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REE 3043 Final Exam questions with 100% Correct answers
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REE 3043 Final Exam questions with 100% Correct answers
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REE 3043 Final Exam questions with100% Correct answers
When a buyer of a property with an existing FHA mortgage loan acquires a
property by putting her signature on the note for the existing loan, the buyer
is acquiring the property: - ✔✔By assumption
All of the following statements regarding foreclosure are true except:
A. Foreclosure is a costly process for all the parties involved
B. Only claimants who are properly notified in the foreclosure suit can lose
their claims to the property
C. When a lender foreclosures on a property, it extinguishes all superior
liens, bringing about a free and clear sale of the property
D. The net recovery by a lender from a foreclosed loan seldom exceeds 80 percent
of the outstanding loan balance and commonly is much less than this amount -
✔✔C. When a lender foreclosures on a property, it extinguishes all superior
liens, bringing about a free and clear sale of the property
Promissory note - ✔✔A promise to pay a debt at agreed upon terms
Mortgage or Deed of trust - ✔✔Pledges property as security (collateral) for
the loan
What is ARMS - ✔✔adjustable rate mortgages
, ARMS features - ✔✔- initial teaser rate
- initial adjustment period
- adjustment interval (1 year is most common)
Fully indexed rate - ✔✔Index plus Margin
Capped rate - ✔✔Initial plus Cap
Lender's yield cash flow - ✔✔amount disbursed by lender = LA - Lender fees
APR cash flow - ✔✔Amount Financed= LA - Broker fees
Effective borrowing cost cash flow - ✔✔amount received by borrower=
LA - lender fees - all third party fees
Finding the RMB after m payments - ✔✔1. Calculate
PMT 2. Find PV of remaining pmts discounted at
interest rate
How to calculate the ARM payment at adjustment - ✔✔1.
Determine adjusted rate
2. Determine payment at adjusted rate with RMB as PV
The element of an adjustable interest rate that is the "moving part is the:
- ✔✔Index
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