Q&A Hero

Q: The secondary mortgage market is an area of activity in which a. a borrower may get loans if the primary market cannot accommodate them. b. second mortgages are made. c. existing mortgages are bought, sold and discounted. d. foreclosed properties are bought and sold.

Q: All of the following offer secondary mortgage market programs EXCEPT a. FNMA. b. FDIC. c. FHLMC. d. GNMA.

Q: A lender who continues to collect mortgage payments even after selling the loan is said to be a. originating loans. b. laundering money. c. servicing the loan. d. discounting the loan.

Q: An investor can invest in mortgages by purchasing all EXCEPT a. Ginnie Mae pass-through certificates. b. Freddie Mac participation certificates. c. junior mortgages. d. municipal bonds.

Q: Most mortgage brokers generally a. lend their own funds. b. use money provided by other investors. c. service the loans they make. d. only make loans on large properties.

Q: Which of the following specializes in bringing lenders and borrowers together without lending their own money? a. Insurance companies b. Mortgage bankers c. Mortgage brokers d. Commercial banks

Q: Which of the following specializes in making loans and reselling them? a. FNMA b. Mortgage brokers c. Mortgage bankers d. VA

Q: Lenders who could be described as investing a major portion of their assets in long-term real estate loans, preferring not to service their own loans, and favoring large commercial properties would be a. commercial banks. b. savings and loans. c. mutual savings banks. d. life insurance companies.

Q: Which of the following is most likely to specialize in large, commercial participation loans? a. Mortgage banks b. Savings and loans c. Farmers home loan association d. Life insurance companies

Q: One may find financing for a single family dwelling at all of the following EXCEPT a. savings and loans. b. commercial banks. c. insurance companies. d. mortgage bankers.

Q: With regard to real estate loans, life insurance companies tend to favor a. single family houses. b. interim construction loans. c. large commercial buildings. d. not being involved in real estate.

Q: One of the primary reasons for the decline in loan demand at savings and loan institutions appears to be a. deregulation of the lending industry. b. the poor location of many of the branch offices. c. the high interest rates being charged by commercial banks. d. poor supervision by regulating agencies.

Q: Commercial banks are most likely to deal heavily in a. interim loans. b. 40-year residential loans. c. home improvement loans. d. VA loans.

Q: Commercial banks are most likely to deal heavily in a. house boat loans. b. mobile home purchase loans. c. construction loans. d. residential home loans.

Q: Which of the following supplies money to finance home loans? a. Fannie Mae b. FHA c. VA d. Savings and loans

Q: To whom can a borrower turn for a direct loan for the financing of a single-family dwelling? a. Federal Housing Administration b. Mortgage broker c. Insurance company d. Savings and loan institutions

Q: Which of the following are designed to prevent disintermediation? a. Adjustable rate mortgages b. Secondary mortgage markets c. Pass-through certificates d. Certificates of deposit

Q: Which of the following sources provides the most home mortgage money in the United States? a. Mutual savings banks b. Commercial banks c. Credit unions d. Mortgage companies

Q: From whom would a borrower obtain a VA or FHA loan? a. Approved mortgage lender b. VA or FHA c. Insurance companies d. Sale of bonds

Q: A primary mortgage lender is one who a. lends to FNMA, FHLMC and GNMA. b. pools, insures, guarantees and sells first mortgage loans. c. lends to borrowers, services the loans and perhaps sells the instruments to another. d. lends only for first mortgages and deeds of trust.

Q: Truth in lending laws require a lender to provide figures for all EXCEPT a. loan amount. b. interest rates. c. maintenance costs. d. annual percentage rate.

Q: Which of the following loans would be exempt from the disclosure requirements of the truth-in-lending laws? a. An unsecured personal loan of $3,000 b. An educational loan from a commercial bank c. A second mortgage loan on a residence d. A $30,000 loan for the purchase of a $40,000 automobile

Q: When advertising, a lender must disclose the a. cost of appraisal. b. annual percentage rate. c. closing costs. d. cost of the title search and title insurance.

