Post License Course (Barney Fletcher) Questions and Answers 2024, Exams of Nursing

Download Post License Course (Barney Fletcher) Questions and Answers 2024 and more Exams Nursing in PDF only on Docsity! Post License Course (Barney Fletcher) Questions and Answers 2024 Within the first five years around ___% of agents leave the real estate business Correct Answer is 80-90% For buyers what are the five steps of the pre-qualification process Correct Answer is 1. Urgency 2. Motivation 3. Financial Ability 4. Wants and Needs 5. Agency For sellers what are the five steps to the first appointment Correct Answer is 1. Urgency 2. Motivation 3. Concerns 4. Expectations 5. Hesitations A person who may be willing to engage in a real estate transaction Correct Answer is Prospect A person who is willing to perhaps have a conversation but has no real desire to engage in a real estate transactions Correct Answer is Suspect In determining whether a person is a suspect or a prospect we must consider Correct Answer is Urgency and motivation When setting goals, its important they be Correct Answer is Specific Measurable Attainable Realistic Timely Most common type of target market is a particular neighborhood of homes Correct Answer is Farming 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 Answer is SWOT The primary objective of any type of real estate prospecting is to Correct Answer is Generate 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 Answer is Turnover ratio A method of prospecting that will involve the telephone, but only as part of a mix of different types of contacts Correct Answer is Circle prospecting A ______ agent has more control than a _____ agent Correct Answer is Listing/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 Answer is 1-step listing presentation What is the best way to establish a personal brand in real estate Correct Answer is To develop a good reputation Which of the following choices is the most common way buyers find a house they purchased Correct Answer is Internet What is the most important part of your "brand" in your real estate career Correct Answer is Your 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 Answer is Target market As a real estate agent your primary product is Correct Answer is Your 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 Answer is Market share Which of the following is the best way to ask for a referral Correct Answer is Who 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 Answer is Staging less authority than a universal agent but may represent the principal in an ongoing series of continuous events, usually in one general field of endeavor. In real estate, property managers Correct Answer is general agent represents the principal in one specific transaction. Correct Answer is special agent acts as agent for an agent and has the same duties and obligations as the agent Correct Answer is subagent a position of trust and must put the interest of his client (Steve) above those of all others, including and especially those of himself. Correct Answer is fiduciary obligations This means that the agent is required to act in the best interest of the client and must not put anyone else's interests ahead of those of the client. Correct Answer is loyalty Agents are only required to follow the ________instructions of their client. Correct Answer is lawful 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 Answer is reasonable 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 Answer is implied 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 Answer is fiduciary What is the greatest risk in a case where a buyer's agent submits offers on several homes simultaneously? Correct Answer is . 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 is . "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 Answer is Statute of Frauds. What offers must a listing broker present to a seller? Correct Answer is All 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 Answer is Making 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 Answer is reasonable care 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 Answer is nothing 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 Answer is agency by ratification What is the purpose or effect of the equal dignities rule? Correct Answer is To 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 is . 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 Answer is full 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 Answer is closing 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 Answer is 1) 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. 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 Answer is c. 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 Answer is d. 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 Answer is Civil 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 Answer is a. commingling A listing agreement may be terminated by: 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? Correct Answer is Adeline has violated the Civil Rights Act of 1866; One of the recent emerging issues in Fair Housing complaints has been the issue of excluding applicants on the basis of having a record of criminal convictions. Why is this the case? a. There is a new protected class of people with criminal convictions; b. African-Americans and Latinos have a disproportionately higher rate of having criminal conviction records than Caucasians. c. There is an increasing interest in prison reform; d. Due to provisions of the Dodd-Frank Act. Correct Answer is b. African-Americans and Latinos have a disproportionately higher rate of having criminal conviction records than Caucasians. The purpose of the Fair Housing Amendments Act of 1988 was to: Select one: a. Add two new protected classes; b. Repeal the Civil Rights Act of 1866; c. Remove two protected classes; d. Establish complaint procedures. Correct Answer is a. 