1. A mezzanine loan functions as collateral for a regular mortgage.

True/False

For Questions 2 and 3: An office property was sold/bought for $435,000, while it was appraised at $425,000. The NOI last year was $31,370. The bank is willing to lend up to 75% LTV. Regardless of the LTV, the borrower decides to borrow $295,000 at an interest rate of 7% on a 25 year term.

2. The maximum loan amount per the underwriting guidelines is $326,250

True/False

3. The DSCR on the actual loan the borrower took out is 1.3 (Note: loan amount is $295000)

True/False

4.When lenders charge points on a loan, what impact does this have on the loan's rate and APR relative to the new rate?

A.The rate on the loan will decrease and the APR will increase.

B.The rate on the loan will increase and the APR will decrease.

C.The rate on the loan will be unaffected.

D.The rate on the loan will be increase and the APR will increase.

5. Let's assume that a $355,000 mortgage has a maturity of 20 years and an interest rate of 5.75% and adjusts after year 3. The margin is 2% and the index is the CMT. The annual cap is 2% and the first year cap is 2% and the lifetime cap is 5%. What is the mortgage payment in year one?

A. $2594.80

B. $2040.77

C. $2492.40

D. $1,984.09

6. In the above scenario, what is the interest rate in year 3 if the CMT index is 6% at the time of the rate adjustment?

A. 8%

B. 7.75%

C. 8.75%

D. 9%

7.A cap in an ARM refers to:

A. The lowest interest rate that a lender can charge.

B. The highest interest rate a lender can charge.

C. The effective rate of return a lender earns.

D. The maximum increase in interest rate in a particular year.

8. Which of the following is not true about a construction loan:

A. It has a higher risk for the lender since the loan is based on future construction.

B. The borrower can decide at any time to convert it to a standard mortgage.

C. It has a shorter length than a standard mortgage.

D. Borrowers have a natural incentive to speed up the construction process in order to convert the floating construction loan to a standard fixed mortgage.

9. The 5 most common positions in the capital stack ranked from the least risky position with lowest return increasing to the riskiest positions with potentially higher returns or losses is:

A. Senior Equity, Junior Debt, Common Equity, Preferred Equity and Mezzanine

B. Senior Debt, Junior Debt, Mezzanine, Preferred Equity and Common Equity.

C. Junior Debt, Senior Debt, Mezzanine, Common Equity and Preferred Equity.

D. Common Equity, Junior Debt, Preferred Debt, Senior Equity and Mezzanine

10.Let's assume that you want to buy a house that is appraised at $372,000 for $373,000. If the bank requires a maximum Loan-to-Value Ratio of 0.75, how much equity do you need to purchase this house?

A. 98,000

B. 95,000

C. 94,000

D. 93,250

11.Given the following information on an FHA 30-year fixed-payment loan, determine the Up Front Mortgage Insurance Premium amount. Purchase price: $400,000. LTV: 97%. Interest Rate: 7%, UFMIP: 1.75%. MMI 1.25%. Monthly Escrow payment of Taxes and Insurance: $350.

A.$7730

B.$7000

C.$6790

D.$5658

13. Given the information in question 11, what would the Monthly Mortgage Insurance payment and TOTAL payment be?

A. $411.24 & $3342.61

B. $565.83 & $3542.38

C. $411.24 & $3387.79

D. $565.83 & $3342.61

14.Let's assume that you are applying for a mortgage in the amount of $380,000 at an interest rate of 7.5%. This is fully amortizing 10/1 ARM.What is the debt service of this mortgage?

A. $2,657.02

B. $2,634.75

C. $4,342.06

D. $4,510.67

15.Given the following information, calculate the interest only payment on this commercial loan. 5/1 I/O ARM, Loan amount: $2,984,000, Interest rate: 4.5%, Term: 30 years. First year, annual and lifetime cap: 5%.Index: LIBOR.Margin: 2.5%

A.$15,119

B.$11,290

C.$11,190

D.$15,190

16.Given the information in question #15, calculate the principal and interest payment in year 6 assuming the LIBOR is at 8% when the rate adjusts and the loan has been paid down by $500,000.

A.$18,226.71

B.$22,722.12

C.$21,702.63

D.$26,071.11

17. Let's assume that a $450,000 monthly mortgage has a debt service of $3,105.78. If the amortization period is 25 years, what is the interest rate on this mortgage?

A. 4.4%

B. 6.6%

C. 6.74%

D. 5.3%

18. Find the APR considering the following scenario: Interest Rate: 4%, Loan amount: $500,000. Term: 30 years. Points: 3

A.4.25%

B. 4.125%

C.4.075%

D. 4.375%

19. Brokers obtain warehouse lines of credit to fund mortgage loans.

True/False

20. In the Mortgage Backed Securitization process loans that are not sold to government entities like FNMA or FHA are either kept in the bank's portfolio or sold to secondary market financial institutions.

True/False