1) What is the seller's primary function at closing?

 a) To receive payment for the property
 b) To support the closing agent
 c) To deliver the title
 d) To pay the broker's commission

2) The most important document at closing is the

 a) deed.
 b) survey.
 c) settlement statement.
 d) property inspection.

3) Recording the deed is done through which of these?

 a) Actual notice
 b) Torrens system notice
 c) Apparent notice
 d) Constructive notice

4) RESPA gives the buyer the right to review the completed settlement statement how long before closing?

 a) Two calendar days
 b) One business week
 c) One calendar week
 d) One business day

5) Who should have title insurance?

 a) Buyer
 b) Seller
 c) The buyer and the lender
 d) The buyer and the seller

6) A homeowner's insurance policy typically covers all but which of these?

 a) Fire
 b) Flood
 c) Theft
 d) Explosion

7) Money that the buyer or seller receives at closing is called what?

 a) Credit
 b) Proration
 c) Debit
 d) Reimbursement

7) Money that the buyer or seller receives at closing is called what?

 a) Credit
 b) Proration
 c) Debit
 d) Reimbursement

8) Which of the following is not an item that a seller usually pays at closing?

 a) Fee for clearing the title
 b) Broker commission
 c) Homeowner's insurance
 d) Transfer taxes

9) Sellers Glen and Jill are closing on their home sale next week. How will they know how much money they will receive from the sale?

 a) The lender calculates what the buyer owes and then tells the sellers what they will receive.
 b) The buyer's agent tells the seller's agent.
 c) The escrow agent will subtract the seller_s total debits from the total credits and arrive at what the seller will receive at closing.
 d) The broker finds out from the lender and tells the sellers.

10) Taxes on the property Buyer Alan is purchasing are $3,200 due on December 31. If the closing is set for October 15, using the 365-day method, how much of the taxes will be credited to the buyer? (Assume it is not a leap year and the day of closing belongs to the seller.)

 a) The seller's share of $2,533.38
 b) The buyer's share of $666.62
 c) The seller's share of $2,525.76
 d) The buyer's share of $674.24

11) Prepaid expenses are those that

 a) will be paid in arrears.
 b) will be a credit to the buyer.
 c) will be a debit to the seller.
 d) were paid in advance.

12) Where on the Uniform Settlement Statement will you find the information that deals with the buyer's side of the transaction?

 a) Left side of page 1
 b) Right side of page 1
 c) Top of page 2
 d) Bottom of page 2

 1) The buyer's primary function at closing is to

 a) deliver the title.
 b) pay the real estate taxes.
 c) record the transaction.
 d) pay the purchase price for the property.

2) Which statement about the Torrens system is FALSE?

 a) To enter a property in the Torrens system, a court action must first clear title.
 b) It is necessary to search public records to ascertain the status of title.
 c) The Torrens title record is the title itself.
 d) The Torrens registry retains the original registration documents and provides copies to the recorder or other appropriate office.

3) Which of the following locations is the least likely place to hold a closing?

 a) Title company
 b) Attorney's office
 c) Lender's site
 d) Broker's office

4) RESPA would apply to which of these?

 a) Second mortgage on a condominium
 b) Seller-financed loan
 c) Hotel mortgage
 d) Loan assumption

5) Most lenders require buyers to purchase

 a) a survey of the property.
 b) title insurance.
 c) homeowner's insurance.
 d) closing insurance.

6) Buyers Jim and Jan are closing on a home later this month. They have the right to review the completed settlement statement how long before closing?

 a) One calendar week
 b) One business day
 c) Two calendar days
 d) One business week

7) How does the buyer know how much money to bring to closing?

 a) The lender calculates what's owed and tells the buyer what to bring.
 b) The buyer brings a blank check and finds out the final amount at the closing meeting.
 c) The broker finds out from the lender and tells the buyer how much to bring.
 

d) The escrow agent will subtract the total of the buyer_s credits from the total debits and the result is what the buyer needs to bring.