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 Answer is c. 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 Answer is a. 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 Answer is b. 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 Answer is b. 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; b. A single mother with a 19-year old child; c. A married couple with two grown children; d. A pregnant woman. Correct Answer is d. 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 Answer is b. 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 Answer is Against 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 Answer is a. 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 Answer is d. 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; b. Punitive damages; c. Injunctive relief; d. Declaratory relief. Correct Answer is a. 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 Answer is b. 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. An owner of a single-family home may sell or rent it without being subject to the Fair Housing Act as long as he or she does not use the services of a licensed broker and he or she: Select one: a. Does not own more than three houses at one time; b. Does not own more than four houses at one time; c. Has never owned more than three houses; d. Is not a licensee. Correct Answer is a. Does not own more than three houses at one time; Oak Gardens is a luxury apartment complex that has a gym open to its residents. Which of the following policies regarding the gym would most likely be found to be enforceable by the courts? Select one: a. No children below the age of 14 may enter the gym. b. No children below the age of 18 may enter the gym. c. No children below the age of 14 may enter the gym without being supervised by a parent or other adult relative. d. No children below the age of 14 may enter the gym without being supervised by a responsible adult. Correct Answer is No children below the age of 14 may enter the gym without being supervised by a responsible adult. What is the first step in a successful disparate impact fair housing complaint based on criminal convictions? Select one: a. To show an intent to discriminate. b. To show that the policy does not have a legitimate, necessary business purpose; c. To show that a different policy could avoid the disparate impact; d. To show that the burden of the criminal conviction policy puts a heavier burden on members of a protected class. Correct Answer is d. 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 Answer is b. 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 Answer is When 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 Answer is The 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 Answer is c. 1 year; 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 Answer is a. 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 Answer is a. 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 Answer is As 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 Answer is a. Consequential damages; In past years, fair housing complaints involving insurance companies typically involved complaints regarding: Select one: a. Steering; b. Redlining; c. Blockbusting; d. Discriminatory pricing. Correct Answer is b. 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; d. The defendant will then have to show that the policy serves some business necessity Correct Answer is d. The defendant will then have to show that the policy serves some business necessity A disabled tenant makes a request for a reasonable accommodation which the property owner believes to be unreasonable. What further obligation does the owner have to the tenant at that point? Select one: a. To investigate the possibility of a different accommodation that would achieve the same objective but create less burden for the property owner; b. To submit to mediation; c. To submit the request to a court for further consideration; d. None whatsoever. Feedback Correct Answer is a. To investigate the possibility of a different accommodation that would achieve the same objective but create less burden for the property owner; In today's economy, which of the following factors have most frequently been involved in fair housing complaints against insurance companies? Select one: a. Insurance companies have denied coverage or charged higher premiums to property owners who accept housing choice vouchers; b. Connecticut law which requires property owners to accept housing choice vouchers; c. Both of the above; d. None of the above. Correct Answer is c. Both of the above; Which of the following words or phrases in an advertisement would be considered a violation of the Fair Housing Act? Select one: a. Walking distance to public transit; b. Exclusive neighborhood; c. Desirable neighborhood; d. Mother-in-law suite. Correct Answer is b. Exclusive neighborhood; 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 Answer is b. 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 Answer is a. 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 Answer is c. 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 Answer is a. 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 Answer is c. 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; c. The Civil Rights Act of 1968; d. The Civil Rights Act of 1974. Correct Answer is c. 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 Answer is his 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 Answer is a. 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 Answer is d. 