Mortgage Lending Practices and Regulations, Exams of Finance

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A purchase money loan is best described as: - correct answer seller carrying back a first trust deed. During periods of tight money, lenders: - correct answer loosen property standards. A 100,000 loan at 7% payable at 583.33 per month is an: - correct answer installment note The 3 parties to a Deed of Trust are: - correct answer Trustor, Trustee, Beneficiary Regarding FHA and DVA qualifying property standards: - correct answer all properties must meet minimum qualifying standards If a conventional loan is NOT sold to a Fannie Mae or a Freddie Mac: - correct answer lenders can establish their own underwriting guidelines Another name for a swing loan is: - correct answer bridge loan The flow of funds from other investments back into savings accounts in thrift institutions is called: - correct answer Reintermediation For single family residences the URAR generally applies greater weight to: - correct answer The Sales Comparison Approach In regards to promissory notes: - correct answer the periodic payments on the installment note that reduces interest owed is referred to amortization A freeway adjacent to a home is an example of: - correct answer economic obsolescence Which of the following characterizes lending policies of life insurance companies? - correct answer A preference for very large projects The Fed's money management tools include all of the following except: - correct answer Persuading member banks to make loans to low and moderate income buyers In arriving at the value, the appraiser's best source for obtaining "comparables" would be: - correct answer MLS data Characteristics of credit unions include all of the following except: - correct answer Credit unions are generally less personal and less focused on the community than other lending institutions A single family dwelling sold for 300,000. The property is rented for 2,000 per month. The GRM is: - correct answer 12.5 (sales price / gross annual rent ) The principal purpose of the Depository Institutions and Monetary Control Act was to: - correct answer phase out restrictions on interest rates that lenders may pay depositors Interest bearing savings accounts in banks are formally called: - correct answer time deposits

When comparing items in the comparable section of appraisal, the following applies: - correct answer ... To guarantee fair lending practices, the Community Reinvestment Act (CRA) promoted: - correct answer A and C are correct The Home Value Code of Conduct: - correct answer to enhance quality and independence of the appraisal process The trade association that consists of the major investors and lenders in the mortgage banking field is the: - correct answer Mortgage Bankers Association When an applicant for a loan falls short of meeting qualifying income ratios, lenders may feel justified in approving a higher ratio if: - correct answer any of the above situations exisiting to justify The formula for calculating the front end ratio is: - correct answer Mortgage payment / Gross income The SAFE is responsible for the following: - correct answer in turn enacted the Nationwide Mortgage Licensing System (NMLS) A purchase money loan is best illustrated by: - correct answer buyer obtaining the down payment through an unsecured loan Perfect FHA front end and back end ratios are: - correct answer 28%, 36% To qualify for a VA loan, the department of veterans affairs applies a two phase procedure, namely: - correct answer residual income and qualifying income ratio The act of "seasoning funds" involves: - correct answer having the funds in your account long enough to be considered his/her own funds Regarding people who have participated in a short sale, bankruptcies or a past foreclosure: - correct answer such borrowers must only have restored their credit worthiness before being eligible for a new loan The following is most likely to affect one's credit score negatively: - correct answer current & frequent inquiries All of the following are true related to the new Qualified Mortgage rules except: - correct answer the QM only refers to 30 year loans Which of the following is the least likely to qualify as income for borrow qualifying purposes? - correct answer self employment income The maximum commission that may be charged for a 25,000 loan secured by a second trust deed: - correct answer 15%

Which of the following demonstrates high motivation in measuring borrowers ability to pay back loans? - correct answer house is purchased as an investment property How is a mortgage banker different from a mortgage broker? - correct answer .... You are a seller carrying back a purchase money deed of trust in the form of a second for part of the purchase price. The maximum interest rate that you may charge without violating CA law is: - correct answer .... Which of the following is a reoccurring closing cost? - correct answer Hazard insurance Under equal credit opportunity act, lenders may ask loan applicants: - correct answer whether they are married or unmarried Under the Real Estate Settlement Procedures Act, lenders: - correct answer must give written estimate of closing costs Which is true regarding balloon payments? - correct answer Balloon payments are prohibited with any loan seeking the protection under the QM rule. A lender has an actual loan application only when the following is acquired: - correct answer borrowers name, ssn, income info, subject property address, estimated prop value and requested loan amount Whether paid on the 1st of the month or any other day, mortgage payments: - correct answer .... The information required for a HMDA report filed annually by lenders is found in: - correct answer SECTION X IN LOAN APPLICATION A short sale can be described as: - correct answer a sale in which the property is sold for less than the amount owed An association of two or more parties who combine their financial resources for achieving specific investment objectives is best illustrated by a: - correct answer a syndication High balance conventional loans require the borrower to obtain protection for the lender in case of default. This protection is generally referred to as: - correct answer PMI When a property is offered for sale at a foreclosure auction, which of the following parties is not generally allowed to bid: - correct answer the trustee Following a foreclosure sale, a trustee's deed is issued under: - correct answer ... Which of the following is a FALSE statement regarding Payday Loans? - correct answer Payday loans are highly regulated for consumer protection purposes.

