Real Estate Mortgage Concepts, Exams of Real Estate Management

Download Real Estate Mortgage Concepts and more Exams Real Estate Management in PDF only on Docsity! P ag e1 Texas Principles of Real Estate II Final Exam Questions And Correct Answers Verified Latest 2024- 2025 Guaranteed Pass Grade A + UPDATED!! 1 FHA loans are_______________________ and VA loans are_________________________. A. Insured by the Federal Housing Administration ----- guaranteed by the Department of Veteran Affairs. B. Backed by conventional banks ----- backed by commercial banks C. Only for people with children ----- only for people without children D. Farm loans ----- lake loans -- CORRECT ANSWER-->A. Insured by the Federal Housing Administration ----- guaranteed by the Department of Veteran Affairs. 2 The expenses, which a lender incurs while processing a mortgage loan application, are recovered from the borrower as: A. Discount points B. An origination fee C. A mortgage insurance premium D. Private mortgage insurance -- CORRECT ANSWER-->B. An origination fee 3 Zoning is enforced by: A. Building permits B. Building codes C. Building inspectors D. All of the above -- CORRECT ANSWER-->All of the above Land plus new construction cost minus depreciation is the formula for the ________. A. Cost approach B. Market data approach C. Income approach D. Capitalization approach -- CORRECT ANSWER-->A. Cost approach Removing the original borrower's name from the contract and substituting the new buyers name is called: A. Novation B. Substitute C. Covenants D. Subdividing -- CORRECT ANSWER-->A. Novation P ag e2 The right to redeem the property before a mortgage foreclosure sale is called: A. Equitable redemption B. Buyer redemption C. Statutory redemption D. This is never used in Texas. -- CORRECT ANSWER-->A. Equitable redemption The right to redeem the property after a tax foreclosure sale is called: A. Equitable redemption B. Buyer redemption C. Statutory redemption D. This is never used in Texas. -- CORRECT ANSWER-->C. Statutory redemption The Texas Bootstrap Loan Program: A. Is a self-help housing construction program for very low-income families B. Is only for persons over 65 C. Must be built completely by the family D. Is only for homes costing more than $300,000 -- CORRECT ANSWER-->A. Is a self- help housing construction program for very low-income families The Federal Reserve Bank: A. Is the most common bank seen in most cities B. Was created to provide the nation with a more stable monetary and financial system C. Provides loans to most residential home buyers. D. Was created in 2013 -- CORRECT ANSWER-->B. Was created to provide the nation with a more stable monetary and financial system A mortgage that includes real estate and personal property is a: A. Reverse mortgage B. Package mortgage C. Blanket mortgage D. Equity mortgage -- CORRECT ANSWER-->B. Package mortgage The Federal National Mortgage Association was organized by the federal government in 1938 to buy FHA mortgage loans from lenders. P ag e5 A. Mortgagee-----mortgagor B. Sublessor---- sublessee C. Sublessee ------sublessor D. Buyer--------seller -- CORRECT ANSWER-->B. Sublessor---- sublessee The term that BEST describes a tenant's interest in the property under a lease is a: A. Life estate B. Reversionary interest C. Remainder interest D. Leasehold estate -- CORRECT ANSWER-->D. Leasehold estate When a property has become uninhabitable and the landlord has refused to repair the property the tenant may file a: A. Constructive eviction B. Foreclosure against the owner C. Judicial eviction D. The tenant must stay in the property until the lease is up. -- CORRECT ANSWER-->A. Constructive eviction Property managers have a _______________ relationship with the property owner. A. Partnership B. Subagency C. Binding D. Fiduciary -- CORRECT ANSWER-->D. Fiduciary Written documents affecting title to real estate are recorded: A. Where the titleholder resides B. Where the titleholder has legal residence C. At the county clerk's oce where the property is located D. At any county clerk's oce in Texas -- CORRECT ANSWER-->D. At any county clerk's oce in Texas P ag e6 A person appointed by a court to settle the estate of a deceased person when the executor cannot perform or refuses to perform is: A. Another executor B. A legatee C. An administrator D. A devisee -- CORRECT ANSWER-->C. An administrator What is an abstract of title? A. Title insurance B. A history of all recorded activity affecting a parcel of real estate C. A judgment on real property D. A patent -- CORRECT ANSWER-->B. A history of all recorded activity affecting a parcel of real estate A chain of title shows the linkage of property ownership that connects the present owner to the original source of title. In most cases it starts with: A. Ownership from 1955 B. Chattel