Practice Exam Sales License

A  Homeowner Affordability and Stability Plan

B  Mortgage Forgiveness Debt Relief Act of 2007

C  American Taxpayer Relief Act of 2012

D  Taxpayer Relief Act of 1997

A  Four goals

B  Six regional citizen-led initiatives

C  12 departments

D  Three data collection systems

A  Supervises national banks and financial institutions.

B  Produces currency and coins.

C  Investigates financial crimes including tax evaders.

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

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

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

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

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

A  Buy and hold

B  Fix and flip

C  Passive

D  Wholesaling

A  Loan modification

B  Deed in lieu of foreclosure

C  Reinstatement

D  Deficiency judgment

A  Department of Homeland Security

B  Department of Housing and Urban Development

C  Agency for Housing and Inclusive Communities

D  Department of the Interior

A  Individuals, such as family members

B  Employers

C  Local small businesses

D  Credit unions

A  Non-profit businesses

B  Community-managed lenders

C  Start-up business borrowers

D  Low-income urban borrowers

A  $240,682.34

B  $241,672.12

C  $241,976.21

D  $241,715.88

A  The rate at which borrowers can refinance their mortgages

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

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

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

A  Yes, for Native Americans on trust lands

B  Yes, in certain high-income areas

C  No

D  Yes, in certain low-income areas

A  No

B  Yes

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

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

A  Listings

B  Leads

C  Commissions

D  Buyers

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

B  The IRS must be notified

C  A Notice of Sale must be recorded

D  The reinstatement period must expire

A  Increase

B  Remain the same

C  Decrease

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

A  Physical depreciation

B  Functional obsolescence

C  Depreciation

D  External obsolescence

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

B  Member banks must lend more money to the public.

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

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

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, VA, or conventional

B  VA

C  FHA

D  Conventional

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

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

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

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 one more year.

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

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

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

A  With an interest-only loan and no down payment

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

C  For $100

D  For a 10% discount off list price

A  Acceleration

B  Alienation

C  Power of sale

D  Reconveyance

A  Double dipping

B  Undisclosed dual agency

C  Cooperating brokerage

D  Subagency

A  HELOC

B  PMM

C  RAM

D  Home equity

A  To be in direct competition with conventional lenders

B  To meet the provisions of the Farm Loanership Act

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

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

A  Title companies

B  General contractors

C  Lenders

D  Appraisers

A  Deed in lieu of foreclosure

B  Redemption

C  Short sale

D  Eviction

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

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

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

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

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

B  Petition for immediate repossession and eviction

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

D  Petition to enter, repossession, notice of eviction

A  To increase their equity

B  To get a lower interest rate

C  To change mortgage brokers

D  To change the bank that owns their loan

A  The lender’s guaranteed maximum

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

C  $210,000, the sales price

D  $215,000, the CRV

A  Bureau of Engraving and Printing

B  U.S. Treasury

C  U.S. Mint

D  The Federal Reserve

A  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.

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

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

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

A  Construction material

B  Type of ownership

C  Year built

D  Location

A  4%

B  5%

C  6%

D  7%

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

B  The draw period varies.

C  It’s always at least five years.

D  It’s never more than 10 years.

A  $4,000

B  $3,600

C  $3,000

D  $2,500

A  Equity-based

B  Participation

C  Interim

D  Multi-modal

A  Credit card balance

B  Car loan

C  Savings account

D  Mortgage

A  30

B  180

C  45

D  60

A  Page two

B  Page one

C  Page four

D  Page three

A  Loss of cash flow

B  Future cash income

C  Guaranteed income

D  Fewer jobs

A  Through a referee’s deed

B  By a deed of gift

C  Full covenant and warranty deed

D  Dedication by deed

A  Late charge

B  Subordination

C  Prepayment penalty

D  Lock-in

A  Territory

B  Tariff

C  Taxes

D  Term

A  Underwriting fee

B  Origination fee

C  Agent’s commission

D  Application fee

A  A redemption

B  A type of foreclosure

C  An eviction procedure

D  A type of financing

A  Total debt

B  Housing ratio

C  Payment debt

D  Loan-to-value ratio

A  Initial cap

B  Lower initial interest rate

C  Convertible feature

D  Balloon payment

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

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

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

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

A  Debt and net operating income

B  Housing ratio and total debt obligation

C  Residual income and debt-to-income

D  CRV and seller concessions

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

B  Could have been saved by paying discount points

C  Cash must be brought to closing

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

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

B  Scheduling the loan closing

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

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

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

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

C  It raises interest rates incrementally over time.

