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examples:
Principles Ch11 quiz
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1 of 10 The Lemps have been looking at new homes for weeks and have not found anything worthy of an offer. Mikel, their agent, has invested a large amount of time in showing homes with no luck. Today, he calls Mr. Lemp and says, "I have found you the perfect home! The home is amazing! The yard is perfect and lush. The school district is the best in the state. This home and area are the most prestigious in the city!" Are these types of statements legal?
A. No, this is intentional misrepresentation and cannot be substantiated.
B. Yes, this is legal as long as Mikel does not violate the Federal Fair Housing Laws. These statements are considered “Puffing” in the real estate world. “Puffing” can be unethical if the statements are not true, but it is not illegal.
C. No, this is unintentional misrepresentation. By exaggerating, Mikel is making promises about the property and surrounding areas that are purely subjective.
D. No, this is merely good salesmanship. Describing a home and the surrounding area in glowing terms is just that and nothing more.
2 of 10 Howard wants to purchase a vacation property. He decides to use the expertise of a real estate professional. One of his business associates recommends Jose. Howard explains to Jose that he wants Jose to only represent his purchasing interest, and a contract is signed. Who is the agent? Who is the principal? What is their relationship? What is Jose's role?
A. Jose is the agent; Howard is the principal; they have an agency relationship; Jose is a special agent.
B. Jose is the principal; Howard is the agent; they have a third party relationship; Jose is a broker.
C. Jose is the agent; Howard is the principal; they have a fiduciary relationship; Jose is a special agent.
D. Both A and C
3 of 10 The Marinos are selling their home to the Snyders. Tim is representing both the Marinos and the Snyders in the transaction. He had initially listed the Marinos’ home and realized their home would be perfect for his buyer clients, the Snyders. After making all the necessary disclosures to both parties, he showed the Snyders the Marinos’ home and they are buying it. The Marinos are paying commission on the transaction to Tim's broker, who in turn, will compensate Tim. Since the Marinos are paying Tim's commission, does this constitute an agency relationship, and, if so, what kind of an agency relationship?
A. The fact that one party (the Marinos/sellers) or another party (the Snyders/buyers) pays a commission does not create an agency relationship.
B. Yes, this constitutes an agency relationship. Due to the Marinos' paying the commission, the relationship would be between Tim, a special agent to the Marinos, and the Marinos (sellers).
C. Yes, this constitutes an agency relationship between the Marinos, the Synders and Tim. The payment of commission by the sellers produces a single agency relationship between the parties.
D. None of the above.
4 of 10 Price fixing, group boycotts, bid rigging, market allocation and division of markets by location or price are all examples of ________________ and are punishable by ___________________.
A. Estoppels; suspension of one's license
B. Intentional misrepresentation; fines of up to $10 million for corporations and up to $350,0000 for individuals and/or prison time
C. Antitrust violations; fines of up to $100 million for corporations and up to $1 million for individuals and/or prison time
D. Conversion; prison time and up to $1 million in fines
5 of 10 Perry is listing his home with Extra Real Estate Company, a brokerage. He wants the listing as follows: He must receive $250,000 from the sale of the home, anything above that price is the broker's commission. Which type of listing agreement is Perry demanding?
A. Exclusive Agency
B. Open Listing Agreement
C. Exclusive Right to Sell with Automatic Extender
D. Net Listing
6 of 10 RSS Real Estate Brokerage is the listing broker for the Pratte property. RSS delegates some of the responsibility of the listing to Helpful Real Estate Company. The two brokers cooperate on listings frequently and have a good working relationship. Unfortunately, RSS failed to get the principal's (Pratte's) agreement to the delegation. What is the relationship between RSS Real Estate Brokerage and Helpful Real Estate Company?
A. Helpful Real Estate Company becomes the agent of RSS Real Estate Brokerage due to the appointment without the consent of the principal.
B. Helpful Real Estate Company is now the assigned agent of the listing broker, RSS Real Estate Brokerage.
C. Helpful Real Estate Company becomes the cooperating agent to RSS Real Estate Brokerage's listing broker’s representation of the Pratte property.
