclosure. b. 30 days from the creditor's discovery of the error. c. 60 days from the borrower's receipt of the Closing Disclosure. Post License Course (Barney Fletcher) Questions With Complete Solutions A broker is being sued and as a protection the broker deposits a significant amount of money in the broker's trust account. This is known as: Select one: a. Commingling. b. Conversion. c. Disbursement. d. None of the above. - CORRECT ANSWERa. Commingling. With regard to the payment of a commission to the listing broker, the concept of "procuring cause" would be least significant with regard to which type of listing: Select one: a. Open listings. b. Exclusive listings. c. Exclusive right to sell listings. d. Net listings. - CORRECT ANSWERc. Exclusive right to sell listings. Sam Smith wants to buy a particular house and has agreed to pay the broker's commission. Which of the following is a TRUE statement? Select one: a. The broker is guaranteed a commission as soon as the buyer signs the employment contract b. The fact that the buyer is paying the broker's commission means that the broker is representing the buyer c. If the broker and the buyer sign an employment contract the broker is representing the buyer d. The broker must be licensed as a buyer's broker. - CORRECT ANSWERIf the broker and the buyer sign an employment contract the broker is representing the buyer The owner of a house tells the listing broker that he is HIV positive but he does not want prospective buyers to know this. One of the prospective buyers tells the listing broker that he has heard the seller is HIV positive and asks the broker if this is true. The broker Select one: a. must tell the prospective buyer that it is true. b. must honor his seller's confidentiality and tell the prospective buyer that it is not true. c. can tell the prospective buyer that he does not know. d. can tell the prospective buyer that this is an illegal question. - CORRECT ANSWERa. must tell the prospective buyer that it is true. Which of the following statements about property managers is NOT true? Select one: a. They must all be licensed. b. They maintain the property. c. They manage relations among tenants. d. They develop budgets. Feedback Post License Course (Barney Fletcher) Questions With Complete Solutions Property managers who are employed by the owner do not need to be licensed, so choice 'a' is the FALSE statement. The correct answer is: They must all be licensed. - CORRECT ANSWERa. They must all be licensed. A broker must disclose the types of agency relationships offered and how compensation might be shared with other brokers. Select one: a. prior to signing a contract for sale. b. prior to showing the property. c. prior to signing a listing agreement. d. within a reasonable time. - CORRECT ANSWERc. prior to signing a listing agreement. A firm got a real estate license on December 7th, 2022. The firm's license would expire on: Select one: a. December 7, 2024. b. December 31, 2024. c. December 7, 2026. d. December 31,2026. - CORRECT ANSWERd. December 31,2026. A salesperson runs an advertisement which includes the name and phone number of the brokerage firm. Which of the following statements is correct? Select one: a. Only the name of the firm must be printed in a size equal or greater than that of the salesperson. b. Only the phone number of the firm must be printed in a size equal or greater than that of the salesperson. c. Both the name and the phone number of the firm must be printed in a size equal to or greater than that of the salesperson. d. Neither the name nor the phone number of the firm must be printed in a size equal to or greater than that of the salesperson. - CORRECT ANSWERc. Both the name and the phone number of the firm must be printed in a size equal to or greater than that of the salesperson. A prospective applicant for a real estate salesperson's license takes the state exam and passes it in September 2020. In October 2021 the person submits his application for a real estate license. Select one: a. This person must pay a fee equal to 2 times the original fee. b. This person must retake the 75 hour required education prior to submitting his application. c. This person must complete post-license education before submitting his application. Post License Course (Barney Fletcher) Questions With Complete Solutions d. This person must retake the state licensing exam. - CORRECT ANSWERThe correct answer is: This person must retake the state licensing exam. Which of the following statements about offers is TRUE? Select one: a. An offer becomes a sales contract as soon as it is accepted. b. An offer must be accompanied by earnest money. c. Licensees must present all written and oral offers up to time of closing. d. Licensees must present all written offers up to time of closing. - CORRECT ANSWERLicensees must present all written offers up to time of closing. If a landlord and a tenant have a dispute in Georgia Select one: a. they may appeal to the real estate commission for a resolution. b. they must agree to