ENGRADE Chapter 14

Question 1

Sally Seller has hired Larry Lister to list her property. Larry will advertise the home in the local paper. Which of the following will be permitted?

Answer 1

House for sale, 4 bedrooms, 2.5 baths, 2300 sq ft, call ABC Realty Company number

Question 2

An eligible veteran made and offer of $52,000 to purchase a home contingent upon his obtaining a 100% VA Guaranteed loan. Four weeks after the offer was accepted, a CVR for $50,000 was issued, and the veteran was found to be qualified for a VA loan. In this case

Answer 2

the veteran may withdraw from the transaction without penalty

The veteran may purchase property by making a $2K down payment.

Question 3

Which of the following terms is considered most synonymous?

Answer 3

interim financing and construction loan

Question 4

Fannie Mae

Answer 4

purchases FHA loans in the secondary mortgage market.

Question 5

The type of real estate loan that allows the lender to increase the outstanding balance of a loan up to the original sum in the note while advancing additional funds is the

Answer 5

Open end mortgage

Question 6

the Truth in Lending Act sets forth the requirements regarding real estate loans to individuals for all of the following purposes

Answer 6

Equity Lines of Credit
Additions to residential properties
Installation of a backyard swimming pool

(not commercial purposes)

Question 7

A promissory note has to be in writing to be enforceable but it is normally recorded

Answer 7

TRUE

Question 8

An eligible veteran is under contract to purchase a home for 80K that he wants to finance with a VA guaranteed 100 % LTV. Four weeks after contract formation, a certificate of reasonable value CRV for 77K was issued for the property in this situation, the veteran may consider any of the following options

Answer 8

withdrawing from the transaction without penalty

purchasing the property with an additional 3K cash from his own funds

negotiating with the seller to reduce the sales price $3K

Question 9

A borrower obtained a $7K second mortgage loan for five years at 6% interest per annum. Monthly debt service payments were $50. The final payment included the remaining outstanding principal balance. What type of loan is this?

Answer 9

A fully amortized loan

Question 10

An extension of credit from a seller to a buyer to allow the buyer to complete the transaction is called a

Answer 10

Purchase Money Mortgage

Question 11

Which of the following is NOT a required chief disclosure for compliance with the Truth in Lending Act?

Answer 11

LTV ratio

Question 12

Regulation Z applies to

Answer 12

Real estate sales agreements

Question 13

The Federal Home Loan Mortgage Corporation was established as a secondary mortgage market entity to assist the

Answer 13

Federal Banks

Question 14

The type of loan that will most likely have the lowest LTV ratio is a

Answer 14

Conventional loan

Question 15

Which of the following terms may appear in advertisement for a real estate loan without triggering Regulation Z full disclosure requirements?

Answer 15

“Assumable Mortgages Available”

Question 16

A developer had a mortgage loan on an entire development. When a lot was sold to the buyer, the developer was able to deliver title to that lot free of the mortgage lien by utilizing a partial release. What type of loan did the developer have?

Answer 16

BLANKET MORTGAGE

Question 17

In a title theory state, a borrowers default could result in the collateral property being sold at auction as part of a

Answer 17

POWER OF SALE FORECLOSURE

Question 18

used as a method of refinancing real property where the seller remains liable for an existing debt on the property which is not paid off.

Answer 18

WRAP AROUND LOAN

Question 19

defined as relegation to a lesser position, usually in respect to a right or a security.

Answer 19

SUBORDINATION