8) Which of these would be a CREDIT to the buyer at closing?

 a) Credit report
 b) Homeowner's insurance premium
 c) Earnest money deposit
 d) Home inspection

9) What is the real estate transfer tax based on?

 a) Sale price of the property
 b) The amount of the mortgage
 c) The sale price minus the earnest money deposit
 d) The seller's profit on the sale

10) Which statement about prorated items is TRUE?

 a) They are always a credit to the seller and a debit to the buyer.
 b) They are always a debit to the seller and a credit to the buyer.
 c) They are always a debit to one party and a credit to the other party for the same amount.
 d) They are always divided equally between the buyer and the seller.

11) Where on the Uniform Settlement Statement will you find the information that deals with the seller's side of the transaction?

 a) Left side of page 1
 b) Right side of page 1
 c) Top of page 2
 d) Bottom of page 2

12) Paul will get the second quarter water bill at the end of June. The bill is $39.00 per quarter. If closing is on May 7, what will be Paul_s share of the bill?

 a) $12.87
 b) $15.91
 c) $23.22
 d) $25.74

1) Proof of ownership of a property is called what?

 a) Marketable title
 b) Abstract of title
 c) Evidence of title
 d) Title commitment

2) What is "chain of title?"

 a) The list of all parties who have ever owned real estate.
 b) The bundle of rights linked to the recorded title to a parcel.
 c) A chronology of successive owners of record of a parcel of real estate.
 d) Involuntary conveyance of title by statutory rules of descent.

3) Which of the following persons may, but is not required to, attend a closing?

 a) Seller
 b) Lender representative
 c) Buyer
 d) Closing agent

4) What form does RESPA require to be used for itemizing closing costs?

 a) Good Faith Estimate
 b) Truth-in-Lending Statement
 c) HUD-1 Form
 d) Mortgage Loan Disclosure Statement

5) Which statement is true about accepting referral fees?

 a) It is common business practice.
 b) It could be a violation of state licensing laws.
 c) It is forbidden under any circumstances.
 d) It is permissible in amounts under $50.

6) RESPA applies to all of the following EXCEPT which?

 a) Condominium purchase
 b) Seller-financed loan
 c) Loan involving a second mortgage
 d) Federally-insured loan

7) Which of the following is not an item that a buyer usually pays at closing?

 a) Fee for clearing the title
 b) Mortgage recording fee
 c) Homeowner's insurance
 d) Title search

8) Money that the buyer or seller needs to pay at closing is called what?

 a) Expense
 b) Credit
 c) Debit
 d) Proration

9) Which of these would be a CREDIT to the seller at closing?

 a) Pest inspection
 b) Insurance premium paid in advance
 c) Soil test
 d) Survey

10) Which of the following is an item that is not normally prorated?

 a) Title fees
 b) Taxes
 c) Rent
 d) Utilities

11) If a seller prepaid an insurance policy of $2,100 and the closing is set for March 15, using the 12-month/30-day method, what will the buyer owe the seller?

 a) $431.62
 b) $437.45
 c) $1,662.55
 d) $1,668.38

12) Expenses that the seller incurred but have not yet been billed for at the time of closing are

 a) prepaid expenses.
 b) credits to the seller.
 c) debits to the buyer.
 d) accrued expenses.

1) Grant moves into his new office space while he awaits the completion of the negotiations of the lease terms. During this interim period, Grant makes monthly rent payments and the owner accepts them. How would Grant_s lease at this time be classified?

 a) Estate for years
 b) Estate from period to period
 c) Estate at will
 d) Estate at sufferance

2) Which kind of lease has no time limit?

 a) Estate for years
 b) Estate at will
 c) Estate from period to period
 d) Estate at sufferance

3) A lease is

 a) both an instrument of conveyance and a contract.
 b) neither an instrument of conveyance nor contract.
 c) a promise note.
 d) a document that conveys legal title.

4) Which of these items is not included in a lease agreement?

 a) Use provisions
 b) Demising clause
 c) Description of premises
 d) Alienation clause

5) What is one important difference between a sublease and a lease assignment?

 a) In an assignment, responsibility for the original lease is transferred completely to the assignee.
 b) In a sublease, the original tenant retains primary responsibility for performance of the original lease contract.
 c) A sublease does not convey any of the leasehold interest.
 d) A sublease conveys the entire leasehold interest.

