Question 1

An overencumbered property would be one with a market value of

Accepted Answer

A)  $125,000 with a first mortgage of $75,000 and a second mortgage of $26,000. 
B)  $375,000 with a first mortgage of $25,000 and a second mortgage of $200,000. 
C)  $120,000 with a first mortgage of $110,000 and a second mortgage of $15,000. 
D)  $49,500 with a first mortgage of $20,000 and a second mortgage of $1,000 and a third mortgage of$2,000. 
A)  $125,000 with a first mortgage of $75,000 and a second mortgage of $26,000. 
B)  $375,000 with a first mortgage of $25,000 and a second mortgage of $200,000. 
C)  $120,000 with a first mortgage of $110,000 and a second mortgage of $15,000. 
D)  $49,500 with a first mortgage of $20,000 and a second mortgage of $1,000 and a third mortgage of$2,000.

Question 2

Prior to the introduction of adjustable rate mortgages, the FHLBB approved the use of

Accepted Answer

A)  variable rate mortgages. 
B)  renegotiable rate mortgages. 
C)  both a and b. 
D)  neither a or b. 
A)  variable rate mortgages. 
B)  renegotiable rate mortgages. 
C)  both a and b. 
D)  neither a or b.

Question 3

"Rich uncle " financing is a variation of equity sharing.

Accepted Answer

A) True 
 B)False

Question 4

In order to make adjustable rate mortgage loans more attractive to borrowers, lenders offer

Accepted Answer

A)  lower initial interest rates. 
B)  gifts such as appliances, trips, etc. 
C)  lower insurance rates. 
D)  lower down payments. 
A)  lower initial interest rates. 
B)  gifts such as appliances, trips, etc. 
C)  lower insurance rates. 
D)  lower down payments.

Question 5

Choose the one most appropriate answer for each.
-a mortgage secured by real and personal property

Accepted Answer

A) adjustment period 
B) adjustable rate mortgage (ARM) 
C) blanket mortgage 
D) blended-rate loan 
E) buy-down mortgage
F)carryback financing
G)contract for deed
H)equity mortgage
I)equity sharing
J)graduated payment mortgage
K)interest rate cap
L)negative amortization
M)option
N)overencumbered property
O)package mortgage
P)payment cap
Q)reverse mortgage
R)sale and leaseback
S)subordination
T)wraparound mortgage 
A) adjustment period 
B) adjustable rate mortgage (ARM) 
C) blanket mortgage 
D) blended-rate loan 
E) buy-down mortgage
F)carryback financing
G)contract for deed
H)equity mortgage
I)equity sharing
J)graduated payment mortgage
K)interest rate cap
L)negative amortization
M)option
N)overencumbered property
O)package mortgage
P)payment cap
Q)reverse mortgage
R)sale and leaseback
S)subordination
T)wraparound mortgage

Question 6

Choose the one most appropriate answer for each.
-to voluntarily give up a higher mortgage priority for a lower one

Accepted Answer

A) adjustment period 
B) adjustable rate mortgage (ARM) 
C) blanket mortgage 
D) blended-rate loan 
E) buy-down mortgage
F)carryback financing
G)contract for deed
H)equity mortgage
I)equity sharing
J)graduated payment mortgage
K)interest rate cap
L)negative amortization
M)option
N)overencumbered property
O)package mortgage
P)payment cap
Q)reverse mortgage
R)sale and leaseback
S)subordination
T)wraparound mortgage 
A) adjustment period 
B) adjustable rate mortgage (ARM) 
C) blanket mortgage 
D) blended-rate loan 
E) buy-down mortgage
F)carryback financing
G)contract for deed
H)equity mortgage
I)equity sharing
J)graduated payment mortgage
K)interest rate cap
L)negative amortization
M)option
N)overencumbered property
O)package mortgage
P)payment cap
Q)reverse mortgage
R)sale and leaseback
S)subordination
T)wraparound mortgage

Question 7

The ____________________ is added to the index rate for the lender's cost of doing business.

Accepted Answer

The answer of The ____________________ is added to the index...

Question 8

FIRREA and the Community Reinvestment Act provided strong incentives for private lenders to engage in affordable housing loans.

Accepted Answer

A) True 
 B)False

Question 9

All of the following may be used for setting ARM interest rates EXCEPT

Accepted Answer

A)  one-year U.S. Treasury securities. 
B)  six-month Treasury bills. 
C)  cost of funds to thrift institutions. 
D)  Gross National Product is not used to set ARM interest rates. 
A)  one-year U.S. Treasury securities. 
B)  six-month Treasury bills. 
C)  cost of funds to thrift institutions. 
D)  Gross National Product is not used to set ARM interest rates.