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 Answer is a. Act as a resource rather than an advisor; In today's economy, what is the most common type of discrimination complaint filed against municipalities? a. To determine if steering is going on; b. To comply with the requirement to report this data to the federal government; c. Both of the above; d. None of the above. Feedback Correct Answer is a. To determine if steering is going on; Information gathered because of the Home Mortgage Disclosure Act would most likely be used for which type of discrimination lawsuit? Select one: a. Overt evidence of disparate treatment; b. Comparative evidence of the disparate treatment; c. Either of the above; d. Evidence of disparate impact. Feedback Correct Answer is d. Evidence of disparate impact. What is the biggest difference between a lawsuit regarding a disparate impact lawsuit for discrimination and a disparate treatment lawsuit? Select one: a. The plaintiff in a disparate impact case does not have to prove a discriminatory intent; b. The plaintiff in a disparate treatment case does not have to prove a discriminatory intent; c. Disparate treatment cases are generally more complicated than disparate impact cases; d. Disparate impact cases are easier to win than disparate treatment cases. Correct Answer is a. The plaintiff in a disparate impact case does not have to prove a discriminatory intent; The concept of "preying on the powerless" is seen most vividly in: Select one: a. Fraud for profit; b. Subprime loans; c. Property flipping; d. Silent seconds. Correct Answer is b. Subprime loans; An unethical loan originator directs his marketing efforts at finding poor or elderly customers who are not sophisticated. This would be an example of: Select one: a. Redlining; b. Capping; c. Steering; d. Targeting. Feedback Correct Answer is d. Targeting. One of the most common forms of Mortgage Fraud in the US. is equity skimming. It includes all of the following, EXCEPT: Select one: a. Homeowners who are behind on payments being targeted by criminals; b. Homeowners facing foreclosure that need to sell their homes quickly c. A promise made by skimmer that will take over payments, but never pays; d. Homeowners buying less house than they can afford Correct Answer is Equity 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 Answer is a. 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 Answer is The 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 Answer is a. 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 Answer is d. 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; d. Legal standards and ethical standards are the same. Correct Answer is a. 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 Answer is A 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 Answer is The 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 Answer is c. 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; c. Directing marketing efforts to poor, elderly or otherwise unsophisticated borrowers so as to take advantage of them; d. Charging excessive fees. Correct Answer is Steering is the practice of directing borrowers to loans which offer higher compensation to the MLO (such as subprime loans) without regard to suitability. The correct answer is: Directing borrowers to loans which offer higher compensation to the loan originator without regard to the suitability to the borrower; The subprime market includes: Select one: a. Predatory lending practices least visible in the subprime market; b. Respectable sub prime lenders serving no important social function; c. Predatory lenders that target elderly offering loan terms to drain equity; d. Predatory lenders take advantage of highly-educated home buyers. Correct Answer is Sadly, the subprime market includes a number of predatory lenders that target the elderly. The correct answer is: Predatory lenders that target elderly offering loan terms to drain equity; Directing a borrower toward a subprime loan when that borrower did not need a subprime loan is an example of: Select one: a. Steering; b. Targeting; c. Redlining; d. Capping. Correct Answer is a. Steering; Which of the following documents would be considered part of the mortgage process under the Georgia Residential Mortgage Fraud Act? Select one: a. The Uniform Residential Mortgage Loan Application; b. Payroll stubs; c. Bank statements; d. All of the above. Correct Answer is d. All of the above When people violate their ethical standards, they often try to explain that the action was not unethical, or at least was a lesser violation than what it might first appear to be, through a process called: Select one: a. Justification; b. Rationalization; c. Explanatiion; d. Normalization. Correct Answer is b. Rationalization; Fred, a homeowner, gets behind on his mortgage payments. Seth targets Fred because he needs to sell his home quickly to avoid foreclosure. Seth promises to take over Fred's payments, but when the deed to the home is signed over, Seth rents the home, and never assumes the loan nor makes any payments. Seth is practicing: Select one: a. Equity stealing' b. Equity skimming; c. Equity scamming; d. Equity mortgaging. Correct Answer is b. Equity skimming; Francis recognized a cash-back at closing scam. What should she do? Select one: 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 Answer is c. 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 Answer is c. 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 Answer is a. 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 Answer is d. 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 Answer is Many 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 Answer is a. Fraud; 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 Answer is a. 