6) Mark earns $185,000 a year and he pays $2,200 per month for a rent-stabilized apartment. Which statement is true?

 a) Mark can insist that the landlord lower the rent.
 b) The apartment can be converted to a rent-controlled apartment.
 c) The apartment can be decontrolled.
 d) Mark can be evicted.

7) Which kind of lease increases at specified intervals?

 a) Graduated
 b) Gross
 c) Percentage
 d) Net

8) A lease automatically terminates under which of the following circumstances?

 a) The tenant fails to pay rent.
 b) The leased property is foreclosed.
 c) The tenant goes out of business.
 d) The landlord cancels the lease.

9) When a tenant agrees to pay all taxes, insurance, maintenance and repairs, that tenant has what kind of lease?

 a) Gross
 b) Periodic
 c) Net
 d) Graduated

1) A lease conveys exclusive use and

 a) requires recording of a leasehold conveyance.
 b) is also called an exclusive freehold estate.
 c) is not a binding contract upon agreement.
 d) it may also restrict some uses.

2) Jim signed a six months lease. What type of lease did Jim sign?

 a) Estate at will
 b) Estate for time
 c) Estate for years
 d) Estate at sovereignty

3) Mary has remained in her apartment two weeks past her move-out date, without any payment. What type tenant is Mary?

 a) Holdout tenant
 b) Holdover tenant
 c) Tenant at-large
 d) Tenant in-arrears

4) Which part of a contract deals with the legal requirements to enter into a contract?

 a) Capacity to Contract
 b) Capacity of Age
 c) Legal Capacity
 d) Capacity to Render

5) Which aspect of a contract deals with when a tenant takes possession of the property?

 a) Allowance Clause
 b) Passage Clause
 c) Demise Clause
 d) Demising Clause

6) In which contract section might you the property address?

 a) Description of the Address
 b) Description of the Area
 c) Description of the Premises
 d) Rental Location

7) What kind of lease contains a recapture clause?

 a) Percentage
 b) Net
 c) Provisional
 d) Graduated

8) Which of the following summarizes the general terms of a ground lease?

 a) The landlord sells the ground to another, then leases it back.
 b) A tenant buys the landlord's ground, then leases the improvements.
 c) The landlord leases the ground floor of the building to a commercial tenant.
 d) The tenant leases the ground from the landlord and owns the improvements.

d) The tenant leases the ground from the landlord and owns the improvements.

D

9) Bill has informed his landlord that he will be moving in 30 days. What action has Bill taken regarding his lease requirement?

 a) He has provided an advance order of moving.
 b) He has given notice.
 c) He has given due process.
 d) He has given notice of vacating.

1) Which type of lease has no automatic renewal?

 a) Estate For Years
 b) Estate At Will
 c) Estate At Sufferance
 d) Estate At Order

2) Most apartment leases are

 a) estates at will.
 b) periodic estates.
 c) estate at sufferance.
 d) estates from period to period.

3) Which statement best defines the concept of "quiet enjoyment?"

 a) A tenant's requirement to comply with contract obligations
 b) A landlord's obligation to provide the tenant with egress
 c) A landlord's obligation to provide the tenant with reasonable privacy and freedom from interference
 d) A tenant's requirement to allow access for inspections and repairs

4) In which contract provision would the length of the lease be outlined?

 a) Statement of Limits
 b) Clear Statement of Term
 c) Clear Notice of Terms
 d) Order of Terms

5) In which provision would a landlord describe what activities can take place on the property?

 a) Use of the Premises
 b) Property Order
 c) Location Use
 d) Property Regulations

6) In New York City, the maximum base rent (MBR) system allows for rent to be adjusted

 a) every four years.
 b) every three years.
 c) every seven years.
 d) every two years.

