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REE 3043 Exam questions with 100% Correct answers
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REE 3043 Exam questions with 100% Correct answers
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REE 3043 Exam questions with 100%Correct answers
Give three reasons why homeowners might be interested in a home equity loan
rather than a consumer loan. - ✔✔1. A better interest rate than found with
consumer loans
2. Longer term
3. Tax deductibility of the interest
Private mortgage insurance (PMI) is usually required on __________ loans with
loan-to-value ratios greater than __________ percent. - ✔✔Home,
80%
A jumbo loan is: - ✔✔A conventional loan that is too large to be purchased
by Fannie Mae or Freddie Mac.
The maximum loan-to-value ratio for an FHA loan is approximately: - ✔✔97%
Conforming conventional loans are loans that: - ✔✔Are eligible for purchase
by Fannie Mae and Freddie Mac
Home equity loans typically: - ✔✔open-ended lines of credit
,Probably the greatest contribution of FHA to home mortgage lending was to:
- ✔✔Establish the use of the level-payment home mortgage
Private mortgage insurance (PMI) premiums vary with the perceived riskiness of
the loan. Which of the following scenarios would result in a higher premium? In
other words, which of the following describes a higher risk loan? - ✔✔A
"cash-out" refinancing loan
Which of the following entities provides mortgage origination services and initial
funding within the "originate to distribute" framework? - ✔✔Mortgage
Banker
It would be hard to overstate the importance of the Federal Housing
Administration (FHA) in the history of housing finance. Which of the following
instruments created by the FHA is considered the single most important
financial instrument in modern housing finance? - ✔✔30-year level-payment,
fully amortizing loan
In securitization, mortgages are pooled together and certain cash flows are
packaged into mortgage backed securities (MBS) to be sold to investors. An MBS
entitles the investor to a share of which cash flows generated by the underlying
mortgages in the pool? - ✔✔Principal and interest paid
For conforming conventional home loans, the traditional payment ratios for
traditional (manually) underwritten loans are: - ✔✔28% and 36%
, Fannie Mae and Freddie Mac are government sponsored enterprises created by
the U.S. Congress in to provide liquidity in the home mortgage market. Which
of
the following statements regarding Fannie Mae and Freddie Mac is false: -
✔✔they lend money directly to homebuyers
In addition to providing home mortgages, large commercial banks have
specialized in providing short-term funding to non-depository mortgage
banking companies to enable them to originate mortgage loans and sell them in
the secondary market. This type of financing is commonly referred to as: -
✔✔Warehouse line of credit
Which of these statements is true about mortgage loans for income-producing
real estate? - ✔✔They usually are partially amortizing loans.
With what type of loan security arrangement is the deed held by a neutral third
party and returned upon payment of the mortgage in full? - ✔✔Deed of Trust
The Truth-in-Lending Act gives some mortgage borrower show long to rescind
a mortgage loan? - ✔✔3 days
Which statement is correct about the right of prepayment of a home mortgage
loan? - ✔✔Most home mortgage loans have the right of prepayment
without charge, but not all, and the borrower should check the loan carefully.
Partially amortizing mortgage loans require periodic payments of principal, but
are not paid off completely over the loan's term to maturity. Instead, the balance
of the principal amount is paid at maturity in what is commonly referred to as a:
- ✔✔Balloon Payment
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