Coverage for additional perils can be obtained by
a. purchasing a separate policy.
b. adding an endorsement to a regular fire insurance policy.
c. both a and b.
d. neither a nor b.
The most important factor in determining whether an item has become a fixture is the
a. method of attachment.
b. agreement of the parties.
c. adaptability of the item.
d. original cost of the item.
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.
Upon payment of the debt secured by a deed of trust, the
a. trustor issues a deed for reconveyance.
b. grant deed is issued to the trustee.
c. trustee issues a release deed for reconveyance.
d. trustor now has equitable title.
The Equal Credit Opportunity Act, as amended, allows for
a. no exceptions wherein a real estate loan is involved.
b. no exceptions on any loans.
c. minor exceptions wherein a real estate loan is involved.
d. coverage of minors in regard to loans.
Which of the following are considered to be legally competent?
a. Corporations
b. Persons of unsound mind
c. Minors
d. A 15 year old woman
When a property is financed by means of a deed of trust, to whom are the payments
made?
a. Beneficiary
b. Trustor
c. Trustee
d. Grantee
An insurance endorsement is also known as
a. a rider.
b. an attachment.
c. an assignment.
d. both a and b.
Who is the trustor in a deed of trust?
a. Borrower
b. Lender
c. Grantor
d. Vendor
A real estate broker had a white couple interested in one of his listings but he inflated
the price in talking to them and they did not make an offer. Later, the broker solicited an
offer from a black couple and induced them to offer less than the listed price. He
submitted this offer for acceptance. Was the broker liable under the federal fair housing
law?
a. Yes, and the white couple could seek judicial recourse
b. Only if he was a black man himself
c. No, because the white couple never actually made an offer
d. No, because a seller has the right to refuse to sell to anyone
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.
The broker has the power to sign documents for the principal. This is probably because
she holds
a. a power of attorney.
b. an agency relationship.
c. special agent status.
d. an attorney-at-law.
Concurrent interests in real property must
a. be recorded.
b. include right of survivorship.
c. include equal interests.
d. include 2 or more people.
How many days are normally needed to close a residential sale that requires no
financing?
a. 1 to 29
b. 30 to 60
c. 61 to 90
d. over 90
The theory of special assessment allocation is that the improvement benefits the
a. land in the district.
b. structures in the county.
c. people in the equalization area.
d. businesses in the district.
The interest rate of a loan from a local savings and loan may be increased or decreased
during the life of the loan. This is an example of
a. a variable interest rate.
b. escalated interest.
c. graduated interest.
d. percentage interest.
Who can sell real property WITHOUT a license?
a. Anyone, as long as they only sell one property per year
b. An attorney, acting within his duties as an attorney
c. Anyone, as long as they do not sell more than $100,000 worth of property in any one
year
d. A judge who is helping out a friend
Mrs. Wallock has a life estate for the duration of her own life. She
a. can devise it.
b. cannot lease it.
c. can sell it.
d. cannot mortgage it.
Without subdivision approval, a buyer of a lot will not be able to get
a. a building permit.
b. an environmental impact study.
c. financing.
d. a final approval.
When there is a space specified along each property line in a neighborhood within
which no building may be erected, it is called
a. a sidewalk.
b. a commercial lot.
c. a setback.
d. an offset.
The relationship of a real estate broker to the owner of property listed for sale with the
broker is a
a. general agency.
b. universal agency.
c. limited agency.
d. special agency.
The best definition of fair market value is the
a. value as determined by a fee appraisal.
b. highest price a seller can get for his property.
c. tax assessed value.
d. price a willing buyer will pay and a willing seller will accept, given a reasonable
amount of time to effect the sale.
If vacancies and collection losses, property taxes, expenses of operation and loan
service are deducted from the gross income, you have
a. internal rate of return.
b. taxable income.
c. net spendable income.
d. net worth.
A seller received $81,000 at the close of escrow after paying $1,750 in closing costs and
a 6% brokerage fee. What was the sales price of the house?
a. $82,750
b. $87,480
c. $89,230
d. $88,032
Which lien would have highest priority?
a. Property tax lien
b. Mechanic’s lien
c. First mortgage or trust deed
d. The lien which is recorded first
Failure to comply with the Equal Credit Opportunity Act can result in
a. civil liability and subsequent penalties.
b. 5% of the creditors net worth in class actions.
c. criminal penalties only.
d. a maximum penalty of $5,000 for each individual case.
Under the terms of a shared appreciation mortgage
a. the loan is made at a below-market interest rate.
b. the lender received a portion of the property’s appreciation.
c. both a and b.
d. neither a nor b.
A four unit quadruplex has rental income of $500 per month per unit. Given a 5%
vacancy rate, operating expenses of $700 per month, and mortgage payments of $1,500
per month, you can anticipate a monthly
a. net spendable of $200.
b. net spendable of $300.
c. negative cash flow of $200.
d. negative cash flow of $300.
The party making an offer is called the
a. offeree.
b. grantee.
c. offeror.
d. agent.
Under a conditional land sales contract,
a. legal title is held by the vendee.
b. equitable title is held by the vendee.
c. legal title is held by a trustee.
d. equitable title is held by a trustee.
Zoning laws may NOT be used to regulate which of the following?
a. The purpose for which a building may be constructed
b. The number of persons a building may accommodate
c. The placement of interior partitions
d. The height and bulk of a building
If a lease were signed by a lessee who is a minor, the lease is
a. void.
b. voidable by the landlord.
c. voidable by the tenant.
d. unenforceable.
A “due on sale” clause
a. may be called a subordination clause.
b. gives the lender the right to call the entire loan balance upon alienation.
c. is the right of a mortgagor to repay a loan.
d. gives the mortgagor the right to sell his property with a loan assumption by the buyer.
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.
Equity mortgages are typically first lien mortgages that are used to tap the increase in
equity resulting from rising home prices and first loan principal reductions.
During the period beginning with the buyer and seller signing the contract and the seller
delivering the deed, the buyer is said to hold “equitable title” to the property.
Once the seller accepts an offer, if the buyer fails to complete the purchase, the seller
may keep the buyer’s deposit as ______________________________.
A strip of land that separates one land use from another is called a
____________________ zone.
One advantage of the escrow closing method is that it can eliminate personal
confrontation between buyer and seller.
If a contract is made under duress, it would be void.
The Federal Reserve Board’s objectives for the American economy include high
employment, stable prices, and steady growth in productive capacity.
A holographic will is a typed or preprinted will.
RESPA prohibits the seller from requiring that the buyer purchase title insurance from a
particular title company.
“That land bounded by Elk Lake and the western boundary of Ware County running
from the lake to the southern boundary of said county” might be considered too vague,
imprecise and subject to change to be a valid legal description.
An alternative to mutual recession is novation.
____________________ loans have risk-based pricing and rates are not quoted.
____________________ are sometimes a source of cash loans for real estate, with the
bulk of these loans between relatives or friends.
Mortgages, judgments and trust deeds are usually recorded however, 6-month leases are
not.
Making statements a reasonable person would recognize as non-factual or extravagant
is known as ____________________.