7) Jim holds a commercial lease. Last year his rent went up 4% based on a 4% increase in the wholesale price index. What type of lease does Jim have?

 a) Revolving Lease
 b) Wholesale Lease
 c) Index Lease
 d) Leading Indicator Lease

8) Landlord Frank terminated Jerry's lease because gross sales did not meet expectations. Jerry agreed to what type of lease?

 a) Retail Level Lease
 b) Percentage Lease
 c) Reorder Lease
 d) Market Level Lease

9) Which of the following is a characteristic of land leases?

 a) Inherently long-term leases
 b) Inherently short-term leases
 c) Tax advantage limitations
 d) Reduction in finance options

1) What is the underlying tenet of a contract agreement?

 a) The meeting of the minds
 b) The actual contract form
 c) The written contract words
 d) The public notice of the offer

2) Neighbor Sam told seller Jake that he would buy 2 adjoining acres if Jake ever decides to sell. This is an example of a

 a) legal and binding contract.
 b) voidable and illegal contract.
 c) valid but unenforceable contract.
 d) enforceable contract.

3) A contract which neither party can enforce is called

 a) voidable.
 b) void.
 c) open.
 d) denied.

4) A contract that conveys an interest in real estate must

 a) include a title closing entity.
 b) contain default penalties.
 c) include all outstanding liens against the property.
 d) contain a legal description of the property.

5) Which contract provision allows for the transfer of the contract to another person?

 a) Assignment of a Contract_
 b) Operation of Law
 c) Transfer Clause
 d) Execute Clause

6) Which legal remedy resets parties to pre-contract status?

 a) Revision
 b) Reorder
 c) Rescission
 d) Refile

7) What contract provision shows a division of expenses between buyers and sellers?

 a) Apportionments
 b) Debits & Credits
 c) Terms of Payment
 d) Exclusions

8) What is used to seal a binder agreement?

 a) A promise to pay
 b) A judgment letter
 c) A property lien
 d) Earnest money

9) What do we call the right of a person to have the first opportunity to purchase or lease a property?

 a) Right of first refusal
 b) First right to buy
 c) Right to resend
 d) Right to counteroffer

1) What is an important legal feature of a contract?

 a) It represents a "meeting of the minds."
 b) It must use precise wording in a document.
 c) It is not voidable.
 d) It can be created only by an attorney.

2) According to contract law, every valid contract is also what?

 a) Void
 b) Enforceable
 c) Enforceable or unenforceable
 d) Voidable

3) A contact agreement to sell alcohol to minor would be considered

 a) legal.
 b) executable.
 c) excusable.
 d) void.

4) The Statute of Limitations requires that parties to a contract who have been damaged or who question the contract's provisions do what?

 a) Act within a statutory period.
 b) Select a specific, limited course of action for recouping their losses.
 c) Arbitrate prior to taking court action.
 d) Wait a statutory period before they may take legal action.

5) What is the purpose of the Statute of Frauds?

 a) It invalidates certain oral contracts.
 b) It requires certain conveyance-related contracts to be in writing.
 c) It nullifies oral leases and listing agreements.
 d) It eliminates fraud in real estate contracts.

6) Which of the following contracts must be in writing to be enforceable?

 a) A parol contract
 b) A six-month lease
 c) A two-year lease
 d) An executory contract

7) A buyer submits an offer to a seller. Two hours later, the buyer finds a better house, calls the first seller, and withdraws the offer. Which of the following is TRUE?

 a) The buyer may not revoke the offer in such a short period of time.
 b) The first seller may sue the buyer for specific performance.
 c) If the seller accepted the offer, the buyer must perform.
 d) The original offer is legally terminated.

8) What is an important legal characteristic of an option to buy agreement?

 a) The potential buyer, the optionee, is obligated to buy the property once the option agreement is completed.
 b) The optionor must perform if the optionee takes the option, but the optionee is under no obligation to do so.
 c) The contract can be executed at no cost to the optionee.
 d) It is a bilateral agreement.

9) Which of the following is a good example of a unilateral contract?

 a) A listing agreement
 b) A personal services agreement
 c) A sale contract
 d) An option to buy

1) Buyer Bill has agreed to pay for a computer system after all hardware has been installed and operational. What type of contract does Bill hold?

 a) Executory
 b) Lateral
 c) Executed
 d) Open Option

2) A patron at a restaurant is agreeing to a(n)

 a) expressed contact.
 b) intended contract.
 c) implied contract.
 d) allowance contract.