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

A  A refinancing strategy

B  An increase in property value

C  Paying off of a loan over time

D  A decrease in property value

A  Equal Credit Opportunity Act

B  Consumer Credit Protection Act

C  Community Reinvestment Act

D  Home Mortgage Discrimination Act

A  Trustee’s deed

B  Deed of trust

C  Notice of sale

D  Foreclosure deed

A  Five years in prison

B  Ten years in prison

C  Two years in prison

D  One year in prison

A  Graduated payment

B  Renegotiable rate

C  Adjustable rate

D  Fixed rate

A  Note with mortgage

B  Note with deed of trust

C  Contract for deed

D  Last will and testament

A  Coverage limits

B  Covered events

C  Co-pays

D  Co-insurance

A  Title II, Section 234(c)

B  Title I

C  Title II, Section 203(n)

D  Title II, Section 251

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

B  Random charges

C  Extra money paid to cover any unexpected bank fees

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

A  $250,000

B  $650,000

C  $276,596

D  $265,957

A  California Foreclosure Reduction Act

B  Mortgage Foreclosure Consultant Law

C  SAFE Act

D  Real Estate License Law

A  Emergency fund

B  Retirement account

C  Business checking account

D  Income tax account

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

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

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

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

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

B  Yes

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

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

A  82%

B  96%

C  72%

D  75%

A  Five times their investment in return

B  Special benefits

C  A certificate of appreciation

D  Interest

A  Buyer

B  Settlement agent

C  Seller

D  Lender

A  Conventional loan

B  Mobile home loan

C  Construction loan

D  Personal loan

A  Over supply

B  Recovery

C  Expansion

D  Recession

A  Bill

B  Stock

C  Bond

D  Note

A  Trust it.

B  Ignore it.

C  Verify it.

D  Run a background check on it.

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

B  The lender can sue Jasmine.

C  Jasmine can’t occupy the residence.

D  Jasmine can’t pay off her loan early.

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

B  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.

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

D  Yes, she should have partial entitlement left.

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

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

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

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

A  Discount window

B  Reserve requirements

C  Federal funds rate

D  Open-market operations

A  The rate at which borrowers can refinance their mortgages

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 a bank or lender may loan money to its most creditworthy borrowers

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

A  Cap rate

B  GRM

C  Replacement value

D  Value in situ

A  Amortized loan

B  Wrap-around mortgage

C  Bridge loan

D  Fixed rate loan

A  Deficiency judgment

B  Non-judicial foreclosure

C  Deed in lieu of foreclosure

D  Short sale

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

B  Service the client’s loan.

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

D  Take the client’s residential mortgage loan application.

A  Once the borrower has 20% or more equity.

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

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

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

A  Banks don’t have access to additional funds.

B  Banks are restricted from making loans to consumers.

C  Interest rates plummet.

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

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

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

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

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

A  Property lot size

B  Cost of living

C  Population size

D  Employment figures

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

B  Prohibits the borrower from suing the lender for mortgage fraud

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

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

A  Because California is a lien theory state.

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

C  Because California laws don’t allow judicial foreclosure.

D  Because California is a title theory state.

A  12

B  10

C  8

D  15

A  With a maturity term of 30 years

B  Without a specified maturity term

C  With a maturity term of one year or less

D  With a maturity term between two and 10 years

A  Partnership between mortgagors

B  Limited liability partnership

C  Partnership between mortgagees and mortgagors

D  Partnership between mortgagees

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

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

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

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

A  $60,000

B  $15,000

C  $30,000

D  $300,000

A  39 years

B  29 years

C  40 years

D  27.5 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  Yes; because she obtains the loan from a federally insured financial institution, the loan is subject to RESPA requirements.

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

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

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

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

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