Practice Exam Sales License

A  Mortgage Forgiveness Debt Relief Act of 2007

B  American Taxpayer Relief Act of 2012

C  Taxpayer Relief Act of 1997

D  Homeowner Affordability and Stability Plan

A  Six regional citizen-led initiatives

B  Four goals

C  12 departments

D  Three data collection systems

A  Pays bills owed by the U.S. government.

B  Produces currency and coins.

C  Supervises national banks and financial institutions.

D  Investigates financial crimes including tax evaders.

A  Each tranche has specific rules for distributing income received from the collateral, but is organized so that each tranche has a similar risk.

B  Each tranche has specific rules for distributing income received from the collateral, and has differing balances, maturities, and risks.

C  Each tranche distributes income in the same way and to the same investors.

D  Each tranche has specific rules for distributing income received from the collateral, but is organized so that each tranche has a similar maturity.

A  Fix and flip

B  Buy and hold

C  Passive

D  Wholesaling

A  Loan modification

B  Deed in lieu of foreclosure

C  Reinstatement

D  Deficiency judgment

A  Department of Housing and Urban Development

B  Agency for Housing and Inclusive Communities

C  Department of the Interior

D  Department of Homeland Security

A  Individuals, such as family members

B  Credit unions

C  Employers

D  Local small businesses

A  Community-managed lenders

B  Non-profit businesses

C  Low-income urban borrowers

D  Start-up business borrowers

A  $241,976.21

B  $241,715.88

C  $241,672.12

D  $240,682.34

A  The rate at which a bank can obtain a loan from its Federal Reserve bank when using commercial paper as collateral

B  The rate at which borrowers can refinance their mortgages

C  The rate at which a bank can obtain a loan from another bank

D  The rate at which a bank or lender may loan money to its most creditworthy borrowers

A  Yes, in certain high-income areas

B  No

C  Yes, in certain low-income areas

D  Yes, for Native Americans on trust lands

A  Yes, but Yancey may petition the VA to request removal of the pre-payment penalty

B  No

C  It depends on the terms of the loan, not the VA

D  Yes

A  Leads

B  Listings

C  Buyers

D  Commissions

A  The mortgage service must notify the borrower of their delinquency and foreclosure alternatives

B  A Notice of Sale must be recorded

C  The IRS must be notified

D  The reinstatement period must expire

A  Remain the same

B  Decrease

C  Historically, property values have not followed a consistent pattern.

D  Increase

A  Depreciation

B  External obsolescence

C  Physical depreciation

D  Functional obsolescence

A  Member banks must increase interest rates on loans they make.

B  Member banks must keep more assets on deposit at the reserve bank.

C  Member banks can keep fewer assets on deposit at the reserve bank.

D  Member banks must lend more money to the public.

A  They’re regulated by federal the government.

B  They’re funded by private investors.

C  They’re purchased by secondary mortgage markets.

D  Banks focus lending offerings on local businesses and residents.

A  FHA

B  VA

C  Conventional

D  FHA, VA, or conventional

A  It’s an outdated process that’s no longer used.

B  It’s the same as the judicial process, just called by a different name in different states.

C  It may be used if the deed of trust includes a power-of-sale clause.

D  Regardless of how it sounds, the lender still has to go to court.

A  Payments must have been received for at least three years, and must be expected to continue for at least three more years.

B  Payments must have been received for at least three years, and must be expected to continue for at least one more year.

C  Payments must have been received for at least one year, and must be expected to continue for at least three more years.

D  Payments must have been received for at least two years, and must be expected to continue for at least two more years.

A  For a 50% discount off list price and a down payment of only $100

B  With an interest-only loan and no down payment

C  For a 10% discount off list price

D  For $100

A  Reconveyance

B  Alienation

C  Power of sale

D  Acceleration

A  Subagency

B  Double dipping

C  Undisclosed dual agency

D  Cooperating brokerage

A  Home equity

B  RAM

C  PMM

D  HELOC

A  Because the Constitution requires the federal government to support agriculture in specific ways, such as agricultural lending

B  To be in direct competition with conventional lenders

C  To meet the provisions of the Farm Loanership Act

D  To ensure that credit is available to agricultural producers, who often can’t meet conventional underwriting standards due to the nature of their work

A  Title companies

B  General contractors

C  Lenders

D  Appraisers

A  Redemption

B  Deed in lieu of foreclosure

C  Short sale

D  Eviction

A  It allows the lender to place a lien against all current and future personal tax refunds of the borrower who defaulted.

B  It gives the lender the ability to place liens against any property it chooses, including cars and boats.

C  It gives lenders the ability to recover losses due to a foreclosure sale from any current or future property the borrower owns.

D  It shelters the borrower’s future properties from bankruptcy to protect the lender’s interests.