3) How might a voidable contract become valid?

 a) If neither party agrees to the terms.
 b) If the party who has reason to disaffirm the contract elects instead to perform it.
 c) If the party who wants to enforce the contract seeks legal relief.
 d) If the party who wants to enforce the contract seeks damages.

4) When is a contract terminated?

 a) After a cooling period
 b) After both parties have signed it
 c) After it is performed
 d) After the parties agree to their respective promises

5) Mike signed a rental agreement for his friend Norm. What must be enforced for this contract to be binding?

 a) Power of Attorney
 b) Power of Use
 c) Waiver of Attorney
 d) Attorney At Use

6) Which contract element indicates a mutual agreement?

 a) Description and Order
 b) Terms
 c) Dissolution
 d) Offer and Acceptance

7) A prospective homebuyer submits a signed offer to buy a house with the condition that the seller pays financing points at closing. The seller disagrees, crosses out the points clause, then signs and returns the document to the buyer. At this point, assuming all other contract validity items are in order, what is the status of the offer?

 a) It's an accepted offer; therefore a valid contract.
 b) It's an invalid contract.
 c) It's still an offer.
 d) It's an invalid offer.

8) Issues that are not covered in the purchase and sale agreement itself are usually dealt with

 a) through verbal agreements.
 b) via handwritten notes.
 c) using preprinted riders.
 d) using a schedule of changes.

9) Which contract provision makes previous promises null and void?

 a) Mager Clause
 b) Merger Clause
 c) Rescind Clause
 d) Vacant Clause

1) Which of the following documents is not one that will be needed at closing?

 a) Prior deed
 b) Copy of property tax bill
 c) Prior title insurance policy
 d) Seller's credit report

2) If an attorney make changes to an offer, what action should follow?

 a) All parties to the contact must sign the changes.
 b) All parties to the contact must initial the changes.
 c) A notary must sign and stamp the changes.
 d) The broker must complete a rider.

3) What is the most common form of property description?

 a) Map coordinates
 b) Deed map
 c) Street address
 d) Survey map

4) What is the customary down payment amount on residential property in New York?

 a) 10 percent
 b) 15 percent
 c) 20 percent
 d) 25 percent

5) What is a lead-based paint disclosure used for?

 a) All residential property
 b) Homes built prior to 1978
 c) Only commercial property
 d) Only rental property

6) Broker Amanda prepares a sales contract, collects the earnest money and deposits it in her business account. Which statement is TRUE?

 a) Amanda has illegally commingled the earnest money with her own money.
 b) Only attorneys can hold and deposit earnest money.
 c) Amanda must deposit the money in the Lawyers' Fund.
 d) Amanda has done nothing wrong.

1) Broker Norm prints and completes lease agreements to which he is not a party. What can be said about Norm's actions?

 a) This action is perfectly legal in New York.
 b) Norm can complete the lease agreements as long as he has a lawyer co-sign them.
 c) Brokers may not complete leases to which they are not a party.
 d) Brokers are allowed to complete any lease, provided all parties agree.

2) Which of the following terms is not used to describe a binder?

 a) Receipt
 b) Buyer's Statement
 c) Purchase Offer
 d) An Agreement

2) Which of the following terms is not used to describe a binder?

 a) Receipt
 b) Buyer's Statement
 c) Purchase Offer
 d) An Agreement

3) Which statement best defines a Certificate of Occupancy?

 a) A certificate issued by a local building department that indicates that the building is in proper condition to be occupied.
 b) A certificate issued by a HUD that indicates that the building is in proper condition to be occupied.
 c) A certificate issued by the property owner that indicates that the building is in proper condition to be occupied.
 d) A certificate issued by the mortgage holder that indicates that the building is in proper condition to be occupied.