D. Helpful Real Estate Company becomes the dual agent to RSS Real Estate Brokerage's listing broker’s representation of the Pratte property.
7 of 10 TBH Realty Company is handling the sale of the Lopez (seller) home to the Bright (buyer) family. The buyers give an earnest money deposit to the brokerage in the amount of $5,000. The money is then deposited into the broker's account at the bank on the seventh business day after receiving the funds. Has TBH Realty Company followed all trust account regulations with the earnest money?
A. Yes, the money was received and deposited into the broker's account by the seventh business day after receiving the funds.
B. No, the broker should have deposited the earnest money into the broker's account within three business days of receiving the funds.
C. No, not only should the broker have deposited the earnest money within three business days of receipt of the funds, the money was to have been deposited into the broker's trust fund not the broker's account.
D. No, the broker should have deposited the earnest money into the broker's trust fund not the broker's account within the seven days allotted after receipt of funds.
8 of 10 Hassan is not happy with the listing agreement on his home through REE Realty Company. He has not been pleased with the showings without notice, the agents showing his home have been rude, and he doesn't feel the property has received the advertising or exposure promised when he signed the listing contract. What is his best option for terminating the listing with REE Realty Company?
A. Hassan could wait for himself or the broker to pass away.
B. Hassan could wait for the expiration of the agreement term to pass.
C. Hassan could speak with the broker and possibly come to a mutual agreement that it is in both parties' best interest to cancel the listing.
D. Hassan could cancel the agreement; however, since it is contractual, the broker could decide to sue for damages.
9 of 10 What is the difference between commingling and conversion? Which, if either, is considered a more serious violation?
A. Commingling is the practice of mixing a client's money with the agent's personal funds. Conversion is the unlawful misappropriation and use of a client's funds by a licensee. Commingling is the more serious of the two violations.
B. Commingling is the unlawful misappropriation and use of a client's funds by a licensee. Conversion is the practice of mixing a client's money with the agent's personal funds. Conversion is the more serious of the two violations.
C. Commingling is the practice of mixing a client's money with the agent's personal funds. Conversion is the unlawful misappropriation and use of a client's funds by a licensee. Neither violation is considered more serious than the other; they both have heavy criminal penalties.
D. Commingling is the practice of mixing a client's money with the agent's personal funds. Conversion is the unlawful misappropriation and use of a client's funds by a licensee. Conversion is the more serious violation.
10 of 10 Scott is trying to sell his home FSBO. The Bartells believe Scott's home could be their dream home, but they have been working with Melinda, a licensee, to find a new home. Melinda shows the Bartells the home, failing to disclose her status as an agent. They love Scott's home and want to buy it. Scott is not interested in any way, shape, or form in working with an agent. However, the Bartells have made an offer above his asking price and he can't refuse it over the Melinda issue. Which of the following describes the creation of this agency relationship?
A. Written or expressed
B. Ostensible Agency
C. Ratification
D. Implied
Principles Ch12 quiz
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1 of 10 Max, a licensee, accepts a bribe from ABC Title Company for referring clients. What is Max's possible punishment?
A. Max could be fined up to $50,000 and up to six months of prison time.
B. Max could be fined a maximum of $10,000.
C. Max could go to prison and/or be fined $10,000 for each illegal transaction.
D. Max may have to pay restitution to those who provided the bribe.
2 of 10 Greg, a licensee, fails to have his client sign off on the purchaser's counteroffer. Greg's client verbally approves the new terms, but Greg failed to obtain his signature. The deadline for signing the counteroffer is in one hour. Greg decides to sign his client's name. Which Penal Code Section addresses this crime, if it is a crime?
A. PC 470, 473
B. PC 532a
C. PC504b
D. It is not a crime.
3 of 10 A corporation is found guilty of charging purchasers advanced fees for securing mortgage loans on homes they have listed. What is the punishment for the violation?
A. A fine up to a maximum of $50,000.
B. A fine up to a maximum of $10,000, with up to six months of prison time, or a combination of both.
C. A restraining order issued against the corporation protecting clients and restitution and/or damages paid.
D. None of the above.
4 of 10 The 1943 case People v. Sipper held what decision?
