Texas Real Estate Finance Practice Exam Flashcards

Texas Real Estate Finance Practice Exam Flashcards RESPA applies to which of these?First mortgage on a single-family home What is the term used for an agreement between the borrower and a permanent lender relative to future delivery of a takeout loan upon completion of construction?take-out commitment Which type of property is most benefited by the income capitalization approach to estimating value?apartment building The entity holding title to a property during the term of a deed of trust is called what?trustee The Tax Reform Act of 1986 established an entity that can issue multiclass securities. What is this entity called?

REMIC Fannie Mae and Freddie Mac are able to replenish their own funds by doing what?Selling mortgage-backed securities What are the steps in the sales comparison approach to estimating value?Choose appropriate comparable properties, adjust the comparables for the differences and estimate the value.What is the maximum annual amount a single taxpayer can give to a person without incurring a gift tax liability?

15,000

Commercial banks participate in real estate finance though all but which of the following methods?secondary mortgage market the cost recovery period for land improvements is how long?15 years What is the most important aspect of a credit report?It shows the borrower's attitude about handling credit and debt.What is one of the primary purposes of the secondary mortgage market?Cycle back money to primary lenders.Which of the following statements is not true about a note?a note must be tied to a mortgage to be legal Who is responsible for ordering the preliminary title report?escrow officer What is a leasehold mortgage called that is based mostly upon a well-known tenant's financial strength?credit loan How is the payoff of a construction loan normally accomplished?with a takeout loan Bill bought a property for $270,000. The value of the building on the property is $220,000. If the building has an economic life of 50 years, what is the depreciated value of the building after 5 years?

198,000

The successful bidder at a judicial foreclosure sale receives which of these documents?Certificate of Sale Why do lenders collect reserve funds at the property closing?To be sure money will be available for tax and insurance payments Which of the following statements is FALSE about a life estate?the most complete form of ownership

Investor Pete specializes in obtaining properties from investors in financial difficulty. What investment strategy does Pete practice?opportunistic What is the term used to describe a loan that is not government-backed?conventional Sam Frank is a retired Army officer who wants to purchase a new home using a VA loan. In 2000, Sam used his VA guarantee of $36,000 when he purchased his current home. Based on the VA's maximum guarantee of $104,250 and his partial eligibility, how much of a loan can Sam get with no money down?

273,000

Which statement about syndication is FALSE? Most investors belonging to syndicates invest a lot of their own money.Under which type of loan does the portion of payment that is applied to principal increase regularly over time?growing equity Which of the following lease options would be the least favorable to the tenant?tenant relocation Which Texas agency licenses, regulates, and examines the trust- and insurance-funded prepaid funeral contract sellers?TExas department of banking Al purchases a factory as an investment. He installs sprinklers in the building. What risk control technique is he practicing?reducing What is the main advantage of a single-family home investment over other real estate investments?liquidity Alex bought a property valued at $850,000 which has an annual net operating income of $102,500. What is the capitalization rate?.12 After analyzing the neighborhood, an appraiser will study all of the physical aspects of the specific property being appraised except for which of the following?highway accessibility In Texas, what is the maximum late payment penalty allowed?no restrictions Which of the following would probably not be a use of a junior loan?purchase of property through the VA What is a disadvantage of a graduated-payment loan?This plan could result in negative amortization.What percent of the REIT's assets must be made up of cash, real estate, mortgage notes, or government securities?75 The type of estate that has a definite beginning and ending date is known as what?estate for years Which of the following would not be an example of recasting a loan?giving a coluntary conveyance Who is the person who grants approval for the loan, rejects the loan, or in some cases, agrees to approve the loan if

certain conditions are met?underwriter

Jim Smith wants to purchase a vacation home and have it double as an investment. What is the maximum amount of time per year that Jim and his family can stay in the home and still be able to take the depreciation?14 days Which of the following statements is FALSE? non-institutional lenders are not subject to usury law.Which of these statements is TRUE about financing large apartment complexes?As the size of the building increases, the loan ratio is generally reduced.What does the term "mixed-use development" mean? More than one use for a single building Which of the following default types would be considered a technical default?failure to keep property in good repair Before an option is exercised, which of these costs will the optionee incur?Option fee With which kind of lease does the tenant not know the actual change in the rent amount in advance?indexed Which of the following is typically not a short-term mortgage loan?single-family home loan Mary is getting a $120,000 loan at 6.5 percent and will pay

• discount points. What will the effective interest rate be?

.06875

Which statement is not true about the Farm Credit System?FCS banks lend money from their deposits Which of the following is not a HUD responsibility?FDIC