4) What is the purpose of the Lawyers' Fund?

 a) Designed to promote ethics training among lawyers
 b) Allows lawyers to deposit earnest monies into a State wide account
 c) Provides a fund for loans to lawyers for professional development
 d) Designed for law clients who are unable to get reimbursement from their lawyer who has caused them loss

5) In New York, the practice of law by a non-attorney is

 a) a felony.
 b) a class 3 felony.
 c) a misdemeanor.
 d) subject to review by a panel of peers.

6) An attorney review clause

 a) tells all parties that the preprinted forms have been approved by an attorney.
 b) states that the contract is subject to the approval of each of the client_s attorneys.
 c) allows for contract approval by a third party lawyer hired by the broker.
 d) states that a lawyer can rescind the contract terms within 10 days of contract approval.

1) Which one of the following documents is least like a binder?

 a) Receipt
 b) Contract for sale
 c) Agreement
 d) Purchase offer

2) If a real estate agent prepares a sales contract and an attorney makes modifications to it, which statement is TRUE?

 a) The contract must be rewritten and signed again.
 b) All the parties must initial the changes.
 c) The contract becomes unenforceable.
 d) The contract will be valid after a five-day waiting period.

3) Which of these is a common property description?

 a) Tax map
 b) Survey
 c) Street address
 d) Subdivision plat map

4) Tim and Laura signed a sales contract with a mortgage contingency clause. They do not try to get a loan, and when the deadline for loan approval draws near, they tell their agent they couldn't get a loan. Which statement is TRUE?

 a) They can cancel the contract and get their earnest money refunded.
 b) The mortgage contingency clause is not valid.
 c) The sellers must give them an extension to secure the loan.
 d) Tim and Laura have not acted in good faith; so they cannot get their earnest money back.

5) Which of the following is one of the purposes of the Lawyers' Fund?

 a) To protect lawyers who are sued by clients
 b) To compel real estate companies to use standard forms
 c) To reimburse clients for money that was misused by their attorney
 d) To prevent licensees from preparing real estate contracts

6) Broker Sara completes a preprinted sales contract. The contract was not approved by the local Real Estate Board nor the Bar Association. Which statement is TRUE?

 a) Sara cannot legally fill out this contract.
 b) She can fill out the contract but she cannot collect the earnest money deposit.
 c) Sara can use a binder but not a sales contract.
 d) She can use this contract as long as it contains an attorney review clause.

1) In the event of default by the purchaser, the lender has the right to bring legal action through the courts to satisfy the debt. This is called by what name?

 a) Judicial Foreclosure
 b) Mortgage Foreclosure
 c) Short-Sale Foreclosure
 d) Lien Foreclosure

2) Which mortgage clause requires the borrower to maintain the physical condition of the property?

 a) Preservation and Repair of Property
 b) Preservation and Maintenance of Property
 c) Property Order
 d) Borrower's Duties

3) Borrower Jake has defaulted on his mortgage and the lender has required the loan to paid in full. This action is based on which mortgage feature?

 a) Forward Clause
 b) Advanced Clause
 c) Acceleration Clause
 d) Call Due Clause

4) Typically, the interest rate on an ARM is based in part on

 a) an index.
 b) the gross national product.
 c) a payment cap.
 d) the federal discount interest rate.

5) In which type of loan is the payment allocated only to interest?

 a) Backload loan
 b) Balloon
 c) Amortized
 d) Term mortgage

6) An interest-only loan might be a good choice

 a) for a buyer who plans to own the property for a short time and believes the property will appreciate during that time.
 b) for a buyer who plans to own the property for a long time.
 c) for a lender in a market that is decreasing in value.
 d) for a seller in a buyer's market.

7) Typically, conventional loans

 a) require lower down payments than government-backed loans require.
 b) are less flexible than government-backed loans .
 c) have more forms than government-backed loans.
 d) require higher down payments than government-backed loans require.

8) Conventional loans are typically uninsured. This means that

 a) the lender must have a reserve balance on hand to cover the loan amount.
 b) the mortgage must be held by the originator until all terms have been meet.
 c) the mortgage itself provides the only security for the loan.
 d) the borrower must have a co-signer.

