1. How do title searchers usually search a title?

By thumbing through all the land records until they find relevant documents

By asking the seller for all the relevant documents

By asking the clerk to find all the relevant documents

By consulting an index of the land records to find relevant documents

2. To find the amount of interest paid per diem, you must divide the annual interest by...?

31 days

365 days

360 days

30 days

3. What does RESPA stand for?

Real Effective Sales Promotion Act

Real Estate Settlement Procedures Act

Real Estate Sales Protection Association

Real Estate Security Procedures Action

4. The Closing Disclosure contains similarities to what other document?

The Loan Estimate

Form 1099-S

The Home Loan Toolkit

The Property Transfer Tax Form

5. Jane is buying a house. Big Bank Company is lending her the money. At the closing, Jane will sign a mortgage granting Big Bank Company the right to foreclose on her property and sell it from under her if she defaults on her loan payments. Why would Jane agree to this provision?

She needs the loan to buy the house

She trusts the bank

She wants to force herself to make her loan payments

She doesn't understand the provision

6. Hazard insurance premiums are prorated based on...?

the date the policy was issued

the end of the closing month

January 1st

December 31st

7. Which item in the land records is least likely to render a title unmarketable?

A missing certificate of habitability

A tax lien

A mortgage

An easement

8. Which of the following must come first at closing?

Paying the real estate agent

Signing the loan documents

Paying the seller

Signing the deed

9. The Closing Disclosure is relatively new. What prior disclosure did it replace?

The HUD-2 Closing Disclosure

The Good Faith Loan Estimate

The HUD Closing Disclosure

The HUD-1 Settlement Statement

10. What items will the seller's column in the Loan Costs section of the Closing Disclosure usually contain?

None, usually

The title search fee

The credit report fee

The origination fee

11. We use a certain method for distributing property costs that are incurred over time but paid at discrete intervals. What is the name of that method?

Recalculation

Proration

Estimation

Coordination

12. At a closing, who is responsible for providing protection against unrecorded conveyances that might challenge the buyer's position as new owner of the property?

The seller

The real estate agent

The settlement agent

The title insurer

13. Omar wants to borrow money to buy a home. He has gathered two Loan Estimates from two lenders. The two estimates have the same terms, except for their APRs and their TIPs. The loan from Honest Bank's has an APR of 4.0% and a TIP of 71.87%. The loan from Fair Bank has an APR of 3.75% and a TIP of 83%. If Omar wants to pay as little as possible over the life of the loan, which loan should Omar choose?

Fair Bank's loan because its APR is the lowest

Honest Bank's loan because its APR is the highest

Honest Bank's loan because its TIP is the lowest

Fair Bank's loan because its TIP is the highest

14. John is looking to purchase a property. The closing is set for April 15th. Assuming the property taxes are paid in December each year, who will receive a credit at closing for the property taxes?

Neither John or the seller

John

The seller

Both John and the seller

15. Which item will the settlement agent most likely adjust to ensure the seller's side of the Closing Disclosure balances properly?

Cash from Buyer

Closing costs

Cash to Seller

Loan amount

16. Technically, RESPA applies to all "federally related mortgage loans." As a practical matter, to what does RESPA apply?

All real estate transactions

Most sales of one-to-four family residences

Real estate sales involving cash

Every real estate transaction involving a mortgage

17. What is a borrower's monthly housing payment if we assume the following: $1,560 in principal and interest, $360 in taxes, and $100 in insurance?

$24,240 (Dollars)

$2,020 (Dollars)

$2,000 (Dollars)

$1,560 (Dollars)

18. Which aspect of buying real property makes title searches so important?

Sellers can't be trusted

Buying property requires paperwork

Property boundaries are hard to define

Real property is expensive

19. For the Closing Disclosure to be complete and accurate, the seller's total credits and debits must add up to what amount?

The purchase price

The mortgage amount

The net proceeds

Zero dollars

20. Which of the following interests found in a title search is the most likely to affect the marketability of title for a property?