A. The selection and preparation of a mortgage or deed by a broker, in which a fee was charged, constituted the unlawful practice of law.
B. The real estate agent should guard well the privilege of practicing real estate while avoiding stepping over the line of practicing law.
C. A real estate profession has limited legal authority as a licensee.
D. The real estate licensee could face losing his real estate license for improper behavior.
5 of 10 The Commissioner discovers in an audit commingling of trust accounts by a licensee. At what amount does the court issue a restraining order against the licensee?
A. In excess of $50,000
B. In excess of $100,000
C. In excess of $30,000
D. In excess of $10,000
6 of 10 The Real Estate Commissioner has the authority to perform all of the following actions except:
A. Hold formal hearings to decide issues involving a licensee or licensee applicant.
B. Hold interest in a real estate company or brokerage firm.
C. Regulate and control the issuance and revocation of all licenses issued under California law.
D. Adopt, amend, or repeal rules and regulations for the enforcement of the laws.
7 of 10 Jason has approached Sam about purchasing an acre of property that adjoins Jason's backyard. Sam has explained to Jason on numerous occasions that he is not interested in selling. Jason has resorted to telling Sam if he doesn't sell the land, he'll contact the authorities and accuse him of dealing drugs out of his home. Which Penal Code Section addresses this crime?
A. PC 502.5
B. PC 518, 519
C. PC 532a
D. PC 484b-c
8 of 10 Jeremy, a licensee, witnesses Patti, another licensee, involved in behavior that is questionable. Jeremy learns Patti's client is also willfully involved in the indiscretions. What action, if any, should Jeremy take?
A. Jeremy need not take any action. As long as he is not involved in the questionable behavior, he is not obligated to do a thing.
B. Jeremy is obligated to speak to the authorities and report what he has witnessed. If he is unsure a crime has been committed, he should obtain legal advice.
C. Jeremy must report all indiscretions to the Department of Real Estate. He is not obligated to report the client's behavior.
D. None of the above.
9 of 10 ABC Mortgage Company accepts a bribe from a licensee in exchange for approving mortgages for all of his clients. Which Penal Code Section addresses this crime?
A. PC 556-556.2
B. PC 639-639a
C. PC 830.1
D. It is not a crime.
10 of 10 The designation "grand theft" is used in relation to the theft of:
A. Certain farm crops or animals, personal and real property with value of less than $950.
B. Automobiles and other personal property valued over $950.
C. Money, labor, real and personal property that exceeds a value of $950.
D. Both B and C
Principles Ch13 quiz
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1 of 10 Jonathan is in the process of refinancing his home loan. Due to the lowering of interest rates and Jonathan's credit score improvement, he has been able to secure a conventional loan with an excellent annual percentage rate. Unfortunately, his current loan contract contains a stipulation that if he repays the loan before three years, he will owe the lender a fee of two percent of the loan balance. Which clause applies to Jonathan's situation?
A. Subordination Clause
B. Subrogation
C. Prepayment Penalty Clause
D. Alienation Clause
2 of 10 Renata has a home loan for $150,000 at 7.5% interest for 30 years and her payment is $987.00 per month (including principal and interest). What is the principal balance after Renata has made one payment on her loan? After two payments?
A. $148,950.50, $148,900.70
B. $149,950.50, $149,900.70
C. $149,990.50, $149,980.20
D. $149,920.50, $149,873.80
3 of 10 The Logans are in their seventies with a very nice home. They paid off their mortgage twenty-five years ago. Mrs. Logan has been having serious medical issues and Mr. Logan wants to hire home healthcare professionals to care for her. His retirement savings will not withstand these healthcare costs. He has turned to his home to supplement his monthly income in order to keep his wife at home. Which type of loan applies to the Logan's situation?
A. Package Mortgage
B. Wraparound
C. Buydown
D. Reverse Annuity
4 of 10 What are the major differences between a mortgage and a deed of trust?
A. The amount of interest that may be charged and the method of foreclosure on default.
B. The number of parties involved and the method of foreclosure on default.
C. The collaterized form of the loan and the method of foreclosure on default.
D. None of the above.
5 of 10 Jerilyn has been approved for a home loan in the amount of $250,000 with two points. If one point equals one percent (1%) of the loan balance, what will the points cost Jerilyn? How are the points shown at closing?
