Rech3 final review

Indiana has several tax exemptions which do not include
the Age 62 and over exemption.
the blind or disabled exemption.
the veterans exemptions.
the property improvements exemptions.

Following is not a recognized type of survey.
Boundary survey
Structure survey
Mortgage survey
Topographic survey

By following certain rules, the licensee will greatly reduce the risk in dealing with fair housing issues. Which of the following is not one of those rules?
Know the law.
Sell the buyer.
Keep good records.
Be consistent in service.

If the managing broker chooses to pay the licensee a salary for the hours worked instead of a commission for one particular real estate transaction, is the licensee an independent contractor or an employee?
Because it's only for one transaction, the licensee is an independent contractor.
The licensee would be considered a temporary employee for the one transaction and would then go back to being an independent contractor.
The licensee would remain an independent contractor.
Because the licensee is paid for the hours worked, he/she would be an employee.

In what type of mortgage can homeowners over age 62 possibly receive monthly payments based on their equity?
Participation mortgage
Piggyback mortgage
Reverse annuity mortgage
Home equity mortgage

Although Fair Housing laws allow for exemptions in some areas, there are absolutely no exemptions, exceptions. Or excuses for
sexual discrimination.
racial discrimination.
religious discrimination.
age discrimination.

To insure that lenders are not "redlining" certain individuals or neighborhoods to exclude them from obtaining a mortgage, what regulation requires financial institutions to report statistical information?
Equal Credit Opportunity Act
Fair Credit Reporting Act
Home Mortgage Disclosure Act
TILA

The characteristics of value do not include
scarcity.
condition.
transferability.
utility.

The property tax assessment and billing cycle begins with
reviewing the previous year's tax assessment.
an appraisal of the property by a licensed appraiser.
the county assessor developing each property's assessed value.
the tax office comparing the previous year's assessment to the current year's assessment.

A(n) ___________ is a form of revolving credit in which the home serves as collateral.
home equity line
revolving line
installment credit
second mortgage

If an investor has a property that generates an NOI of $75,000 with a mortgage expense of $33,000, what is the investor's cash flow before taxes?
$42,000
$108,000
$33,000
$22,000

If assessed values of properties in one county are consistently ten percent below the average for other counties, what may happen?
The properties with the higher assessed values will be given tax exemptions.
Equalization factors may be applied to level out the unevenness of valuations.
The properties with the lower assessed values will pay lower taxes.
Leveling discounts and increases may be applied to both counties to equal out the taxes to be paid.

Which of the following is NOT one of the basic escrow procedures?
Approve the escrow instructions
Order the preliminary title search
Request new loan instructions and documents
Audit the file

Which of the following is not a borrower's right in a real estate loan as identified by HUD?
RIGHT to a credit decision that is not based on your race, color, religion, national origin, sex, marital status, age, or whether any income is from public assistance
RIGHT to know the reason if your loan was turned down
RIGHT to know how much the mortgage broker is getting paid by you and the lender for your loan
RIGHT to an inspection of the property

Assume that a property has a potential rental income of $100,000. Also assume that the vacancy rate for the year resulted in a loss of $5,000. The operating expenses for the year were $23,000. What, then, would the NOI be for the year?
$77,000
$128,000
$72,000
$95,000

The three conditions of the safe harbor test to establish if a person is indeed an independent contractor includes
how long the person has been licensed as a real estate agent.
that the person's gross income must be based on hours worked.
whether the managing broker has filed an IRS Form 1099.
if there is a written agreement between the managing broker and the independent contractor outlining the work to be done and that the contractor will not be treated as an employee for income tax purposes.

The document that establishes legal evidence of the debt incurred is called
a deed.
a mortgage.
a purchase agreement.
a note.

When funds are received, the escrow account journal need not include
the date the funds were received.
the check number from the received funds.
the amount of money received.
the name of the person on whose behalf the funds are delivered.

A financing instrument that creates a lien against a property is
a loan.
a default.
a mortgage.
a deed.

An antitrust law violation occurs when which of these parameters apply to a business activity?
There is a monopoly, a contract, a conspiracy or a combination of such.
The existence of a monopoly or conspiracy creates a restraint of trade.
A restraint of trade unreasonably restricts competition and functions against public interest.
All three must occur for the violation to apply.

A typical real estate cycle follows a similar pattern that does not include
upturn.
downturn.
boost.
slump.

The financial components of a mortgage loan do not include
term.
points.
insurance.
interest.

35
___________ developed the first mortgage-backed security, which was backed by a pool of FHA and VA mortgages and was called a pass-through security because the monthly principal and interest payments were collected from the borrowers and then “passed through” to the investors.
HUD
Ginnie Mae
Freddie Mac
Fannie Mae

A rental space would not typically be unintentionally vacant because
rent is too high.
tenant qualification standards are too strict.
ineffective advertising.
inattentive manager.

Which of the following statements is FALSE?
Unfair regulatory scrutiny is preventing many commercial lenders from taking actions that could avoid defaults even for performing properties.
A covered bond market would not provide additional finance options to borrowers in commercial real estate markets where it might otherwise be limited.
An increased cap on MBL will allow eligible credit unions to stimulate the economy by providing more credit to small businesses.
Improved small business credit availability will stimulate the economy and aid in job growth.

The CAN-SPAM Act does not apply to
sending unauthorized, unwanted commercial email messages to wireless devices.
messages sent to cell phones if the message uses a URL.
messages sent without express prior authorization.
transactional messages between the broker and a client.

Managed properties do not typically include
industrial complexes.
agricultural properties.
office complexes.
condominiums.

A _______ is the percentage used to determine how much a property taxpayer will pay per one hundred dollars of net assessed value.
tax rate
tax levy
tax unit
tax base

Which of the secondary market participants includes the following guideline: A borrower’s monthly debt payments cannot exceed 28% of the monthly income.
Freddie Mac
Fannie Mae
Ginnie Mae
FHA

The following formula is used for what? 3% of the first $25,000 of the acquisition cost, plus 5% of the balance of the acquisition cost up to $125,000, plus 10% of the remainder of the acquisition cost up to the regional loan ceiling, 100% of any acquisition cost over the regional loan ceiling "
Determining the interest rate on an FHA loan
Determining the down payment for a VA loan
Determining the appropriate purchase price for a home being financed through the VA
Determining the minimum down payment for an FHA loan

credit score.
number of creditors reported.
borrower's payment history.
total amount of credit reported.

What does Indiana add as a disability on account of which an individual may not be discriminated against in housing practices?
Illegal drug use
Post traumatic stress disorder
Alcoholism
Hearing impairment

The evaluation process used to determine the borrower's ability to repay a loan and to estimate the value of the property being used as collateral is called
title search.
research.
analysis.
underwriting.

A borrower can get a conventional loan with a lower than 20% down payment by
having a co-signer.
obtaining VA backing.
purchasing private mortgage insurance.
using a savings and loan as the lender.

Which of the following is NOT one of the steps in the appraisal process?
Report the problem and scope of work
Analyze and interpret
Estimate property value
Reconcile estimated values