Question 10

Choose the one most appropriate answer for each.
-the ceiling to which the interest rate on a loan can rise

Accepted Answer

A) adjustment period 
B) adjustable rate mortgage (ARM) 
C) blanket mortgage 
D) blended-rate loan 
E) buy-down mortgage
F)carryback financing
G)contract for deed
H)equity mortgage
I)equity sharing
J)graduated payment mortgage
K)interest rate cap
L)negative amortization
M)option
N)overencumbered property
O)package mortgage
P)payment cap
Q)reverse mortgage
R)sale and leaseback
S)subordination
T)wraparound mortgage 
A) adjustment period 
B) adjustable rate mortgage (ARM) 
C) blanket mortgage 
D) blended-rate loan 
E) buy-down mortgage
F)carryback financing
G)contract for deed
H)equity mortgage
I)equity sharing
J)graduated payment mortgage
K)interest rate cap
L)negative amortization
M)option
N)overencumbered property
O)package mortgage
P)payment cap
Q)reverse mortgage
R)sale and leaseback
S)subordination
T)wraparound mortgage

Question 11

Choose the one most appropriate answer for each.
-a refinanced loan wherein the lender combines the interest rate of the existing loan with a current rate

Accepted Answer

A) adjustment period 
B) adjustable rate mortgage (ARM) 
C) blanket mortgage 
D) blended-rate loan 
E) buy-down mortgage
F)carryback financing
G)contract for deed
H)equity mortgage
I)equity sharing
J)graduated payment mortgage
K)interest rate cap
L)negative amortization
M)option
N)overencumbered property
O)package mortgage
P)payment cap
Q)reverse mortgage
R)sale and leaseback
S)subordination
T)wraparound mortgage 
A) adjustment period 
B) adjustable rate mortgage (ARM) 
C) blanket mortgage 
D) blended-rate loan 
E) buy-down mortgage
F)carryback financing
G)contract for deed
H)equity mortgage
I)equity sharing
J)graduated payment mortgage
K)interest rate cap
L)negative amortization
M)option
N)overencumbered property
O)package mortgage
P)payment cap
Q)reverse mortgage
R)sale and leaseback
S)subordination
T)wraparound mortgage

Question 12

A company wishing to raise capital by selling its real estate but still remaining as the occupant of the property would enter into

Accepted Answer

A)  a sale and lease-back. 
B)  an option agreement. 
C)  an equity mortgage. 
D)  a contract for deed. 
A)  a sale and lease-back. 
B)  an option agreement. 
C)  an equity mortgage. 
D)  a contract for deed.

Question 13

The margin is for the lender's cost of doing business, risk of loss on the loan, and profit.

Accepted Answer

A) True 
 B)False

Question 14

Choose the one most appropriate answer for each.
-a note is accepted by a seller instead of cash

Accepted Answer

A) adjustment period 
B) adjustable rate mortgage (ARM) 
C) blanket mortgage 
D) blended-rate loan 
E) buy-down mortgage
F)carryback financing
G)contract for deed
H)equity mortgage
I)equity sharing
J)graduated payment mortgage
K)interest rate cap
L)negative amortization
M)option
N)overencumbered property
O)package mortgage
P)payment cap
Q)reverse mortgage
R)sale and leaseback
S)subordination
T)wraparound mortgage 
A) adjustment period 
B) adjustable rate mortgage (ARM) 
C) blanket mortgage 
D) blended-rate loan 
E) buy-down mortgage
F)carryback financing
G)contract for deed
H)equity mortgage
I)equity sharing
J)graduated payment mortgage
K)interest rate cap
L)negative amortization
M)option
N)overencumbered property
O)package mortgage
P)payment cap
Q)reverse mortgage
R)sale and leaseback
S)subordination
T)wraparound mortgage

Question 15

Which of the following involves the greatest risk to a lender?

Accepted Answer

A)  First mortgage 
B)  FHA loan 
C)  Construction loan 
D)  VA loan 
A)  First mortgage 
B)  FHA loan 
C)  Construction loan 
D)  VA loan

Question 16

The Asset Integrated Mortgage is designed to create a savings from the down payment and is applicable to borrowers who wish to make minimal down payments.

Accepted Answer

A) True 
 B)False

Question 17

A new home developer who is including appliances with the sale of each house most probably would assist the buyer in obtaining a

Accepted Answer

A)  blanket mortgage. 
B)  shared appreciation mortgage. 
C)  equity sharing mortgage. 
D)  package mortgage. 
A)  blanket mortgage. 
B)  shared appreciation mortgage. 
C)  equity sharing mortgage. 
D)  package mortgage.

Question 18

Choose the one most appropriate answer for each.
-results when monthly interest exceeds monthly payment an the difference is added to the principal

Accepted Answer

A) adjustment period 
B) adjustable rate mortgage (ARM) 
C) blanket mortgage 
D) blended-rate loan 
E) buy-down mortgage
F)carryback financing
G)contract for deed
H)equity mortgage
I)equity sharing
J)graduated payment mortgage
K)interest rate cap
L)negative amortization
M)option
N)overencumbered property
O)package mortgage
P)payment cap
Q)reverse mortgage
R)sale and leaseback
S)subordination
T)wraparound mortgage 
A) adjustment period 
B) adjustable rate mortgage (ARM) 
C) blanket mortgage 
D) blended-rate loan 
E) buy-down mortgage
F)carryback financing
G)contract for deed
H)equity mortgage
I)equity sharing
J)graduated payment mortgage
K)interest rate cap
L)negative amortization
M)option
N)overencumbered property
O)package mortgage
P)payment cap
Q)reverse mortgage
R)sale and leaseback
S)subordination
T)wraparound mortgage

