Question
1. Sally submits a loan application to Honest Bank. Over the next few days, she has several phone conversations with Honest Bank about the application.
1. Sally submits a loan application to Honest Bank. Over the next few days, she has several phone conversations with Honest Bank about the application. One week after filing her application, she receives a Loan Estimate and a Home Loan Toolkit. Based on RESPA, what has happened?
Honest Bank failed to provide required disclosures within the three-day window
Honest Bank failed to provide required disclosures within the five-day window
Honest Bank fully complied with RESPA by providing disclosures within the seven-day window
Honest Bank cured any RESPA violations by talking with Sally
2. Gretta is reading a loan estimate provided by her lender. She learns that over the life of her loan, she will pay 67% of the borrowed amount as a cost of financing the loan. What does the 67% figure represent?
The interest rate of the loan
The APR or annual percentage rate
The down payment she must pay
The TIP or total interest percentage
2 of 40
3. What is the seller's primary interest at closing?
To sign the deed to the buyer
To get title insurance
To pay off the buyer's loan
To pay everyone who must be paid to close and collect the net proceeds check
4. The amount of interest paid per year is equal to which of the following?
The loan amount divided by the interest rate
The loan amount divided by 360 days
The loan amount multiplied by 360 days
The loan amount multiplied by the interest rate
5. For the Closing Disclosure to be complete and accurate, the seller's total credits and debits must add up to what amount?
Zero dollars
The mortgage amount
The purchase price
The net proceeds
6. Which aspect of buying real property makes title searches so important?
Real property is expensive
Buying property requires paperwork
Sellers can't be trusted
Property boundaries are hard to define
7. What is RESPA's primary mechanism for making sure borrowers make informed decisions?
Disclosure requirements
Lawsuits
Fees and penalties
Regulatory oversight
8. In most real estate transactions, which party makes the closing financially feasible?
The seller
The lender
The title insurer
The buyer
9. Generally, how many land record offices will a title searcher have to visit to search a title?
Three
Two
Depends on the state
One
10. 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?
Lost
Unbroken
Unlocked
Broken
11. What is the primary piece of information the settlement agent must provide on a 1099-S?
The net proceeds of the sale
The gross proceeds of the sale
The taxable proceeds of the sale
The deductions attributable to the sale
12. A buyer asks Polly to conduct a title search on a property. After searching the land records, she finds a warranty deed granting title to the seller, an existing undischarged mortgage deed from the seller, an easement granting a neighbor the permanent right to drive across the property, an easement from an electric company granting the company the right to erect and maintain a line of electric poles crossing the property, and a discharged tax default that the land records show the seller paid in full. Is this title likely to be marketable?
No. The land records show too many other interests involved.
No. The tax default is a deal breaker.
Yes. As long as the seller has a warranty deed, the title is marketable.
Yes. Although local law controls, a reasonable buyer would likely accept this title if the mortgage loan is paid at closing.
12 of 40
13. What does the title system help potential buyers, potential lenders, and the public find out?
When a property will be available for sale
How to reach a seller
Whether a seller is honest
Who has interests in a particular property
14. If the closing is set for September 10th, how many days of collected rent will be credited towards the buyer at closing?
10 days
20 days
0 days
30 days
15. RESPA requires lenders to provide what disclosure within three days of receiving a loan application?
A loan estimate
A money-back guarantee
A warning about unscrupulous lenders
A settlement estimate
16. A property is set to close on August 9th. How many days of interest will the buyer have to pay on their new loan at closing if their first mortgage payment is not due until October1st?
31 days
22 days
9 days
0 days
17. The process by which all the parties to a real estate transaction conclude the details of a sale or mortgage is known as the...?
Commitment
Escrow
Settlement
Closing
18. What does RESPA stand for?
Real Effective Sales Promotion Act
Real Estate Security Procedures Action
Real Estate Settlement Procedures Act
Real Estate Sales Protection Association
19. The seller's outstanding mortgage interest payment will be marked as a .........on the settlement statement.
Prepayment
Debit
Refund
Credit
20. Title which a reasonable purchaser, informed as to the facts and their legal importance and acting with reasonable care, would be willing and ought to accept is known as...?