C. A suit in a federal court D. The original grant of the land from the government to a private citizen -- CORRECT ANSWER-->D. The original grant of the land from the government to a private citizen A handwritten will signed by the testator but not witnessed is known as a(n): A. Nuncupative will B. Holographic will C. Oral will D. Formal will -- CORRECT ANSWER-->B. Holographic will P ag e7 The seller and buyer have signed a contract and the buyer has put up earnest money. They are closing at ABC Title. Who holds the earnest money until closing? A. ABC Title in a trust account B. Seller in their bank account C. Buyer in a savings account D. An attorney for the seller and buyer -- CORRECT ANSWER-->A. ABC Title in a trust account The premiums for the title insurance policy are set by the: A. Title Company B. Texas Department of Insurance C. State Department of Premiums D. Texas Real Estate Commission -- CORRECT ANSWER-->B. Texas Department of Insurance Prorations of items in a real estate closing are made usually as of the date of: A. Recording the deed B. The mortgage payment C. Buyers' walkthrough D. Closing -- CORRECT ANSWER-->D. Closing A statutory year has ____________ days and each month has ___________ days. A. 365 ----- 31 B. 365 ----- 28 C. 360 ----- 28 D. 360 ----- 30 -- CORRECT ANSWER-->D. 360 ----- 30 The result of combining two parcels of land to make a larger more valuable property is called: P ag e1 0 The principle of Highest and Best Use refers to the use of the property to result in the: A. Highest sales price B. Lowest property tax C. Highest value for the property D. Lowest insurance rate on the property -- CORRECT ANSWER-->C. Highest value for the property When using the market approach to appraise residential property the price on the ______________ will be adjusted up or down. A. Comps B. Subject property C. Both the comps and the subject property D. The market approach is not used to appraise residential prop -- CORRECT ANSWER-->A. Comps The trustee in a deed of trust: A. Writes the contract for the buyer B. Shows the property to the buyer C. Forecloses on the property in the event of default D. Collects the monthly payments -- CORRECT ANSWER-->C. Forecloses on the property in the event of default The original lender has sold the note to another lender but has retained the serving rights. Is the original lender required to notify the borrower of the sale? A. No, the lender is not required to notify the borrower if the servicing rights are not sold. B. Yes, the borrower must always be told when the loan is sold. C. No, the original lender never has to notify the borrower about anything. D. Yes, if the borrower asks. -- CORRECT ANSWER-->A. No, the lender is not required to notify the borrower if the servicing rights are not sold. P ag e1 1 The trustee in a deed of trust uses the _____________ to speed up the loan A. Acceleration clause B. Due-on-sale clause C. Mortgage clause D. Default clause -- CORRECT ANSWER-->A. Acceleration clause Lenders in Texas prefer to use the: A. Deed of Trust because it has non-judicial foreclosure B. Deed of Trust because it has judicial foreclosure C. Regular mortgage D. Bill of Sale -- CORRECT ANSWER-->A. Deed of Trust because it has non-judicial foreclosure The due-on-sale clause is another name for the: A. Bill of sale B. Alienation clause C. Acceleration clause D. Foreclosure clause -- CORRECT ANSWER-->B. Alienation clause Sue is going to buy a house from Bob and is going to assume Bob's loan. The act of removing Bob's name from the loan and placing Sue's name on the loan is called: A. Subject to B. Alienation C. Novation D. Due-on-sale -- CORRECT ANSWER-->C. Novation The Home Owner's Loan Corporation (HOLC) created: A. PITI B. Short sales C. Escrow P ag e1 2 D. Amortized loans -- CORRECT ANSWER-->D. Amortized loans ABC Lending has charged the borrower an origination fee. This fee: A. Is not interest B. Is charges for processing the loan application C. Both A and B D. None of the above -- CORRECT ANSWER-->C. Both A and B The _____________ pays expenses and receives income for the day of closing. A. Seller B. Buyer C. Seller and Buyer D. Title company -- CORRECT ANSWER-->A. Seller Real estate agents are not allowed to do appraisals unless they have an appraiser's license, but they often do a(n): A. IOU B. CMA C. ADD D. FFA -- CORRECT ANSWER-->B. CMA A VA loan requires: A. No down payment B. A down payment of 35% of the sales price C. A down payment of 3.5% of the sales price D. A down payment equal to 20% of the sales price -- CORRECT ANSWER-->A. No down payment The Truth-in-Lending Act provides all the following EXCEPT: A. A uniform system for disclosures B. Prevention of inaccurate and unfair credit billing C. Telling financial institutions what interest rate they can charge D. Prevention of