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 Answer is Sam 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: Correct Answer is Conditions of sale adjustments relate to whether the sale was an arm's length transaction where market conditions usually related to how long ago the sale occurred. The correct answer is: Conditions of sale adjustments relate to whether the sale was an arm's length transaction where market conditions usually related to how long ago the sale occurred. he formula used to calculate the value of a property under the income approach is: Select one: a. Potential gross income divided by capitalization rate = value. b. Effective gross income divided by capitalization rate = value. c. Net operating income divided by capitalization rate = value. d. Net operating income divided by potential gross income = value. Feedback Correct Answer is The formula for determining the value under the income approach is net operating income divided by capitalization rate = value. The correct answer is: Net operating income divided by capitalization rate = value. For the years from 2000 through 2015, what was the highest percentage of home sales purchased by institutional investors? Select one: a. 12% b. 9.6% c. 8.25%. d. 7.5%. Correct Answer is b. 9.6% A law firm which represents high-level corporate clients would most likely 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 Correct Answer is a. Class A; According to the International Council of Shopping Centers (the ICSC), what percentage of retail spending occurs within the walls of a physical store? Select one: a. 75%; b. 83%; c. 89%; d. 94% Correct Answer is d. 94% Which of the following properties would most likely be considered an investment property rather than a commercial property: Select one: a. An office building; b. A warehouse; c. A shopping center; d. A single-family residence purchased by an institutional investor. Correct Answer is d. A single-family residence purchased by an institutional investor. A retail center needs exterior paint. The cost of painting the structure is estimated at $20,000. An appraiser expects that this would add $25,000 to the value of the property. This would be an example of: Select one: a. Incurable functional obsolescence. b. Curable functional obsolescence. c. Incurable physical deterioration. d. Curable physical deterioration. Correct Answer is d. Curable physical deterioration. Disadvantages to investors in Section 8 housing include: Select one: a. Bureaucratic requirements for establishing and operating Section 8 housing; b. Initial and annual inspection requirements; c. Eviction procedures that are more restrictive than most state laws; d. All of these choices. Correct Answer is d. All of these choices. 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 Answer is d. 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 Answer is b. 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 Answer is c. 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 Answer is c. 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; c. A person who is moving to the area due to a job transfer; d. A person who is buying a vacation home. Correct Answer is b. 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 Answer is a. 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; d. It is a statement from the buyer to the tenant stating what rent will be charged upon closing of the transaction. Correct Answer is An estoppel certificate is a written statement signed by a tenant stating the amount of rent being paid by the tenant. The correct answer is: It is a written statement signed by a tenant stating what rent the tenant pays. The method of estimating construction costs that totals the raw materials required, the labor costs, management costs and a profit allowance is known as the: Select one: a. Square foot. b. Cubic foot. c. Unit in place. d. Quantity survey. Correct Answer is d. Quantity survey. The method of estimating construction costs that estimates the installed cost of each component part of the structure (such as walls, doors, windows, etc.) is the: Select one: a. Square foot. b. Cubic foot. c. Unit in place. d. Quantity survey. Correct Answer is c. Unit in place. A strip center is also known as a: Select one: a. Neighborhood center; b. Community center; c. Regional mall; d. Convenience center; Correct Answer is d. Convenience center; When is it especially important to "stabilize" the net operating income when using the capitalization approach to appraisal? Select one: a. When valuing a new building. b. When the net operating income has had wide variations over the past several years. c. When net operating income is below expectations. d. When expenses have been lower than expected for the past several years. Correct Answer is Stabilizing the net operating income is especially important when it has had wide variations over the past several years. The correct answer is: When the net operating income has had wide variations over the past several years. A subject property has four bedrooms while a comparable sale has only three bedrooms. The extra bedroom adds $7,500 to the value of a property in this neighborhood. The $7,500 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 Answer is Appraisers never adjust the subject property. The comp is "poor" in terms of bedrooms so the $7,500 would be added to the sale price of the comp. The correct answer is: Added to the sale price of the comparable sale. Which of the following types of retail centers would draw its customers from the population within 3 to 6 miles of the store? Select one: a. Strip center; b. Neighborhood center; c. Community center; d. Regional mall. Correct Answer is c. Community center; The Environmental Protection Agency estimates that what percentage of dry cleaners currently in operation have contamination issues? Select one: a. 45%. b. 55%. c. 65%. d. 75%. Correct Answer is d. 75%. The discounted cash flow approach to appraising income properties is based on the concept of: Select one: a. Substitution. b. Disintermediation. c. Contribution. d. Time value of money Correct Answer is d. 