REE 3043 Exam 2 Questions And Answers
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When a buyer of a property with an existing mortgage loan acquires the property and signs the
note for an existing loan, the buyer is acquiring the property: - answerby assumption.
Which of these points in a mortgage loan would be addressed in the...
When a buyer of a property with an existing mortgage loan acquires the property and signs the
note for an existing loan, the buyer is acquiring the property: - answer✔by assumption.
Which of these points in a mortgage loan would be addressed in the mortgage (possibly in the
note as well)? - answer✔Escrows
The Real Estate Settlement Procedures Act does which of these: - answer✔All of these
statements are correct.
( Requires that the borrower be able to inspect the closing statement a day before the actual
closing. Prohibits kickbacks between vendors of closing-related services and lenders. Requires
that a borrower receive a good faith estimate of closing costs shortly after a loan
application.Requires the use of a standard settlement statement for a mortgage loan closing.)
A type of loan that has grown in volume in recent years, which has raised concerns about
predatory lending practices, is the: - answer✔sub-prime mortgage.
With what type of loan security arrangement is the deed held by a neutral party and returned
upon payment of the mortgage in full? - answer✔Deed of trust.
Bob lost his job and has been consistently late paying his bills. The bank recognizes a
deterioration in Bob's credit score and has notified him that he must pay his home equity line of
credit in full. The mortgage clause that makes this possible is the: - answer✔demand clause.
The two elements of a mortgage loan include: - answer✔The note which describes the exact
terms of the financial obligation and the mortgage which pledges the property as security for the
note.
Which of the following is least correct regarding the benefits of mortgage finance? -
answer✔Homeowners can obtain credit on lesser terms than consumer debt (home equity credit
lines which are taxed unfavorably, shorter term and at a higher interest rate).
Consider a homeowner in mortgage distress who owes more than the value of the home, and is
unable to make the loan manageable by refinancing or modifying the mortgage. One recourse,
referred to as a ______________ ______________, entails the owner obtaining a contractual
offer from a buyer, which is acceptable by the lender, thus enabling the seller to be relieved of
some or all of the outstanding balance on the mortgage without foreclosure. - answer✔Short Sale
The element of an adjustable interest rate that is the "moving part" is the: - answer✔index.
A lender offers a mortgage loan consisting of 12 years of payments followed by an additional
large payment of principal with the last scheduled payment. This is characteristic of: - answer✔a
partially amortizing loan.
The "mark-up" that a lender adds to the index rate is referred to as the: - answer✔margin.
Which of the following statements regarding prepayment of the note is least correct ? -
answer✔FHA/VA mortgage loans do not have the right of prepayment.
A concern with payment caps is the potential for ____________. This happens when the actual
interest rate is higher than the effective interest rate which the payment cap permits, resulting in
the additional interest being added to the loan balance. - answer✔negative amortization
To identify the parties to a mortgage loan, the mortgagor is the _____________ and the
mortgagee is the ________________. - answer✔borrower, lender
The process of creating a "market-defining story" includes all of these questions except : -
answer✔What is the price.
Features of an office building that may be important to one market segment or another include: -
answer✔All of these answers are correct. (nature of other tenants. floor plate size. character and
amount of parking. provision for electronics and communication systems.)
Data used in the market research cases in Ling/Archer's chapter 7 that are publicly available over
the Internet include all of the following except : - answer✔data on job location from the National
Transportation Board.
Which factor contributes to real estate cycles? - answer✔Business cycles.
Which tool would a real estate investor use to seek to describe the human characteristics of
consumers that may have bearing on their response to products, packaging, advertising and
public relations efforts? - answer✔Psychographics.
In real life, the variables involved in predicting occupancy and rental rate growth parameters are:
- answer✔difficult to predict.
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