Executed title
Settled title
Marketable title
Opinion of title
21. The parties have scheduled a closing for a home sale on Tuesday, the day after President's Day. By when must the lender give the borrower a Closing Disclosure?
Saturday
Thursday
Friday
Wednesday
22. What items will the seller's column in the Loan Costs section of the Closing Disclosure usually contain?
The credit report fee
The title search fee
The origination fee
None, usually
23. How many pages is a Closing Disclosure?
One-third of a page
Five pages, as required by RESPA
As many pages as it needs to be
Three pages, as required by RESPA
24. What is the lender's primary interest at closing?
To see that the real estate agent gets paid
To execute the deed
To protect its security interest in the property
To make sure the buyer is protected
25. Which item will the settlement agent most likely adjust to ensure the buyer's side of the Closing Disclosure balances properly?
Cash to Seller
Closing costs
Cash from Buyer
Loan amount
26. Javier buys Tina's house for $325,000. How would we characterize the $325,000 payment from each person's point of view?
A debit for both
A credit for both
A credit for Javier and a debit for Tina
A debit for Javier and a credit for Tina
27. 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?
Coordination
Recalculation
Proration
Estimation
28. Which of the following pays the seller a credit at closing for the remaining days left on their insurance policy?
The buyer
The seller's insurance company
The seller's attorney
The seller will not receive a credit from any party
29. What is the relationship between RESPA and the Closing Disclosure?
RESPA requires the lender to give the buyer the Closing Disclosure
RESPA recommends that lenders use the Closing Disclosure at closings
RESPA requires the seller to give the buyer the Closing Disclosure
RESPA doesn't mention the Closing Disclosure
30. 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?
Title insurer and real estate agent
Settlement agent and seller
Buyer and seller
Buyer and lender
31. Hazard insurance premiums are prorated based on...?
January 1st
the end of the closing month
the date the policy was issued
December 31st
32. From the lender's point of view, which are the most important documents at the closing table?
The settlement statement and the outgoing checks
The deed and the settlement statement
The title insurance policy and the deed
The mortgage and the promissory note
33. Which of the following interests found in a title search is the most likely to affect the marketability of title for a property?
Missing carbon monoxide detectors
A utility easement granted to an electric company
A right to use well water granted to a neighbor
A federal tax lien
34. Hansel is buying a house. The Closing Disclosure indicates the cash needed to close from the buyer is $12,443.76. Hansel comes to closing with a check for $12,343.76. What is the most likely result?
The settlement agent will adjust the Closing Disclosure to reduce the cash from buyer needed to close.
The seller will terminate the deal.
The transaction cannot close unless Hansel brings another $100.
Closing will occur as scheduled. The settlement agent will just issue an IOU for the missing $100.
35. Technically, RESPA applies to all "federally related mortgage loans." As a practical matter, to what does RESPA apply?
Real estate sales involving cash
All real estate transactions
Every real estate transaction involving a mortgage
Most sales of one-to-four family residences
36. If a borrower pays $12,690 in interest annually, how much is paid per diem?
$136.45 (Dollars)
$34.77 (Dollars)
$1,057.50 (Dollars)
$35.25 (Dollars)
36. If a borrower pays $12,690 in interest annually, how much is paid per diem?
$136.45 (Dollars)
$34.77 (Dollars)
$1,057.50 (Dollars)
$35.25 (Dollars)
38. Glenn attends a closing for the sale of a house. Glenn brings a check and a stack of papers to closing. At closing, another person signs all the papers that Glenn brought. Glenn gives the check to the settlement agent. The settlement agent cuts a number of checks. At the end of the closing, Glenn takes back the now-signed stack of papers that he brought to closing. Who is Glenn?
The seller
The lender
The buyer
The real estate agent
39. From the buyer's point of view, which is the most important document at the closing table?
The settlement statement
The title insurance policy
The outgoing checks
The deed
40. Bob the buyer, Sally the Seller, and Morty the Mortgage Lender are at the closing on a house sale. No one else is present or expected to come. Who is most likely to be responsible for filing Form 1099-S?
Bob
None of them
Sally
Morty
Please you do not need to put explanations!!!!!!
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