Re Econ Question 1-10

1. Ifthe Federal Reserve Bank has an expansionary monetaryr policy to help a U.S. economyr that is in a deep recession and it' you see most economic indicators like the Unemployment Rate, Leading Index of Economic Indicators, the Manufacturing Survey, Consumer Sentiment, and the NFIB Index for Small Business getting worse and worse, then what is happening to the prices of mortgage-backed securities [MBSL instruments? A. The prices of mortgagebacked securities are very stable and don't change much. B. The prices of mortgagebacked securities will go down like everything else. C. The prices of mortgagebacked securities will go up in this situation. D. No one can predict the price trends of mortgagebacked securities using Fed policy and economic indicators. [t is a wild game of chance. 2. If someone has a FICO credit score of 620 and if they need a 95% LTV loan to buy a new home, with a 45 front-end income ratio and a 55 percent back-end income ratio, then will they Qualify for a standard Fannie Mae J-Year loan from a n'pica] mortgage banker? A. Yes they will qualify. they have the minimum qualications necessary. B. They will only qualify if they can put a 10 percent downpayment instead ofa 5 percent downpayment as they are doing now. . C. No they will not qualify, they have too many risk factors that are not offset with positive factors. D. None of these factors matters. What matters is that the appraisal report must verify the value ofthe home matches the selling price. 3. What law gives a home buyer the right to a 3-dayr recission? A. Regulation X. B. Regulation Y C. Regulation 2. D. The Wall Street Reform and Consumer Protection Act (Dodd- Frank) 4. Ifa single borrower has a PlTI of$4, 000 what does that mean? A. this is the required minimum monthly gross income they need to get qualified to purchase a home. B. this is the borrower's monthly nancial cost of home ownership. It includes the cost of taxes and re insurance. C. this is their estimated cost of monthly payments for the home and it includes the replacement cost of things that will depreciate and breakdown over time. D. Erincipal. insurance, Property Taxes, and the do wnpayment investment. 5. If an entire neighborhood comes together and stage a protest at the local Planning Commission to object to a new casino, then what are they doing? A. They are demanding to have Police Power over the construction of the casino. B. They are demanding exclusionary zoning over the construction ofthe casino. C. They are demanding to have a variance over the construction of the casino. D. They are demanding a subdivision consistency ruling from the Planning Commission. 6. What' Is a major advantage of a REIT? A. As long as they payout 90 percent oftheir prots to the shareholders, they will not need to pay taxes. B. All income and prots are tax free no matter how much they pay their investors. C. Their investments in real estate come with a guarantee of dividend payments to the shareholders. D. RElTs get a guarantee from the federal government that any losses can reimbursed by the US Department of the Treasury because REITs have a long history of successful economic redevelopment. 7. Ha unique building like Hearst Castle located in San Simeon. California burned down, then what method would an appraiser use to determine the cost of rebuilding an exact duplicate of that structure? A. The Sales Comparable Approach B. The Income Approach Capitalization Method C. The Quantity Survey Method D. The Reconciliation Method 8. III combine four lots ol'land that are all next to each other and put it under the single ownership of one person, then what am I doing? A. You are using the econometrics method B. You are using the plottage method C. You are using the progression method D. You are using the nonconforming method 9. When you look at a lender's rate sheet and see lS-Year Fixed @J' 2.50% {Lilli} with an LTV of 80% and a FICO ) 150(15), then what does this mean? A. The borrower must pay [25% of the loan amount to the lender to get this great rate. B. The mortgage broker or loan ofcer can make 1.25% of the loan amount as a commission as long as the borrower has a F [CO over '50 and a 20% equity stake in the property. C. The loan officer and borrower must split the [.25 percent cost in order to get the great rate of 2.50% for a [5year loan. The borrower must still have a FICO over \"50 and a 20 percent equity stake in the property. D. These factors listed on a rate sheet are only recommendations and lenders are very generous in allowing everything to be negotiated between the borrower 3.: loan ofcer. 1t]. [fa landlordJ'owner gets sick and tired of renting apartments and if they convert those units into condominums and sells them for a prot, then gets out of the rental business, then what law are they taking advantage of? A. CostaHawkins Rental Housing Act B. AB [482 C. The Ellis Act D. The SAFE Act