Real Estate 87 Economics Final Exam
Question 1
. Compared to a 30-year loan, a 15-year loan usually has:
B. a lower interest rate and a larger monthly payment
Question 2
What federal law requires lenders to disclose information that would help detect
instances of redlining?
C. Home Mortgage Disclosure Act
Question 3
Which of these types of income is least likely to be counted as part of a loan applicant's
stable monthly income?
B. Unemployment compensation
Question 4
A bridge loan, also called a swing or gap loan, is used to:
C. provide funds to close the purchase of a new home before the buyer's old home has
been sold
Question 5
Which federal law applies to all credit transactions and prohibits discrimination against
loan applicants?
,Correct!
A. Equal Credit Opportunity Act
Question 6
A biweekly mortgage:
Correct!
D. involves 26 half-sized payments per year instead of the 12 standard payments
Question 7
The most common alternative private source of lending to buyers is:
C. sellers
Question 8
The lender issues a certificate of reduction to:
A. acknowledge the transfer of title and waive the due-on-sale clause
B. state the balance of the loan without changing the terms of the loan
D. Both A and B
Question 9
After Fannie Mae and Freddie Mac started buying _____ loans in the mid-2000s, this
type of loan became much more popular, increasing from just a few percent of all new
mortgage loans in 1994 to as much as 20% of new loans in 2006 (when the housing
bubble began to burst).
, D. subprime
Question 10
A one-year ARM has a 60-day lookback period. Up until the last month of the rate
adjustment period, interest rates had risen 0.25%. During the last month of the
adjustment period, rates rose 0.50%. How much may the lender raise the interest rate
on the loan?
Correct!
D. 0.25%
Question 11
In certain cases, if the proceeds of a sheriff's sale aren't sufficient to pay off the
foreclosed mortgage, the lender may sue the borrower for the remainder owed. If the
court rules in the lender's favor, it will grant the lender:
C. a deficiency judgment
Question 12
Which of the following is true of Fannie Mae, Freddie Mac, and Ginnie Mae?
C. They all issue and/or guarantee mortgage-backed securities that are sold to
investors
Question 13
An ARM's margin is:
B. the difference between the index rate and the interest rate charged
Question 1
. Compared to a 30-year loan, a 15-year loan usually has:
B. a lower interest rate and a larger monthly payment
Question 2
What federal law requires lenders to disclose information that would help detect
instances of redlining?
C. Home Mortgage Disclosure Act
Question 3
Which of these types of income is least likely to be counted as part of a loan applicant's
stable monthly income?
B. Unemployment compensation
Question 4
A bridge loan, also called a swing or gap loan, is used to:
C. provide funds to close the purchase of a new home before the buyer's old home has
been sold
Question 5
Which federal law applies to all credit transactions and prohibits discrimination against
loan applicants?
,Correct!
A. Equal Credit Opportunity Act
Question 6
A biweekly mortgage:
Correct!
D. involves 26 half-sized payments per year instead of the 12 standard payments
Question 7
The most common alternative private source of lending to buyers is:
C. sellers
Question 8
The lender issues a certificate of reduction to:
A. acknowledge the transfer of title and waive the due-on-sale clause
B. state the balance of the loan without changing the terms of the loan
D. Both A and B
Question 9
After Fannie Mae and Freddie Mac started buying _____ loans in the mid-2000s, this
type of loan became much more popular, increasing from just a few percent of all new
mortgage loans in 1994 to as much as 20% of new loans in 2006 (when the housing
bubble began to burst).
, D. subprime
Question 10
A one-year ARM has a 60-day lookback period. Up until the last month of the rate
adjustment period, interest rates had risen 0.25%. During the last month of the
adjustment period, rates rose 0.50%. How much may the lender raise the interest rate
on the loan?
Correct!
D. 0.25%
Question 11
In certain cases, if the proceeds of a sheriff's sale aren't sufficient to pay off the
foreclosed mortgage, the lender may sue the borrower for the remainder owed. If the
court rules in the lender's favor, it will grant the lender:
C. a deficiency judgment
Question 12
Which of the following is true of Fannie Mae, Freddie Mac, and Ginnie Mae?
C. They all issue and/or guarantee mortgage-backed securities that are sold to
investors
Question 13
An ARM's margin is:
B. the difference between the index rate and the interest rate charged