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 Answer is If 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 Answer is 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; 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 Answer is Interest 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; 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 Answer is c. 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. A retail center with an insufficient number of public bathrooms. c. A commercial structure in a city whose water supply has been contaminated. d. A property that has lost value due to increased traffic at a local airport. Correct Answer is b. A retail center with an insufficient number of public bathrooms. What is the primary significance of the Uniform Commercial Code in regard to a commercial real estate transaction? Select one: a. It allows lenders to place a lien against personal property, which could be significant if the sale includes personal property such as equipment or inventory, for instance. b. It is the primary federal law governing the sale of commercial properties in the United States. c. The Uniform Commercial Code governs the use of mortgages in a commercial real estate transaction. d. The Uniform Commercial Code is never an issue in any real estate transaction. Correct Answer is The Uniform Commercial Code allows lenders to create a lien against personal property, which could be an issue if the purchase of a commercial property includes significant items of personal property, such as equipment or inventory. The correct answer is: It allows lenders to place a lien against personal property, which could be significant if the sale includes personal property such as equipment or inventory, for instance The cubic foot method of estimating construction costs would most likely be used to estimate the cost to build which of the following structures? Select one: a. A warehouse. b. A shopping center. c. A four-plex. d. A convenience store. Correct Answer is a. A warehouse. A title commitment from a title insurance company for an ALTA policy would show which of the following: Select one: a. Liens against the property. b. Easements or encroachments affecting the property. c. Both of the above. d. None of the above. Correct Answer is c. Both of the above. A Phase II Environmental Site Assessment would include: Select one: a. Soil samples. b. Water samples. c. Subsurface soil borings. d. All of these choices. Correct Answer is d. All of these choices. The cost approach to appraisal is based primarily on the principle of: Select one: a. Anticipation. b. Substitution. c. Progression. d. Contribution. Correct Answer is b. Substitution. What is the formula for calculating depreciation under the age-life approach? Select one: a. Effective age divided by actual age. b. Effective age divided by economic life. c. Actual age divided by economic life. d. Economic life divided by actual age. Correct Answer is b. Effective age divided by economic life. What is the purpose of an access agreement in the purchase of commercial property? Select one: a. To prevent any modifications to the access areas of the property prior to closing of the purchase. b. To allow the seller access to the property for a specified period of time after closing to remove any remaining personal property. c. To allow the buyer access rights to the property before the closing so that desired inspections can be made. d. To allow local building inspectors access to the property. Correct Answer is c. To allow the buyer access rights to the property before the closing so that desired inspections can be made. A corporate investor who is considering the purchase of a commercial building would use the Weighted Average Cost of Capital to determine the: Select one: a. Capitalization rate. b. Discount rate. c. Remainder rate. d. Sample rate. Feedback The Weighted Average Cost of Capital (WACC) is used to determine the discount rate in a discounted cash flow analysis. The correct answer is: Discount rate. Correct Answer is The Weighted Average Cost of Capital (WACC) is used to determine the discount rate in a discounted cash flow analysis. The correct answer is: Discount rate. 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 Answer is a. 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 Answer is c. $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 is . 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 Answer is a. 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 Answer is c. Existing competing hotels will always be able to undercut your room rates; 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. d. A type of financing using the issuance of preferred stock by the corporation buying the property. Correct Answer is c. An intermediate financing between the property owner and the mortgage lender. A use and occupancy clause in a commercial lease prohibits a tenant from committing "waste." In this context, waste means: Select one: a. Excessive amounts of garbage which raises the landlord's operating costs. b. Using excessive amounts of water or electricity. c. A change in the condition of real property caused by a tenant that damages or destroys the value of the property. d. None of the above. Correct Answer is The correct answer is: A change in the condition of real property