9) PMI loans made after July 1999 are now regulated by Federal law. What is this law called?

 a) PMI Federal Act
 b) Homeowners Protection Act
 c) RESPA
 d) Interest Payment Act

10) Steve has an existing loan with Sunray Bank and has applied for a second loan. He does not have to pay off his existing mortgage in order to qualify. What type of loan is Steve getting?

 a) Wraparound Loan
 b) Bridge Loan
 c) Swing Loan
 d) Ancillary Loan

11) What type of loan is often used when a seller will not accept a property sale contingency?

 a) Draw Loan
 b) Banked Loan
 c) Bridge Loan
 d) Straight Loan

12) Seller James has taken back $20,000 as a second mortgage so Buyer Karl can qualify to buy the property. The $20,000 is what type of mortgage?

 a) Hold Over Mortgage
 b) Advanced Mortgage
 c) Principal Mortgage
 d) Purchase Money Mortgage

13) Al is seeking an FHA loan. Where would he NOT go to make an application?

 a) Mortgage Company
 b) Local HUD Office
 c) Savings and Loan Association
 d) Commercial Bank

14) Ruth must deposit $1,113.45 in to a FHA-backed escrow account. This is known as what type of account?

 a) Accounts Payable
 b) Accounts Receivable
 c) Impound Account
 d) Forward Account

15) Which of the following does not meet the criteria for a VA loan?

 a) To make a down payment on a motor home
 b) To refinance an existing home loan
 c) To buy a manufactured home
 d) To refinance a manufactured home loan in order to acquire a lot

1) What is another term used to describe a promissory note?

 a) Attachment
 b) Covenant
 c) Bond
 d) Bill

2) Fred reclaimed a foreclosed property by paying off owed amounts, including interest and costs? What action has Fred taken?

 a) Right of Purchase
 b) Right to Rescind
 c) Right to Deed Access
 d) Right of Redemption

3) Which mortgage clause requires a borrower to maintain the physical condition of the mortgaged property?

 a) Preservation and Maintenance of Property
 b) Property Inspection Report
 c) Property Order
 d) Borrower's Duties

4) How is the interest on a ARM loan determined?

 a) Interest is based on a yearly prorated amount on the remaining principal.
 b) Interest is determined by the debt-to-loan ratio.
 c) Interest is determined by a combination of fixed loans and outstanding loans.
 d) Interest is based on a selected economic indicator index.

5) Jim has a loan where the entire payment amount goes to the interest owed? What type of loan does Jim hold?

 a) Fixed
 b) Straight
 c) Amortized
 d) Open

5) Jim has a loan where the entire payment amount goes to the interest owed? What type of loan does Jim hold?

 a) Fixed
 b) Straight
 c) Amortized
 d) Open

6) Paul's loan payment is the same amount each month. Paul is most likely holding what kind of loan?

 a) Open
 b) Balloon
 c) Fully Amortized
 d) Retraced

7) Typically, conventional loans

 a) require lower down payments than government-backed loans require.
 b) are less flexible than government-backed loans .
 c) have more paperwork than government-backed loans.
 d) carry prepayment penalties, while government-backed loans do not.

8) PMI loans made after July 1999 require that the loan must be released

 a) when the loan-to-value ratio reaches 50 percent.
 b) after 5 years of loan payments.
 c) when the loan-to-value ratio reaches 78 percent.
 d) after 7 years of loan payments.

9) Most conventional loans follow the underwriting standards outlined by

 a) Freddie Mac and Fannie Mae.
 b) the First National Bank.
 c) the Mortgage Loan Trust Bank.
 d) the Standards and Poor's Trust.

10) Buyer Rich has asked Seller Sally to hold $15,000 as a second mortgage. What type of mortgage is Rich requesting?

 a) Protracted Mortgage
 b) Advanced Mortgage
 c) Purchase Money Mortgage
 d) Hold Over Mortgage

11) Fred has an existing property mortgage, but seeks a second loan. What type of loan might help Fred?

 a) Swing Loan
 b) Wraparound Loan
 c) Pillow Loan
 d) Ancillary Loan

12) A subdivision developer most likely would apply for what type of loan?

 a) Window Loan
 b) Home Equity Loan
 c) Reverse Annuity Mortgage
 d) Blanket Loan

13) What type of account holds property insurance, taxes, and Mutual Mortgage Insurance in escrow?

 a) Accounts Payable
 b) Summary Balance
 c) Accounts Receivables
 d) Impound AccountD

14) Which of the following is NOT an FHA loan requirement?

 a) The borrower must occupy the property.
 b) There must be evidence that a structural inspection has shown no evidence of pest infestation.
 c) The maximum purchase price of the property cannot exceed $250,000.
 d) The real estate must be appraised by an approved FHA appraiser.