A. $5,000 - The points are shown as a debit to the buyer.
B. $10,000 - The points are shown as a debit to the buyer.
C. $5,000 - The points are shown as a credit to the buyer.
D. $500 - The points are shown as a debit to the buyer.
6 of 10 David has been laid off from his job. Carey, his spouse, only works part time and has been trying to pick up extra shifts. They have missed their third home loan payment this month. Their lender has called the entire balance due and payable immediately. Which clause applies to their situation?
A. Alienation Clause
B. Acceleration Clause
C. Satisfaction of Mortgage Clause
D. Satisfaction Clause
7 of 10 Naomi has a home loan amount of $120,000. Her monthly principal and interest payment is $679.00 for thirty years. How much interest will Naomi pay over the term of her loan?
A. $244,440
B. $224,440
C. $124,440
D. $144,440
8 of 10 Sumatra has had a terrible year. He lost his business and now he has lost his home in foreclosure. The proceeds from the foreclosure sale were not sufficient to cover his debt, and NOW the lender has taken him to court to obtain more money. Which of the following applies to Sumatra's situation?
A. Deficiency Judgment
B. Deed in Lieu of Foreclosure
C. Equitable Right of Redemption
D. Non-Judicial Foreclosure Judgment
9 of 10 If a conventional loan is at 16% and the VA loan is at 15%, the lender will want to charge how many points to increase the yield on investment?
A. Six Points
B. Eight Points
C. Four Points
D. Two Points
10 of 10 Put the following foreclosure actions in order:
A. Equitable Right of Redemption, Statutory Redemption, and Foreclosure
B. Statutory Redemption, Equitable Right of Redemption, and Foreclosure
C. Equitable Right of Redemption, Foreclosure, and Statutory Redemption
D. Statutory Redemption, Foreclosure, and Equitable Right of Redemption
Principles Ch14 quiz
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1 of 10 Which of the major warehousing agencies in the Secondary Market are not regulated by a government agency?
A. Federal National Mortgage Association (Fannie Mae)
B. Government National Mortgage Association (Ginnie Mae)
C. Federal Home Loan Mortgage Corporation (Freddie Mac)
D. None of the Above
2 of 10 Bruce, a private in the US Army, has applied for his Certificate of Eligibility and been approved. He wants to purchase a condo for himself. What's the maximum amount lenders will loan Bruce, based on his veteran status?
A. A veteran's basic entitlement is $100,000. Lenders generally lend up to four times the available entitlement without a down payment. There is no maximum amount, but generally lenders limit VA loans to $400,000.
B. A veteran's basic entitlement is $104,250. Lenders generally lend up to four times the available entitlement without a down payment. There is no maximum amount, but generally lenders limit VA loans to $417,000.
C. A veteran's basic entitlement is $104,250. Lenders generally lend up to four times the available entitlement without a down payment. There is no maximum amount, but generally lenders limit VA loans to $425,000.
D. A veteran's basic entitlement is $104,250. Lenders generally lend up to four times the available entitlement without a down payment. There is no maximum amount, but generally lenders limit VA loans to $550,000.
3 of 10 Gerald, a sergeant in the Marine Corps, is getting married and wants to purchase a home. How does he begin the process of getting a VA loan? What follows?
A. Gerald must have the home appraised and be issued a Certificate of Reasonable Value. He then must apply for the loan through the financial institution of his choice.
B. Gerald must first apply for a Certificate of Eligibility to obtain a VA loan. The home must qualify with an appraisal and be issued a Certificate of Reasonable Value.
C. Gerald only need to fill out the necessary paperwork through the Veteran's Administration Office in his area.
D. None of the Above
4 of 10 What is the major difference between a VA Loan and a FHA Loan?