Q: Which of the following loans would be exempt from the disclosure requirements of the truth-in-lending laws? a. Commercial loans b. Personal property loans in excess of $25,000 c. Financing extended to corporations d. Consumer loans to natural persons

Q: According to regulation Z, which of the following would be allowed without further disclosure in an advertisement to sell a residence? a. Easy 11% mortgage assumption b. Take over an 11% loan c. Assume an 11% annual percentage rate mortgage d. Assumable 11% loan

Q: Regulation Z deals with a. annual percentage rates. b. escrow fees. c. truth-in-lending. d. statue of frauds.

Q: Truth in lending laws were created primarily to protect a. consumers. b. lenders. c. beneficiaries. d. mortgagees.

Q: The Truth in Lending Act covers credit extended for a a. business or commercial transaction. b. large apartment building. c. mobile home which is used as a residence. d. loan secured by a car valued at $30,000.

Q: ____________________ loans have risk-based pricing and rates are not quoted.

Q: If an applicant is purchasing a home as a(n) ____________________, the lender will be more cautious because, during periods of high vacancy, the property may not generate enough income.

Q: In evaluating the borrower's life insurance, the ____________________ is the amount of money the policy holder would receive if the policy were surrendered to the insurance company.

Q: As well as a borrower's assets, the lender will evaluate the borrower's ____________________.

Q: The federal Equal Credit Opportunity Act prohibits discrimination based on age, sex, marital status and ____________________.

Q: The practice of lenders to refuse to make loans in certain areas regardless of the quality of the structure or the borrower's ability to repay the loan is called ____________________.

Q: The borrower's assets that are in cash or readily convertible into cash are called ____________________ assets.

Q: A borrower has a limited right of ____________________ in a credit transaction.

Q: The _________________________ is the total dollar amount the credit will cost the borrower over the life of the loan.

Q: When considering loan applications, lenders like to see good ____________________ records.

Q: The Fair Credit Reporting Act gives individuals the right to correct any errors on their report, inspect their file at a credit bureau and delete any reference to bankruptcy.

Q: The Federal Equal Credit Opportunity Act protects borrowers from discrimination based on sexual preference.

Q: When making a mortgage loan application, borrowers are protected from discrimination based on marital status by the Fair Credit Reporting Act.

Q: In analyzing a mortgage loan application, it is illegal for a lender to consider marital status.

Q: A residential lender would prefer the lowest possible payment to income ratio.

Q: Job stability, income adequacy and credit rating of the borrower are the most important factors that a lender considers in analyzing a loan application.

Q: The borrower's income, the appraisal, and the needs of the borrower are important to a mortgage lender when determining whether or not to make a real estate loan.

Q: Borrower's regular income would be most important to a lender qualifying an individual for a residential mortgage loan.

Q: In analyzing a mortgage loan application, a lender considers job stability, income adequacy and sales price.

Q: When borrowing money to buy a home, the borrower has the right of rescission.

Q: "Buy for less than $600 a month" contains a trigger term under Regulation Z and requires further disclosure.

Q: Under the truth in lending act, the cost of credit extended must be expressed as an actual percentage rate.

Q: With regard to truth in lending laws, "Only $1,000 down payment" is legally permissible to advertise, without further explanation.

Q: Regulation Z requires a lender to disclose the dollar amount of any finance charge.

Q: Truth in lending laws require a lender to provide figures for loan amount, interest rates, and annual percentage rate.

Q: When advertising, a lender must disclose the closing costs.

Q: According to regulation Z, easy 11% mortgage assumption would be allowed without further disclosure in an advertisement to sell a residence.

Q: Regulation Z deals with annual percentage rates.

Q: Truth-in-lending laws were created primarily to protect lenders.

Q: The Truth in Lending Act covers credit extended for a loan secured by a car valued at $30,000.

Q: The APR isa. usually lower than the interest rate.b. made up of the interest rate combined with the other costs of the loan.c. both a and b.d. neither a nor b.