Question 19

Choose the one most appropriate answer for each.
-a situation where the loans against a property exceed the value of the property

Accepted Answer

A) adjustment period 
B) adjustable rate mortgage (ARM) 
C) blanket mortgage 
D) blended-rate loan 
E) buy-down mortgage
F)carryback financing
G)contract for deed
H)equity mortgage
I)equity sharing
J)graduated payment mortgage
K)interest rate cap
L)negative amortization
M)option
N)overencumbered property
O)package mortgage
P)payment cap
Q)reverse mortgage
R)sale and leaseback
S)subordination
T)wraparound mortgage 
A) adjustment period 
B) adjustable rate mortgage (ARM) 
C) blanket mortgage 
D) blended-rate loan 
E) buy-down mortgage
F)carryback financing
G)contract for deed
H)equity mortgage
I)equity sharing
J)graduated payment mortgage
K)interest rate cap
L)negative amortization
M)option
N)overencumbered property
O)package mortgage
P)payment cap
Q)reverse mortgage
R)sale and leaseback
S)subordination
T)wraparound mortgage

Question 20

Choose the one most appropriate answer for each.
-a mortgage repayment plan that allows the borrower to make smaller monthly payments at first and larger ones later

Accepted Answer

A) adjustment period 
B) adjustable rate mortgage (ARM) 
C) blanket mortgage 
D) blended-rate loan 
E) buy-down mortgage
F)carryback financing
G)contract for deed
H)equity mortgage
I)equity sharing
J)graduated payment mortgage
K)interest rate cap
L)negative amortization
M)option
N)overencumbered property
O)package mortgage
P)payment cap
Q)reverse mortgage
R)sale and leaseback
S)subordination
T)wraparound mortgage 
A) adjustment period 
B) adjustable rate mortgage (ARM) 
C) blanket mortgage 
D) blended-rate loan 
E) buy-down mortgage
F)carryback financing
G)contract for deed
H)equity mortgage
I)equity sharing
J)graduated payment mortgage
K)interest rate cap
L)negative amortization
M)option
N)overencumbered property
O)package mortgage
P)payment cap
Q)reverse mortgage
R)sale and leaseback
S)subordination
T)wraparound mortgage

Exam 13: Types of Financing

An overencumbered property would be one with a market value of

Prior to the introduction of adjustable rate mortgages, the FHLBB approved the use of

"Rich uncle " financing is a variation of equity sharing.

In order to make adjustable rate mortgage loans more attractive to borrowers, lenders offer

Choose the one most appropriate answer for each. -a mortgage secured by real and personal property

Choose the one most appropriate answer for each. -to voluntarily give up a higher mortgage priority for a lower one

The ____________________ is added to the index rate for the lender's cost of doing business.

FIRREA and the Community Reinvestment Act provided strong incentives for private lenders to engage in affordable housing loans.

All of the following may be used for setting ARM interest rates EXCEPT

Choose the one most appropriate answer for each. -the ceiling to which the interest rate on a loan can rise

Choose the one most appropriate answer for each. -a refinanced loan wherein the lender combines the interest rate of the existing loan with a current rate

A company wishing to raise capital by selling its real estate but still remaining as the occupant of the property would enter into

The margin is for the lender's cost of doing business, risk of loss on the loan, and profit.

Choose the one most appropriate answer for each. -a note is accepted by a seller instead of cash

Which of the following involves the greatest risk to a lender?

The Asset Integrated Mortgage is designed to create a savings from the down payment and is applicable to borrowers who wish to make minimal down payments.

A new home developer who is including appliances with the sale of each house most probably would assist the buyer in obtaining a

Choose the one most appropriate answer for each. -results when monthly interest exceeds monthly payment an the difference is added to the principal

Choose the one most appropriate answer for each. -a situation where the loans against a property exceed the value of the property

Choose the one most appropriate answer for each. -a mortgage repayment plan that allows the borrower to make smaller monthly payments at first and larger ones later

Nature and Description of Real Estate

Rights and Interests in Land

Forms of Ownership

Transferring Title

Recordation Abstracts and Title Insurance

Contract Law

Real Estate Sales Contracts

Mortgage and Note

Deed of Trust

Lending Practices

The Loan and the Consumer

Sources of Financing

Taxes and Assessments

Title Closing and Escrow

Real Estate Leases

Real Estate Appraisal

Licensing Laws and Professional Affiliation

The Principal-Broker Relationship: Employment

The Principal-Broker Relationship: Agency

Fair Housing, Ada, Equal Credit, and Community Reinvestment

Condominiums, Cooperatives, Puds, and Timeshares

Property Insurance

Land-Use Control

Real Estate and the Economy

Investing in Real Estate

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