A. FHA insures repayment of the loan; VA guarantees repayment of the loan.
B. FHA guarantees repayment of the loan; VA insures repayment of the loan.
C. FHA lends the money for the actual loan; VA guarantees repayment of the loan.
D. FHA insures repayment of the loan; VA lends the money for the actual loan.
5 of 10 At the present time, funds are limited for CalVet Program mortgage loans. A decision must be made to give one veteran a loan over another. Veteran A has been in the military service for 20 years and is a four-time decorated hero. He wants to buy an Oregon farm with the loan. Veteran B has been in the military four years. He lost his right leg in a battle in Afghanistan. He wants to buy a small home in Las Vegas for himself and his mother, who will live with him. Which veteran will they choose and why?
A. Veteran A will be chosen based on his years of service, his decoration, and his desire to buy a farm.
B. Veteran A will be chosen because he is still on active duty; Veteran B has received a discharge from service, making him less desirable for the program's loan.
C. Veteran B will be chosen because his family members will take priority due to his injury.
D. Neither will be chosen for the loan because both are planning on buying homes outside the state.
6 of 10 Which of the following are functions of the Federal Reserve?
A. Buying/Selling of Securities and Discount Rates
B. Participation Financing
C. Debt Coverage
D. Oversees Lending Laws
7 of 10 Jeanne and Mark are buying a home. They've been told their mortgage payment will be $1,072 per month. There's also an additional amount of $335.62 being added to the monthly payment, bringing their total to $1,407.62. It was explained the additional $335.62 is to cover insurance and property taxes. Which loan definition applies?
A. Estoppel
B. Disintermediation
C. Impounds
D. In Contract
8 of 10 Conchita is applying for a VA loan. She has served in the military, on active service, for ninety days. She is trying to buy a town home near her base for easier commuting. The town home has qualified with an appraisal and has been issued a Certificate of Reasonable Value. Will Conchita be considered for a VA loan?
A. Yes, she has met all of the criteria for a Certificate of Eligibility.
B. No, she has not served the 181 days of active service required.
C. No, she has not been approved for a Certificate of Eligibility.
D. None of the Above
9 of 10 MTH Bank has given the McKelvey's a written pledge to lend $250,000 on a new construction home, for 30 years, at 6.53%. The McKelvey's will now present this pledge to the subdivision's sales agent to continue with their new home's construction. Which loan definition applies?
A. Conditional Approval
B. Underwriting
C. Exculpatory Clause
D. Non-Recourse Clause
10 of 10 Jan is moving into a new home. Her husband recently died during military service in the Middle East. She cannot afford a very large down payment at this time, but wants to get her children into their first home to provide some stability after the loss of their father. What are Jan's options?
A. Jan qualifies for an FHA loan, if her income is adequate. There is usually a small down payment required.
B. Jan qualifies for a VA loan due to her status as a veteran's unmarried widow. The VA loan does not require a down payment.
C. Jan cannot qualify for both types of loans.
D. Both A and B
Principles Ch15 quiz
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1 of 10 A first-time buyer has applied for a large mortgage loan at ABC Bank. The first-timer has good credit, good debt-to-income ratio, a stable position and adequate income. The lender still has concerns. Which of the following is not one of the lender's concerns?
A. The current and future value of the property.
B. The attractiveness of other investments that could be made for a better return.
C. The income and income potential of the loan applicant.
D. The loan applicant's need of financial assistance.
2 of 10 Patrice and Jacque have secured a mortgage loan. They must provide at least a 20% down payment, but are not required to have a government guarantee or private mortgage insurance. What type of mortgage loan have they obtained?
A. A Conventional Insured Loan
B. An Exchange
C. Conventional Loan
D. Syndicate Financing
3 of 10 Why are sales contracts no longer a popular financing instrument in California?
A. It is very difficult for the seller to remove a buyer that is in default.
B. The buyer is at risk because he holds no immediate title to the property.
C. Court battles involving both the seller and buyer could be lengthy and costly.
D. All of the Above
4 of 10 Why would a Contract for Deed (Installment Sale Contract) be attractive to certain buyers?
A. Buyers who cannot come up with a down payment may lease to own for a period of time, usually five years.
B. Buyers who can only make a small down payment with monthly installments. Usually they must meet certain conditions and the contract does not require conveyance within six months.
C. Buyers who can only make a small down payment with monthly installments. Usually they must meet certain conditions, and the Contract for Deed does not require conveyance (transfer) within the same year.