A federal tax lien

Missing carbon monoxide detectors

A right to use well water granted to a neighbor

A utility easement granted to an electric company

21. What controls the definition of marketable title in a real estate transaction?

A legal textbook

The dictionary

Local law

Federal law

22. What does the buyer want to make sure the seller can convey?

Title free of any outside interests

Absolute title

Marketable title

Paid title

23. Jilian and Terence are married. They are selling their house. At closing, Sam the settlement agent, prepares a 1099-S that shows gross proceeds of $467,000. Must Sam file the 1099-S?

Sam does not need to file the 1099-S because you don't need to file it unless the taxable proceeds exceed $500,000.

Sam does not need to file the 1099-S if he gets residence certificates from Jilian and Terence.

Sam must file the 1099-S because Jilian and Terence owe taxes on the sale.

Sam must file the 1099-S, even though Jilian and Terrence probably won't pay taxes on the sale.

24. Which form does the IRS require settlement agents to file after closing?

1040EZ

1099-S

1098-S

1099-R

25. What is the buyer's primary interest at closing?

To pay the seller

To sell property

To get a signed deed and marketable title

To pay off a mortgage loan

26. Horace is searching a title for a property belonging to Jones. He has found deeds from Trainer to Eastwood, from Eastwood to Dillinger, from Cuthbert to Trainer, from Smith to Kensington, and from Kensington to Jones. How is the chain of title?

Broken

Unbroken

Lost

Unlocked

27. Which party is least likely to be present at closing?

A lender

A home inspector

A buyer

A settlement agent

28. Which information can you usually find on the fourth page of the Closing Disclosure?

Early repayment policies

Whether the lender will allow someone else to assume the mortgage

Whether the monthly payments will be too low to reduce the principal amount of the loan

All of the answer choices provided are correct

29. A property is set to close on November 21st. If the seller collected $4,600 in rent on November 1st, how much will the buyer be credited at closing?

$154 (Dollars)

$4,600 (Dollars)

$1,380 (Dollars)

$3,220 (Dollars)

30. If you had to boil the IRS rules down to their essence, who is ultimately responsible for filing a 1099-S after closing?

The lender

The person who gathers all the numbers together and distributes the cash at closing

The seller

The person who has the most real estate experience at closing

31. At closing, which must close first: the loan or the property?

The property

The loan

Both simultaneously

It doesn't matter which comes first

32. From the lender's point of view, which are the most important documents at the closing table?

The mortgage and the promissory note

The deed and the settlement statement

The title insurance policy and the deed

The settlement statement and the outgoing checks

33. Janice and Shawn attend a closing. At the closing, Janice and Shawn are interested in making sure the seller's title is marketable, all the loan documents are executed properly, and the seller's loan is paid in full. If Janice and Shawn occupy two different roles, which two are they likely to occupy?

Settlement agent and seller

Buyer and seller

Buyer and lender

Title insurer and real estate agent

34. When it enacted RESPA, what did Congress hope the required lender disclosures would encourage a borrower to do?

To have more faith in the lender and accept the lender's terms

To reconsider borrowing money

To save up until the buyer can afford to pay cash

To shop around and compare loans before committing to one

35. How many days after receiving a loan application must the lender provide a Loan Estimate?

Two days

Three days

Seven days

Four days

36. What does the title system help potential buyers, potential lenders, and the public find out?

Who has interests in a particular property

When a property will be available for sale

Whether a seller is honest

How to reach a seller

37. If there is a dispute over title, the courts begin by presuming that the owner of real property can be determined from what?

The land records

Local knowledge

Testimony

Affidavits

38. The process by which all the parties to a real estate transaction conclude the details of a sale or mortgage is known as the...?

Settlement

Closing

Commitment

Escrow

39. Hector is buying a house from Rita with a closing in May. Settlement Agent Samantha learns that property taxes were paid in September for the upcoming tax-year. How should Samantha treat the taxes on the Closing Disclosure?

Credit the seller and debit the buyer for taxes prorated from closing to the end of the tax year.

Ignore them. No action is required.

Return the tax payment to the seller.

Credit the buyer and debit the seller for taxes prorated from closing to the end of the year.

40. What is the primary purpose of RESPA?

To help buyers with closing details and to understand and compare loans

To punish lenders for discriminatory practices

To make sure all parties at the closing table are treated fairly

To increase the cost of real estate sales