A  Petition for legal ownership, opportunity to redeem property, notice of eviction if property is not redeemed

B  Petition for immediate repossession and eviction

C  Petition to enter, repossession, notice of eviction

D  Notification of pending auction, public auction, notice of eviction

A  To get a lower interest rate

B  To change the bank that owns their loan

C  To change mortgage brokers

D  To increase their equity

A  $212,500 (an average of the two numbers)

B  $215,000, the CRV

C  $210,000, the sales price

D  The lender’s guaranteed maximum

A  U.S. Treasury

B  The Federal Reserve

C  Bureau of Engraving and Printing

D  U.S. Mint

A  Glen can assure his client that he will find a less bigoted seller in the same complex.

B  Glen can ask his client if he’s eligible for FHA financing, which might change the seller’s mind.

C  Glen can recommend that he and his client plan a retaliatory response to the seller’s discriminatory action to make all buyers avoid the condo.

D  Glen can recommend filing a complaint with HUD about the alleged discrimination.

A  Type of ownership

B  Construction material

C  Year built

D  Location

A  5%

B  7%

C  4%

D  6%

A  It’s never more than 10 years.

B  There really isn’t a draw period to speak of.

C  It’s always at least five years.

D  The draw period varies.

A  $3,600

B  $3,000

C  $2,500

D  $4,000

A  Equity-based

B  Multi-modal

C  Participation

D  Interim

A  Mortgage

B  Credit card balance

C  Car loan

D  Savings account

A  30

B  45

C  60

D  180

A  Page one

B  Page four

C  Page three

D  Page two

A  Future cash income

B  Fewer jobs

C  Guaranteed income

D  Loss of cash flow

A  Dedication by deed

B  By a deed of gift

C  Through a referee’s deed

D  Full covenant and warranty deed

A  Subordination

B  Late charge

C  Prepayment penalty

D  Lock-in

A  Term

B  Taxes

C  Tariff

D  Territory

A  Underwriting fee

B  Origination fee

C  Application fee

D  Agent’s commission

A  A type of foreclosure

B  A redemption

C  An eviction procedure

D  A type of financing

A  Total debt

B  Payment debt

C  Housing ratio

D  Loan-to-value ratio

A  Initial cap

B  Convertible feature

C  Balloon payment

D  Lower initial interest rate

A  To require institutional lenders to allow a buyer to assume a loan from a seller

B  To modify the timing of TILA and RESPA disclosures in a seller carry-back transaction

C  To prohibit usurious loan terms in a privately funded real estate transaction

D  To ensure that all parties are educated about loan terms and about who will be compensated for arranging credit

A  CRV and seller concessions

B  Housing ratio and total debt obligation

C  Residual income and debt-to-income

D  Debt and net operating income

A  Cash must be brought to closing

B  The loan costs, including total payments, finance charge, and TIP

C  Could have been saved by paying discount points

D  The borrower and the seller each pay or receive at closing

A  Scheduling the loan closing

B  Presenting a revised loan offer to the consumer after they requested a lower rate

C  Informing a consumer of the loan rates that are publicly available

D  Explaining the steps the consumer needs to take to obtain a loan offer

A  It raises interest rates incrementally over time.

B  It allows the lien(s) ahead of the junior mortgage to be refinanced without changing their priority in lien positions.

C  It removes a lien from a property when it’s been repaid.

D  It allows a junior mortgage to move into first lien position.

A  A refinancing strategy

B  An increase in property value

C  A decrease in property value

D  Paying off of a loan over time

A  Community Reinvestment Act

B  Equal Credit Opportunity Act

C  Consumer Credit Protection Act

D  Home Mortgage Discrimination Act

A  Deed of trust

B  Trustee’s deed

C  Notice of sale

D  Foreclosure deed

A  Two years in prison

B  Ten years in prison

C  One year in prison

D  Five years in prison

A  Fixed rate

B  Adjustable rate

C  Graduated payment

D  Renegotiable rate

A  Contract for deed

B  Last will and testament

C  Note with mortgage

D  Note with deed of trust

A  Co-pays

B  Coverage limits

C  Covered events

D  Co-insurance

A  Title II, Section 234(c)

B  Title II, Section 251

C  Title I

D  Title II, Section 203(n)

A  A fee paid to lenders for the use of their money

B  A fee to keep other borrowers from taking interest in your property and buying it out from under you

C  Random charges

D  Extra money paid to cover any unexpected bank fees

A  $265,957

B  $250,000

C  $650,000

D  $276,596

A  Real Estate License Law

B  Mortgage Foreclosure Consultant Law

C  SAFE Act

D  California Foreclosure Reduction Act

A  Income tax account

B  Retirement account

C  Emergency fund

D  Business checking account

A  The appraiser may weigh one or two approaches more heavily than the others, as appropriate for the property type.

B  The appraiser may choose not to reconcile the three appraisal approaches.

C  The appraiser will weigh the value produced from each approach equally.

D  The appraiser may weigh only one approach more heavily than the others.