15) Where does SONYMA get it's funding?

 a) Proceeds from tax exempt mortgage revenue bonds
 b) Private investors
 c) HUD funding
 d) Proceeds from state sales taxes

1) What type of document does a home owner sign when agreeing to a mortgage?

 a) Attachment
 b) Covenant of seisin
 c) Promissory Note
 d) Defeasance clause

2) Mark gets a home loan and the lender will charge him 3 points at closing. If the loan is for $68,000, what will Mark be assessed in points?

 a) $680
 b) $1,360
 c) $2,040
 d) $2,720

3) What do we call the right to reclaim a property that has been foreclosed by paying off amounts owed to creditors, including interest and costs?

 a) Right of Redemption
 b) Right to Rescind
 c) Right to Deed Access
 d) Right of Remainder

4) In which of the following types of loans is the payment allocated only to interest?

 a) Interest Only
 b) Balloon
 c) Amortized
 d) Adjustable rate

5) What is the interest rate on an ARM tied to?

 a) Margin
 b) Index
 c) Payment cap
 d) Rate cap

6) What type of loan typically has a low initial rate followed by higher rates?

 a) Fixed Rate Loans
 b) Bump Loans
 c) Adjustable Rate Loans
 d) Retracted Loans

7) Which statement is true?

 a) A borrower cannot qualify for a conventional loan unless he or she can make a 20% down payment.
 b) Private mortgage insurance is available for FHA loans.
 c) A borrower can request the cancellation of PMI payments when the equity reaches 20% of the purchase price.
 d) A lender can continue to collect PMI payments until the homeowner's equity reaches 25%.

8) Fixed-rate fully-amortized loans

 a) increase the interest rate as the principal declines.
 b) decrease the interest rate as the principal declines.
 c) reduce the interest rate by 1/2 percent every 5 years.
 d) provide a fixed interest rate for the life of the loan.

9) How does a borrower use private mortgage insurance?

 a) A borrower can reduce monthly interest rate payments over the life of the loan by getting private mortgage insurance.
 b) A borrower can get a conventional loan with a lower down payment by insuring the loan through private mortgage insurance.
 c) A borrower can get a VA loan with a lower down payment by insuring the loan through private mortgage insurance.
 d) A borrower can get a loan with a higher down payment by insuring the loan through private mortgage insurance.

10) Which loan covers the period of time between the end of one mortgage and the beginning of another?

 a) Construction
 b) Wraparound
 c) Open-end
 d) Bridge

11) Which of the following is not true about reverse annuity mortgages?

 a) The lender makes payments to the borrower.
 b) This mortgage type is popular among the elderly.
 c) The borrower pays a fixed rate of interest.
 d) The loan must be repaid before the borrower's death.

12) A blanket mortgage

 a) covers more than one piece of property.
 b) entails entering into two agreements simultaneously.
 c) is subordinate to a first mortgage.
 d) reduces the monthly payment for a borrower during the initial years.

13) Which organization insures loans made by approved lending institutions?

 a) SONYMA
 b) FHA
 c) RHS
 d) VA

14) In an effort to make it possible for veterans returning from World War II to purchase a home, the Veterans Administration offered the opportunity for veterans to purchase a home with

 a) a 1 percent down payment.
 b) a 3 percent down payment.
 c) a 4 percent down payment.
 d) no money down.

15) The loan origination fee on a VA loan cannot exceed

 a) 2 percent of the loan amount.
 b) 5 percent of the loan amount.
 c) 1 percent of the loan amount.
 d) 10 percent of the loan amount.