D. Buyers have the title conveyed to them, usually after two years, when certain conditions are met and monthly installments are made toward the down payment.
5 of 10 Gordon makes a trip to his financial institution one morning. He has conducted all of his banking transactions at the institution for more than twenty years. Today he walks out with a loan on his new home and one for a new boat. What method of financing has Gordon secured?
A. Exchange
B. Commercial
C. Conforming loan
D. Bonds or Stocks
6 of 10 Who benefits from a long-term lease?
A. The tenant - 100% of rent is deductible as an expense.
B. The landlord - The property is leased for a long period of time, guaranteeing a return on investment.
C. The tenant - The total debt load of the tenant remains the same.
D. Both A and C
7 of 10 Jack owns a small home near a school. He doesn't have any children, and doesn't plan on having any in the future. Jack is a writer and works out of his home. All of the noise from the playground during the day interrupts Jack while he is trying to work. Tina, a friend of Jack's, also owns a small home. Her home is in a quiet, little secluded neighborhood. She has a child that will be entering first grade in the fall and wishes she lived closer to a school. One day, Jack asked Tina if she would want to exchange homes. Is this a possibility?
A. Yes, a trade of properties (Exchange) is possible if the trade involves no financing and the properties are not mortgaged.
B. Yes, a trade of properties (Exchange) is possible if the trade involves no financing.
C. No, it is not a possibility. Simply "trading" real estate is not recognized under California Real Estate Law.
D. None of the Above
8 of 10 What category of investors sees Syndicate Equity Financing as a good opportunity?
A. Consumers with damaged credit.
B. Consumers with more than one home loan.
C. Small investors.
D. Borrowers who have previously declared bankruptcy.
9 of 10 Tyoka has a small retail store in San Diego. He sells imported items such as clothing, arts, and crafts. He has recently sold the store to a group of investors. In the arrangement with the investors, Tyoka now leases his former store from the new investors. What type of financing applies to Tyoka's new arrangement?
A. Exchange
B. Long-Term Lease
C. Sale-Leaseback
D. Straight Lease
10 of 10 Who is the largest private mortgage insurer?
A. Mortgage Guarantee Insurance Corporation
B. Fannie Mae
C. Freddie Mac
D. VA
Principles Ch16 quiz
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1 of 10 Sam is selling one of his rental homes. His advertisement reads: "For Sale By Owner - Owner Will Finance - No Down Payment!" What are the criteria for being considered a creditor under Truth in Lending?
A. A lender must lend funds 25 times a year and/or must lend the funds for at least five housing loans annually.
B. A lender must lend funds five times a year and/or must lend the funds for at least 25 housing loans annually.
C. A lender must lend funds 20 times a year and/or must lend the funds for at least five housing loans annually.
D. Every lender is considered a Truth in Lending creditor and must follow all of the law's regulations.
2 of 10 What are the steps set forth for a real property securities dealer? Which Article do the regulations fall under?
A. Obtaining a Commissioner's Permit; an RPSD endorsement on a broker license; and proof of a $10,000 surety bond. The regulations fall under Article 6.
B. Obtaining a Commissioner's Permit and proof of a $10,000 surety bond. The regulations fall under Article 5.
C. Obtaining a Commissioner's Permit; an RPSD endorsement on a broker license; and proof of a $10,000 surety bond. The regulations fall under Article 4.
D. None of the Above
3 of 10 Lily, a licensee, has been referring her first-time home buyers to Safe Insurance Company for all of their insurance needs. The insurance company has been providing Lily with "motivation" in the form of cash to keep the referrals coming. Which law or act prohibits this type of violation?
A. Fair Lending Laws
B. RESPA
C. Equal Credit Opportunity Act
D. Both A and C
4 of 10 Jacinda makes collections on real estate loans. Last year, she made approximately 20 collections and collected $38,000. Must Jacinda be licensed?
A. Yes, if a collector makes more than ten annual collections, or collects more than $40,000, he/she must be licensed as a California real estate broker.
B. No, if a collector makes more than forty annual collections, or collects more than $10,000, he/she must be licensed as a California real estate broker.
C. Yes, if a collector makes more than fifteen annual collections, or collects more than $40,000, he/she must be licensed as a California real estate broker.