A  Yes

B  No, she doesn’t meet the credit score requirement.

C  No, she doesn’t meet the total debt obligation requirement.

D  No, she doesn’t meet the housing ratio requirement.

A  72%

B  82%

C  75%

D  96%

A  Special benefits

B  A certificate of appreciation

C  Five times their investment in return

D  Interest

A  Buyer

B  Lender

C  Settlement agent

D  Seller

A  Mobile home loan

B  Construction loan

C  Conventional loan

D  Personal loan

A  Recovery

B  Recession

C  Expansion

D  Over supply

A  Bill

B  Stock

C  Bond

D  Note

A  Ignore it.

B  Trust it.

C  Verify it.

D  Run a background check on it.

A  Jasmine can’t pay off her loan early.

B  The lender can put Jasmine’s loan in default.

C  Jasmine can’t occupy the residence.

D  The lender can sue Jasmine.

A  No, she can’t obtain another VA loan until she has paid off the first loan entirely.

B  Yes, she should have partial entitlement left.

C  Yes, but she must sell the first property and either pay off the loan or have the loan assumed by another veteran before using her VA loan entitlement again.

D  No, since she has already used her entitlement, she can’t get another VA loan.

A  The lender may charge a fee to the new borrower.

B  A novation can be used to remove the original borrower’s liability.

C  The seller’s credit score may improve although he’s not making any mortgage payments.

D  The lender may require the new borrower to meet qualification standards.

A  Federal funds rate

B  Reserve requirements

C  Open-market operations

D  Discount window

A  The rate at which a bank or lender may loan money to its most creditworthy borrowers

B  The rate at which a bank can obtain a loan from its Federal Reserve bank when using commercial paper as collateral

C  The rate at which borrowers can refinance their mortgages

D  The rate at which a bank can obtain a loan from another bank

A  Replacement value

B  GRM

C  Value in situ

D  Cap rate

A  Wrap-around mortgage

B  Bridge loan

C  Fixed rate loan

D  Amortized loan

A  Deficiency judgment

B  Non-judicial foreclosure

C  Short sale

D  Deed in lieu of foreclosure

A  Service the client’s loan.

B  Offer to provide the client with a list of lenders they could consider working with to obtain the loan.

C  Take the client’s residential mortgage loan application.

D  Offer to negotiate the terms of the client’s loan application.

A  Once the borrower has 20% or more equity.

B  Once the loan-to-value ratio reaches 80%.

C  After the borrower has paid on the loan for five years.

D  Once the loan-to-value ratio reaches 78% of the original value.

A  Banks have access to additional funds through their district reserve bank.

B  Banks don’t have access to additional funds.

C  Banks are restricted from making loans to consumers.

D  Interest rates plummet.

A  An FHA loan is best for borrowers who have large down payments.

B  FHA loans have more stringent requirements than conventional loans do.

C  An FHA loan is usually more attractive to borrowers who have lower credit scores and down payments.

D  FHA loans are available to all borrowers, regardless of credit history.

A  Cost of living

B  Property lot size

C  Employment figures

D  Population size

A  Prohibits the lender from suing the borrower for damages if foreclosure occurs

B  Gives the borrower a recourse for exiting the loan when financial difficulties occur

C  Allows the lender to sue the borrower for damages if foreclosure occurs

D  Prohibits the borrower from suing the lender for mortgage fraud

A  Because California is a title theory state.

B  Because California is a lien theory state.

C  Because California foreclosure laws allow a statutory right of redemption of up to one year with a judicial foreclosure.

D  Because California laws don’t allow judicial foreclosure.

A  15

B  12

C  8

D  10

A  With a maturity term of one year or less

B  With a maturity term of 30 years

C  Without a specified maturity term

D  With a maturity term between two and 10 years

A  Partnership between mortgagors

B  Partnership between mortgagees and mortgagors

C  Limited liability partnership

D  Partnership between mortgagees

A  It may be a first mortgage, a junior mortgage, or a junior wrap-around mortgage.

B  The lender is loaning on land, air, and a promise to build.

C  This might be used in the case of a furnished condominium.

D  The funds are often used for home renovations or to fund a college education.

A  $300,000

B  $30,000

C  $15,000

D  $60,000

A  29 years

B  27.5 years

C  40 years

D  39 years

A  No; RESPA only applies to loans obtained from private lenders.

B  Yes; all loans secured by real estate are subject to RESPA requirements.

C  No; commercial and business loans are exempt from RESPA requirements.

D  Yes; because she obtains the loan from a federally insured financial institution, the loan is subject to RESPA requirements.

A  He should continue to buy presents because he values doing so, and not worry about how much he is spending.

B  He should break up with Nancy, as she costs too much.

C  He should continue to buy presents because he values doing so, but can buy less expensive items.

D  He should tell Nancy that he can’t afford to buy her presents anymore.