Deck 8: Underwriting and Financing Residential Properties

Question 1

RESPA requires lenders to disclosure to buyers a uniform settlement statement detailing all closing costs within:

A) One day before the real estate closing.
B) Three days before the real estate closing.
C) One day after loan application
D) Three days after loan application.

Answer 1

One day before the real estate closing.

Question 2

FTL and RESPA essentially say the same things.

Answer 2

True

Question 3

A typical RESPA closing statement has which of the following characteristics?

A) 2columns - Summary of borrower's and seller's transactions
B) 2columns - Summary of borrower's and broker's transactions
C) 3columns - Summary of borrower's,seller's,and broker's transactions.
D) 3columns - Summary of borrowers,seller's,and lender's transactions.

Answer 3

2columns - Summary of borrower's and seller's transactions

Question 4

One of the objectives of RESPA was to disclose kickbacks and unearned fees on the settlement sheet.

Question 5

Which of the following is the main objective of FTL legislation?

A) More effective advance disclosure of settlement costs
B) More informative disclosure of the cost of credit
C) Elimination of kickbacks and unearned fees
D) A reduction in the amount of escrow placed in accounts for homeowners

Question 6

What document usually summarizes the sources,disbursements,charges and credits associated with a real estate closing?

A) The purchase contract
B) The deed of trust
C) The listing agreement
D) The settlement statement

Question 7

Title insurance protects the buyer from title claims against the property.

Question 8

The APR estimate must be accurate only to the nearest ______________ percent.

A) 1/2
B) 1/4th
C) 1/8th
D) 1/16th

Question 9

Which typically is NOT one of the settlement costs that are escrowed over the life of the loan?

A) Property taxes
B) Mortgage insurance
C) Selling commissions
D) Hazard insurance

Question 10

Which of the following customarily do NOT attend real estate closing?

A) The buyers and sellers
B) The buyer's and seller's immediate family
C) Real estate broker(s)
D) Settlement agent(s)

Question 11

The calculated APR usually represents the true costs of financing.

Question 12

A residential real estate closing involves two actual closings: the loan closing and the sales transaction closing.

Question 13

RESPA requires lenders to disclose to buyers a good faith estimate of certain closing costs within:

A) One day before the real estate closing.
B) Three days before the real estate closing.
C) One day after loan application.
D) Three days after loan application.

Question 14

Pro-ration involves a professional who rates the quality of the property.

Question 15

RESPA had three specific objectives.Which of the following was NOT one of those objectives?

A) More effective advance disclosure of settlement costs.
B) More informative of the cost of credit.
C) Elimination of kickbacks and unearned fees.
D) A reduction in the amount of escrow placed in accounts for homeowners.

Question 16

Financing costs are usually paid by the lender to either the borrower/buyer or the seller.

Question 17

Which typically is NOT one of the financing costs associated with the financing of real estate?

A) Closing fees
B) Loan application and credit report fees
C) Property inspection and appraisal fees
D) Loan discount and prepaid interest fees

Question 18

RESPA requires a lender to disclose good faith estimates of closing costs within three days of loan application.

Question 19

FTL requires that the lender disclose an estimated cost of financing within three days of loan application.

Question 20

To protect themselves from loss due to default,most lenders require borrowers to acquire hazard insurance policies.

Question 21

A conforming mortgage is one for which the US Treasury will provide credit backing.

Question 22

Someone with a credit score of 900 is likely to only qualify for a subprime loan.