D. Yes, if a collector makes more than twenty annual collections, or collects more than $30,000, he/she must be licensed as a California real estate broker.
5 of 10 What is the true purpose of Truth in Lending Law?
A. Closing Costs
B. Controlling Interest Rates
C. Disclosure
D. APR
6 of 10 Beverly, an African-American woman, has applied for a mortgage on a new home. She has a reliable job as a court reporter and has been employed for ten years. Her income is substantial enough to pay a mortgage, in her budget, and still have seventy percent of her income remaining. She has, however, been at least ninety days late on several bills one year ago. Beverly has since caught up on her credit card bills, paid them on time, and reduced their balances by half. She has just been turned down for a mortgage by her bank. Has she been discriminated against?
A. Perhaps. She may have been turned down because she is an African -American woman. She has a steady job with a decent income. Her small brush with delinquency should not have led to a refusal.
B. No. Beverly's brush with delinquency is too fresh on her record for the bank to issue a mortgage. Although she has taken the steps to correct the issues, ninety days late on several debts is substantial. She more than likely did not meet the bank's financial requirements.
C. No. Beverly's income must not be substantial enough for the home she is wanting to buy.
D. None of the Above
7 of 10 Jim and Kim Scott have been working very hard to rebuild their credit. They are now in good financial shape to buy their first home. The couple has been working with a mortgage broker, Ted, to assist them in finding the best loan. They complete the application, are approved for a loan, complete other paperwork, and are now obligated to complete the loan. A week before they are due to close, they receive the Mortgage Disclosure Statement, outlining all of the costs and terms associated with the loan. The costs and terms are not what they had previously understood. Are they stuck with this loan?
A. Yes, they have had several opportunities to fully question and understand the terms and costs associated with their loan.
B. No, the Mortgage Disclosure Statement should have been presented to them within three days of the broker's receipt of their written loan application, or before the Scotts were obligated to take the loan.
C. No, the Mortgage Disclosure Statement should have been presented to them within seven days of the broker's receipt of their written loan application, or before the Scotts were obligated to take the loan.
D. Yes, unfortunately they are stuck with the loan. It was the Scotts' responsibility to ask for the Mortgage Disclosure Statement so they were clear on the terms and costs associated with the loan.
8 of 10 Deanna is thinking of taking the step from renter to homeowner. She has a very stable position as a surgical nurse and excellent credit. She doesn't, however, have a large sum of cash handy for the down payment. One Sunday morning, she notices advertising for new condos where "no down payment is required." Should she look for any other information in the ad?
A. No, the "no down payment required" gives her the initial information to peak her interest and take a look at the condos. After taking a look at the property, they can fill her in on all the details.
B. Yes, she should make sure the amount or percentage of down payment is there; annual percentage rate and if an increase is possible; total finance charge; and total number of payments and due dates.
C. Yes, she should make sure the amount or percentage of down payment is there; terms of repayment; annual percentage rate and if an increase is possible; total finance charge; and total number of payments and due dates.
D. Yes, she should make sure the amount or percentage of down payment is there; terms of repayment; annual percentage rate and if an increase is possible; and total number of payments and due dates.
9 of 10 Under Article 7, what is the maximum amount that may be charged to the borrower for loan costs and expenses? Also, under Article 7, if the home is not occupied by the owner, under what circumstance is the loan exempt from a balloon payment?
A. The maximum amount that may be charged to the borrower for loan costs and expenses is 5% of the loan, or $490.00, to a maximum of $800.00. If the loan term is less than three years, and the home is not occupied by the owner, the loan is exempt from balloon payments.
B. The maximum amount that may be charged to the borrower for loan costs and expenses is 3% of the loan, or $390.00, to a maximum of $700.00. If the loan term is less than three years, and the home is not occupied by the owner, the loan is exempt from balloon payments.
C. The maximum amount that may be charged to the borrower for loan costs and expenses is 5% of the loan, or $390.00, to a maximum of $700.00. If the loan term is less than three years, and the home is not occupied by the owner, the loan is exempt from balloon payments.