caused by a tenant that damages or destroys the value of the property. Each of the following statements about markets is correct, EXCEPT: Select one: a. A market is a medium that allows buyers and sellers of a specific good or service to interact in order to facilitate an exchange. b. Many markets exist in physical locations. c. All markets require personal interaction between the buyer and the seller. d. There are both wholesale and retail markets. Feedback Correct Answer is c. All markets require personal interaction between the buyer and the seller. The simplest, most desirable type of mezzanine financing, and the one least often available is: Select one: a. Assignment of the ownership. b. A cash flow note. c. A second mortgage. d. An equity position. Feedback Correct Answer is c. A second mortgage. A commercial mortgage loan has a prepayment penalty which starts at a higher level, decreases each year for several years, then disappears. This is called a(n): Select one: a. Interest guarantee. b. Lockout. c. Defeasance. d. Step-down. Correct Answer is d. Step-down. Which of the following documents would provide the most information about the tenants in a commercial building that is to be the collateral for a commercial mortgage loan? Select one: a. Proforma. b. Rent roll. c. Loan application. d. Form 1003. Correct Answer is The rent roll would show a great deal of information about each specific tenant. (Forrm 1003 is the Uniform Residential Loan Application and would not be used in a commercial transaction.) The correct answer is: Rent roll. The government purchases portion of the Gross Domestic Product would include: Select one: a. Defense spending. b. Transfer payments. c. Interest on the federal debt. d. All of the above. Correct Answer is a. Defense spending. Which of the following statements about subleases or assignments is TRUE? Select one: a. A sublessee will make the rent payments to the sublessor. b. An assignee will make the rent payments to the assignor. c. A sublease must expire at the same time as the sublessor's lease. d. When a lease is assigned, the original tenant is automatically free from any liability for the monthly rent. Correct Answer is a. A sublessee will make the rent payments to the sublessor. What is the actual difference between a renewal of a lease and an extension of a lease? Select one: a. A renewal is for the same duration as the original lease while an extension is only for one year. b. An extension is for the same duration as the original lease while a renewal is only for one year. c. A renewal requires the renegotiation of the entire lease while an extension just extends the lease out into the future under the same terms, except that the rent may change. d. An extension requires the renegotiation of the entire lease while a renew just extends the lease out into the future under the same terms, except that the rent may change. Correct Answer is A renewal requires the renegotiation of the entire lease while an extension just extends the lease out into the future under the same terms, except that the rent may change. Which of the following statements is true regarding the Debt Yield Ratio that is NOT also true of the Debt Service Coverage Ratio? Select one: a. A higher ratio is better for the lender. b. The ratio is not affected by the interest rate or amortization period of the loan. c. The ratio can be an important consideration in underwriting the loan. d. The ratio is used more often for commercial loans than for residential loans. Correct Answer is The 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 Answer is Start 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%. a. Mortgage insurance premiums. b. Discount points. c. Appraisal fees. d. Loan origination fees. Correct Answer is c. 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 Answer is a. 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: Select one: a. 3 business days after the Loan Estimate is delivered or mailed; b. 5 business days after the Loan Estimate is delivered or mailed; c. 7 business days after the Loan Estimate is delivered or mailed; d. 10 business days after the Loan Estimate is delivered or mailed. Correct Answer is c. 7 business days after the Loan Estimate is delivered or mailed; Bigcity Bank requires mortgage applicants to obtain a lender's policy of title insurance in order to obtain a mortgage loan. ABC Title Insurance is given as a recommended provider for the policy, with an estimated fee, but the consumer has the right to obtain coverage from another provider if so desired. The fee would be paid to the provider, not the lender. If the applicant chooses to obtain coverage from a different provider, what error tolerance factor would this estimate be subject to? Select one: a. This fee would not be subject to the error tolerance requirements. b. This fee would be subject to the 15% error tolerance requirements. c. This fee would be subject to the 10% error tolerance requirements. d. This fee would be subject to the zero error tolerance requirements. Correct Answer is Since the applicant exercised the right to shop for another provider, this title insurance premium would not be subject to any error tolerance requirements. (There is no 15% error tolerance category.) The correct answer is: This fee would not be subject to the error tolerance requirements. Each of the following loans would be subject to the Real Estate Settlement Procedures Act, EXCEPT: Select one: a. A conventional refinancing loan on a duplex. b. An FHA loan. c. A first mortgage that is made by a bank and held in its portfolio. d. An agricultural loan. Correct Answer is d. An agricultural loan. If a lender failed to give a borrower the Loan Estimate, the borrower could rescind the loan