Q: When considering loan applications, lenders like to see a. very little use of credit cards. b. good repayment records. c. derogatory information. d. information at least seven years old.

Q: The Fair Credit Reporting Act gives individuals several rights EXCEPTa. correct any errors on their report.b. inspect their file at a credit bureau.c. delete any reference to bankruptcy.d. make explanatory statements to supplement the file.

Q: The right of individuals to inspect their file at a credit bureau is found in the a. Truth-in-Lending Act. b. Fair Credit Reporting Act. c. Regulation Z. d. Federal Consumer Credit Protection Act.

Q: The Federal Equal Credit Opportunity Act protects borrowers from discrimination based on a. handicap status. b. familial status. c. sexual preference. d. marital status.

Q: A lender can legally discriminate in loan terms based on the applicant's a. religion. b. marital status. c. race or skin color. d. intention to occupy (or not occupy) the mortgaged property.

Q: When making a mortgage loan application, borrowers are protected from discrimination based on marital status by the a. Fair Credit Reporting Act. b. Fair Housing laws. c. Equal Credit Opportunity Act. d. Real Estate Settlement Procedures Act.

Q: Which of the following is given consideration in evaluation of a loan application? a. Race b. Marital status c. Sex d. Income adequacy

Q: In analyzing a mortgage loan application, it is illegal for a lender to consider a. job stability. b. marital status. c. income adequacy. d. credit rating.

Q: Which of the following ratios of monthly payment to monthly income would be preferred by a residential lender? a. 25% b. 55% c. 65% d. 75%

Q: Which of the following do lenders of home loans consider the most important in their analysis of a loan application? a. Age, sex, race, and marital status of the borrower b. Location and age of the collateral c. Job stability, income adequacy and credit rating of the borrower d. Ethnic and business balance of collateral's neighborhood

Q: Generally, before a lender will approve a loan, the borrower must a. have sufficient funds for the down payment. b. sign a statement if the borrower intends to occupy the property. c. both a and b. d. neither a nor b.

Q: All of the following are important to a mortgage lender when determining whether or not to make a real estate loan EXCEPT a. the needs of the borrower. b. the borrower's income. c. the appraisal. d. child support payments.

Q: Which of the following would be most important to a lender qualifying an individual for a residential mortgage loan? a. Borrower's regular income b. Overtime income c. Spouse's part-time income d. Pest and dry rot report

Q: In analyzing a mortgage loan application, a lender considers all EXCEPT a. job stability. b. income adequacy. c. credit rating. d. sales price.

Q: When borrowing money to buy a home, the borrower has the right of rescission a. within three business days, including Saturday. b. within three business days, not counting Saturday. c. within three years. d. at no time.

Q: A borrower does not have the right, under the truth-in-lending laws, to rescind a credit transaction a. for a consumer loan on personal property. b. for the acquisition of the borrower's principal dwelling. c. both a and b. d. neither a nor b.

Q: Which of the following contains a trigger term under Regulation Z and requires further disclosure? a. "Assumable VA loan" b. "Buy for less than $600 a month" c. "Cash price, only $79,500" d. "Rent for only $499 per month"

Q: Under the truth in lending act, the cost of credit extended must be expressed as an a. actual percentage rate. b. approximate percentage rate. c. annual percentage rate. d. average percentage rate.

Q: With regard to truth in lending laws, which of the following is legally permissible to advertise, without further explanation? a. Only $1,000 down payment b. Less than $500 per month c. 11% interest loan d. APR 10% assumable

Q: Penalties for violation of the truth-in-lending laws include a. a fine of up to $5,000 and/or imprisonment for up to 1 year. b. penalties up to twice the amount of the finance charge up to a maximum of $1,000. c. Court costs, attorney fees, and actual damages. d. all of the above.

Q: Regulation Z requires a lender to disclose a. interest charges expressed as dollars and percent. b. dollar amount of any finance charge. c. APR as a dollar amount. d. all charges only as a percent.