Which first trust deed amount is exempt from Real Property Mortgage Loan Law? - correct answer $10, Home warranty programs generally insure: - correct answer most major components up to one year Judicial foreclosures: - correct answer always involve court action The principal objective of AMI's is to: - correct answer .... The term used to describe situations where a lender defers monthly payments to avoid foreclosure is called: - correct answer forbearance So-called combination loans: - correct answer combine construction and permanent financing All are true as reasons to use an ARM vs fixed rate loan except: - correct answer .... Payouts under construction financing typically involve: - correct answer The governments fiscal policy is best described as: - correct answer The government's spending and taxing policy Upon discovery of a work of improvement made by the tenant without the landlords permission, the owner should record an: - correct answer notice of Non-Responsiblity within 10 days of knowledge Partiel lein releases clauses, such as those used in the financing of housing subdivisions, are most likely to be found in: - correct answer construction loans Under an ARM, the item used to determine if a rate change is warranted is called the: - correct answer index Regulation Z of the truth-in-lending law requires lenders who offer ARM loans to disclose to borrowers: - correct answer all of the above ;The Reverse Annuity Mortgage: - correct answer allows eligible borrowers to convert their home equity into various forms of nancial assistance The characteristics of an installment sales contract include all of the following EXCEPT: - correct answer The originally provided APR cannot vary beyond a tolerance of: - correct answer 1 percent The chief advantage to a 15 year loan over that of a 30 year loan is: - correct answer higher interest deductions over the life of the loan The Consumer Finance Protection Bureau's primary objective is: - correct answer ALL

The Ability to Repay regulation was enacted to: - correct answer assure that the borrower was qualified for the loan provided An all-inclusive trust deed is: - correct answer always a junior deed of trust For homes priced under 400k the highest loan to value ration would be found in: - correct answer ... Under CA Housing Financial Discrimination Act, financial institutions cannot deny or illegally discriminate in the fixings of the loan amount, interest rate or length of loan based upon: - correct answer any of the above criteria In a sale leaseback arrangement involving business properties: - correct answer lessees can deduct the lease payments on their tax returns Private mortgage insurance protects: - correct answer .... Under a land contract of sale, title to property is held by: - correct answer the vendor PMI is typically required on a conventional loan when the: - correct answer loan to value is above 80% FHA loans: - correct answer provide low qualifying ratios The Federal Housing Administration: - correct answer charges MIP Disadvantages to FHA financing include: - correct answer purchase price caps prevail A disadvantage to the single family dwelling as a rental is the: - correct answer 100% vacancy and rental loss when the dwelling is vacant All of the following comments regarding the USDA loans are accurate except: - correct answer the program is limited to only urban areas Rent control ordinances typically impact: - correct answer residential properties Under the FHA 203(b) program: - correct answer the maximum loan amount varies by county The interest rate charged on an FHA loan is established by: - correct answer the FHA That point at which a propertys rents just cover the expenses is called - correct answer the breakeven point The maximum guarantee to lenders in case of borrower default on a 300K DVA loan is: - correct answer ... The "debt coverage ratio" is calculated by: - correct answer dividing the net operating income by the annual debt service An FHA loan is said to be - correct answer ...

Which one of the following statements about VA loans is true? - correct answer ... A VA appraisal, known as CRV: - correct answer all of the above The periodic reduction of principal is labeled: - correct answer depreciation A loan of 100K is fully amortized over 25 years with payments of $722 per month, including interest of 8% per annum. The first months interest, rounded to the nearest dollar is: - correct answer $ Which one of these statements regarding termite reports is correct when securing a VA loan? - correct answer the termite clearance must state that there is no evidence of termites, wet rot, dry rot, or fungus. Which of the following is characteristic of cal-vet loans? - correct answer maximum loan amount exceeds that of conventional, FHA and va loans. Title to property brought under cal-vet financing is held by the: - correct answer .... Interest rates under cal-vet: - correct answer may not fall behind 3? The major source of capital brought into the mortgage market occurs through the operations of two corporations, namely: - correct answer Fannie Mae and Freddie Mac Points charged by lenders are based on the: - correct answer amount of loan A borrower's credit score will be positively affected by: - correct answer judicious use of longstanding credit cards which of the following statements concerning the discounting of a junior trust deed is correct? - correct answer ??