for up to: Select one: a. 30 days; b. Three years; c. One year; d. The maturity date of the loan. Correct Answer is b. Three years; Each of the following actions are recommended to those who have or are considering a Marketing Services Agreement, EXCEPT: Select one: a. The fees charged should not change unless the services there is an objective change in the services provided. b. The MSA partner should be designated as a "preferred provider" to consumers. c. The market value of the services provided should be determined or verified by a neutral third party. d. The contract should be carefully reviewed by an attorney who is well-versed and experienced with matters dealing with RESPA. Correct Answer is b. The MSA partner should be designated as a "preferred provider" to consumers. The form which replaced the HUD-1 or HUD1-a form is the: Select one: a. RESPA Disclosure. b. Closing Disclosure. c. Uniform Settlement Statement. d. None of these. Feedback Correct Answer is b. Closing Disclosure. Which of the following statements about Marketing Services Agreements (MSAs) is FALSE? Select one: a. The CFPB has released clear guidance on what it considers to be an acceptable MSA. b. When the CFPB reviews an MSA, it will want to see evidence that the promised services were actually provided. c. The CFPB believes that MSAs present the risk of steering consumers to the MSA partner. d. None of these statements is false. Correct Answer is a. The CFPB has released clear guidance on what it considers to be an acceptable MSA. Which of the following choices is the primary determinant of whether or not an affiliated company will be considered a "sham affiliate?" Select one: a. Whether the firm uses a DBA instead of its actual name. b. Whether the referring affiliate's ownership percentage or income distribution is a function of referrals generated. c. Both of the above. d. None of the above. Correct Answer is A sham affiliate is an affiliate where the ownership percentage and/or the income distributions are a function of the referrals given. The correct answer is: Whether the referring affiliate's ownership percentage or income distribution is a function of referrals generate In which of the following loans would the borrower be entitled to a three day right of rescission: Select one: a. A new mortgage used to finance the purchase of a duplex, which will include the personal residence of the buyer; b. A refinance of an existing first mortgage from the same lender; c. A home equity line of credit; d. A commercial loan. Correct Answer is c. 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 Answer is 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 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 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 Answer is d. 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 Answer is b. 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. d. 60 days from the creditor's discovery of the error. Correct Answer is b. 30 days from the creditor's discovery of the error. The new Closing Disclosure Form combines what previous forms? Select one: a. The GFE and final TIL. b. The final TIL and HUD-1. c. The final TIL and Special Information Booklet. d. The GFE and HUD-1 Correct Answer is b. The final TIL and HUD-1. Once the Loan Estimate is delivered or mailed, the loan cannot be consummated for at least: Select one: a. 3 business days; b. 5 business days; c. 7 business days; d. 10 business days. Correct Answer is c. 7 business days; A bank owns a large number of REO properties. It maintains a practice that it will only give listings on these properties to real estate licensees who have referred borrowers to that bank. This practice is: Select one: a. Not a violation of RESPA. b. Not a violation of RESPA so long as the licensees use their best efforts to sell the properties. c. A violation of RESPA. d. Not a violation so long as the referral comes after the licensee has sold the property. Correct Answer is c. A violation of RESPA. Each of the following would be considered a loan from a "federally-related lender, EXCEPT: Select one: a. VA loans; b. Mortgage loans made by banks and sold to Fannie Mae. c. Mortgage loans made by private individuals. d. Mortgage loans made by mortgage companies and sold to Fannie Mae. Correct Answer is c. Mortgage loans made by private individuals. If a loan has a demand feature, the lender can: Select one: a. Require financial disclosures from the borrower. b. Require the borrower to make larger escrow account payments. c. Foreclose against the property without regard to the normal foreclosure procedures. d. Require the borrower to pay off the loan prior to the scheduled maturity date. Correct Answer is Require the borrower to pay off the loan prior to the scheduled maturity date. John decides to help his brother sell his house. He advises his brother about a market price for his house and helps him advertise the property. Select one: a. This is legal because the person is John's brother. b. This is legal if John receives no compensation for his help. c. This is illegal even if John receives no compensation. d. This is illegal because John is not licensed. Correct Answer is The correct answer is: This is legal if John receives no compensation for his help. Which of the following statements is NOT true about a community association manager? Select one: a. He must have a CAM license. b. He must be associated with a real estate broker. c. The management contract is with the community association manager. d. The community association manager collects the rents. Correct Answer is The false statement is that the management contract is with the community association manager. The contract is with the broker. The correct answer is: The