binding arbitration. c. they may sue in a court of competent jurisdiction. d. they must be represented by a licensed Georgia attorney. - CORRECT ANSWERc. they may sue in a court of competent jurisdiction. REALTOR® A has a listing on a seller's home and the seller has accepted an offer. The offer is contingent upon the sale of the buyer's current home. REALTOR® B has a buyer who has made an offer. Under the Code of Ethics, what should listing REALTOR® A do? Select one: a. Ignore REALTOR® B's offer since the seller's home is already under contract. b. Reveal the existence of the contract but not the contingency. c. Reveal the existence of the contract and the contingency. d. Present the second offer to the seller without disclosing the existence of the offer or the contingency. - CORRECT ANSWERc. Reveal the existence of the contract and the contingency. A REALTOR® has a listing on a client's house. The sellers are getting a divorce and need to sell the home quickly. Under what circumstances can the REALTOR® reveal this fact to a potential buyer? Select one: a. Under no circumstances. b. Without restriction. c. Only if the buyer asks about the seller's motivation for selling. d. Only after getting informed consent from the seller. - CORRECT ANSWERd. Only after getting informed consent from the seller. A Realtor® who enters into a brokerage agreement with a buyer is obligated to disclose to the client each of the following issues, EXCEPT: Select one: Post License Course (Barney Fletcher) Questions With Complete Solutions the area. The REALTOR® knew that this was going on and some other brokers who had done so but refused to list any names for fear of retribution. How should the REALTOR® have handled this? Select one: a. Report the issue to the local police. b. Keep the information to himself. c. Report the matter to the Grievance Committee. d. File a criminal complaint to the US Attorney General. - CORRECT ANSWERc. Report the matter to the Grievance Committee. REALTOR® who is selling his or her own property is obligated to comply with the duties imposed by the Code of Ethics in which of the following circumstances: Select one: a. When the sale does NOT involve the MLS or cooperation with other licensees. b. When a cooperating broker who is not a REALTOR® is the procuring cause of the sale. c. Both of the above. d. None of the above. - CORRECT ANSWERStandard of Practice 1-1 states that REALTORS®, when acting as principals in a real estate transaction, remain obligated by the duties imposed by the Code of Ethics. The correct answer is: Both of the above. Under the Code of Ethics, REALTORS® may act as a dual agent: Select one: a. Under no circumstances. b. Only with informed consent. c. Without restriction. d. Only with the prior specific approval of the state regulatory agency. - CORRECT ANSWEROnly with informed consent. A set of moral values and principles that provide a measure to determine the "rightness" or "wrongness" of actions are: Select one: a. Standards. b. Ethics. c. Regulations. d. Laws. - CORRECT ANSWERb. Ethics. In the Code of Ethics, REALTORS® have obligations to: Select one: a. Clients. b. Customers. c. Other REALTORS®. d. All of the above. - CORRECT ANSWERd. All of the above. Post License Course (Barney Fletcher) Questions With Complete Solutions The Code of Ethics permits REALTORS® to receive compensation from both parties to a transaction: Select one: a. Under no circumstances. b. Without restriction. c. Only with the informed consent of either principal. d. Only with the informed consent of both principals. Feedback - CORRECT ANSWERd. Only with the informed consent of both principals. Under what circumstances would the Code of Ethics hold that the termination of a nearby bus stop be an adverse material fact which must be disclosed? Select one: a. Under all circumstances. b. Under no circumstances. c. If it was a heavily used bus stop. d. If the nearby bus stop was a crucial feature to the buyer. - CORRECT ANSWERd. If the nearby bus stop was a crucial feature to the buyer. A seller's house is in escrow. The listing broker receives a better offer from another buyer. The seller wants to cancel the current contract and accept this later offer. The Code of Ethics would require this listing broker to: Select one: a. Explain the risks involved and recommend the best option. b. Tell the seller to accept the second offer. c. Tell the seller to seek legal counsel about how to proceed. d. Ask the first buyer to rescind the contract. - CORRECT ANSWER: Tell the seller to seek legal counsel about how to proceed. A property manager is able to purchase supplies for the apartment complex at wholesale prices. The property manager marks that up to retail prices when charging the expense to the property owner. This practice would be ethical: Select one: a. In all cases. b. In no cases. c. If fully disclosed to the owner and consent is obtained. d. As long as the markup is no more than 10%. - CORRECT ANSWERThe correct answer is: If fully disclosed to the owner and consent is obtained.