D. The maximum amount that may be charged to the borrower for loan costs and expenses is 5% of the loan, or $390.00, to a maximum of $700.00. If the loan term is six or more years, and the home is not occupied by the owner, the loan is exempt from balloon payments.
10 of 10 What is included in the APR?
A. The total cost of the loan including: the finance charge, all legal fees, survey fees, recording fees, broker's fees, and title insurance premiums.
B. The total finance charge to the total amount to be financed.
C. The total finance charge (including a computation of unearned finance charges) to the total amount to be financed.
D. None of the Above
Principles Ch17 quiz
(correct answers will be revealed with correct subscription)
1 of 10 Marita and Alexandra set up a Limited Partnership. Marita is named General Partner and Alexandra is named Limited Partner. Marita embezzles funds from the investors. Is Alexandra liable for Marita's indiscretion?
A. Alexandra is only liable if she is named as a general partner in the certificate or if she participates in control of the business.
B. Alexandra is as liable to the investors as Marita. However, unless she was involved in the crime, she is only financially liable.
C. Alexandra is liable and a partner, whether it be a general or limited partner.
D. Both B and C
2 of 10 Alexandra and Marita have formed a REIT. They have their investors and resources and are ready for business. The REIT will be investing in an assorted portfolio of real estate and mortgage investments. What type of REIT have Alexandra and Marita formed?
A. An Equity Trust
B. A Mortgage Trust
C. A Combination Trust
D. A Joint Venture Trust
3 of 10 This is the most frequently used organizational form for real estate syndicates. Which form fits the description?
A. The General Partnership or Joint Venture
B. The Corporate Form
C. The Limited Partnership
D. The Combination
4 of 10 This form of syndication allows limited liability for the investors but has negative tax features. Which form fits the description?
A. The General Partnership
B. The Joint Venture
C. The Limited Liability Company
D. The Corporate Form
5 of 10 Alexandra and Marita's company has qualified as a trust. It has distributed 96% of its income to its shareholders. Which earnings require the payment of federal taxes?
A. The company only pays federal taxes on the retained earnings.
B. The company only pays federal taxes on the retained earnings, which are taxed at corporate rates.
C. The company only pays federal taxes on the distribution to its shareholders.
D. The company is exempt from federal taxes due to its trust qualification. It is required only to pay state and local taxes.
6 of 10 A small group of investors are in the initial stages of putting together a real estate investment trust (REIT). Which of the following is not a qualification?
A. A REIT must be beneficially owned by at least 100 investors.
B. The company must distribute at least 85% or more of its income to its shareholders.
C. Each share of certificate of interest must carry with it an equivalent vote.
D. No five, or fewer, persons may hold more than 50 percent of the beneficial interests.
7 of 10 Marita tells Alexandra they must obtain their broker-dealer license from the Department of Corporations to engage in the sale of real estate syndicate security interests. Alexandra disagrees with Marita, explaining they both have their broker licenses and that is sufficient. Who is correct and why?
A. Marita is correct. Section 15632 was added to The Real Estate Syndicate Act requiring real estate brokers to obtain a broker-dealer license.
B. Alexandra is correct. Section 25206 was added to the Corporations Code making obtaining a broker-dealer license optional.
C. Marita is correct. Section 25206 has an added provision dealing with brokers violating the Corporations Code and requiring the broker-dealer license.
D. None of the above
8 of 10 What is the correct order of regulatory agency jurisdiction changes to non-corporate California real estate syndicates since The Real Estate Syndicate Act's inception in 1970?
A. The Department of Corporations, The California Department of Real Estate, The Department of Corporations
B. The California Department of Real Estate, The Department of Corporations, Real Estate Commissioner
C. Real Estate Commissioner, The California Department of Real Estate, The Department of Corrections
D. Real Estate Commissioner, The California Department of Real Estate, The Department of Corporations
9 of 10 This form of syndication avoids double taxation but has a lack of centralized management. Which form fits the description?
A. The Corporate
B. The General Partnership
C. The Joint Venture
D. Both B and C
10 of 10 Alexandra and Marita are forming a real estate syndicate. They have their initial investments and are ready to proceed. What happens next?
A. Operation, Origination, Completion or Liquidation
B.