management contract is with the community association manager. An exclusive right to sell listing Select one: a. does not have to have an expiration date. b. can be verbal. c. cannot obligate the seller for more than 120 days. d. earns the broker a commission regardless of who is the cause of the sale. Correct Answer is d. earns the broker a commission regardless of who is the cause of the sale. Which of the following statements is/are TRUE? Select one: a. Sally has an option to buy a piece of property, but finds another property she likes better. She allows her option to expire. The broker may disburse the option money to the optionor. b. A broker may withdraw his commission from the trust account when the transaction closes. c. A broker must pay the bank service charges on the trust fund out of his own funds. d. All of the above statements are true. Correct Answer is d. All of the above statements are true. 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 Answer is a. 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 Answer is c. 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: 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 Answer is c. 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 Answer is d. 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: a. That the seller's agent is forbidden by the Code of Ethics to reveal the terms and conditions of any offer made by the buyer to anyone other than the seller; b. The potential for additional or offsetting compensation from other brokers, from the seller or landlord, or from other parties; c. Any potential for the buyer/tenant representative to act as a disclosed dual agent, e.g., listing broker, subagent, landlord's agent, etc.; d. The Realtor®'s company policies regarding cooperation. Correct Answer is that the seller's agent is forbidden by the Code of Ethics to reveal the terms and conditions of any offer made by the buyer to anyone other than the seller; Under what conditions does the Code of Ethics permit a REALTOR® to refuse to submit an offer or counteroffer when the property is already under a contract for sale? Select one: a. Without restriction b. Under no circumstances. c. If the seller has waived the requirement in writing. d. If the transaction is within 10 days of closing. Correct Answer is Standard of Practice 1-7 states that offers must continue to be presented until closing unless the client has waived that requirement in writing. The correct answer is: If the seller has waived the requirement in writing. Which of the following practices would always be a violation of the Code of Ethics? Select one: a. A net listing. b. A listing broker who will cooperate with other brokers but will not pay compensation to the cooperating broker. c. Both of the above. d. None of the above. Correct Answer is a. A net listing Which of the following advertisements would violate the Code of Ethics prohibition against interference with existing exclusive brokerage agreements? Select one: a. A personal letter to all homeowners who have listed their homes for sale but have yet to sell. b. A personal letter to all homeowners in a community. c. Both of the above. d. None of the above. Correct Answer is a. A personal letter to all homeowners who have listed their homes for sale but have yet to sell. When can a REALTOR® contact a homeowner who already has an exclusive listing agreement with another broker? Select one: a. Without restriction as long as the discussion is in regards to a listing after the current listing expires. b. Only if the listing broker refuses to provide information about when the listing will expire. c. Only with the seller's permission. d. None of the above. Correct Answer is Only if the listing broker refuses to provide information about when the listing will expire. Realtors® may represent the seller/landlord and buyer/tenant in the same transaction: Select one: a. Under no circumstances; b. Only with full disclosures to both parties; c. Only with the informed consent of both parties; d. Only with both full disclosures to both parties and the informed consent of both parties. Correct Answer is d. Only with both full disclosures to both parties and the informed consent of both parties. NAR® arbitration can be required for commission disputes for which of the following members? Select one: a. A dispute between two brokers. b. A dispute between a broker and an associated salesperson. c. Both of the above. d. None of the above. Feedback Correct Answer is a. A dispute between two brokers. A Realtor® is a partner in a partnership that owns a rental property. When the property is sold, the Realtor® must disclose his or her ownership interest to the buyer or buyer's representative: Select one: a. If the Realtor® owns 10% or more of the partnership; b. If the Realtor® owns 5% or more of the partnership; c. If the Realtor® owns 1% or more of the partnership; d. In all cases, regardless of the Realtor®'s percentage of ownership. Correct Answer is d. In all cases, regardless of the Realtor®'s percentage of ownership. Under the NAR Code of Ethics, a consumer would be considered a "client" of a Realtor®: Select one: a. If the Realtor® acts as agent for the consumer; b. If there is a legally recognized non-agency relationship with the consumer; c. In either of the above circumstances; d. Any time a Realtor® works for or with a consumer in a real estate transaction. Correct Answer is c. In either of the above circumstances; In Case Study 2-15 the FHA contacted a REALTOR® to discuss a suspicion that local brokers had been engaged in defrauding the FHA by overstating the value of homes in 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 Answer is c. 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.