rep ch 14

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lsantiago29
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rep ch 14
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2011-12-12 23:48:47
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rep ch 14
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  1. 1. When a deed contains racial covenants, they can be removed and a new grant deed drafted:
    A. if the language is offensive and/or restrictive
    B. only upon action at law
    C. only if the deed was executed prior to 1978
    D. only if the title company deems the language offensive and/or restrictive
    • Question #1
    • Answer: B
    • Explanation: A racially restrictive covenant is automatically considered unenforceable, so no action is necessary to remove such a covenant from a deed. However, in order to totally remove the covenant and begin with a new deed, a legal action would have to be pursued in court.
  2. 2. A seller lists her home for sale, and her broker subsequently submits to her a full-price offer from a ready, willing, and able buyer. The seller refuses the offer and tells the broker it's because the buyer is black. The broker may:
    A. tell the seller that she is in violation of the Fair Housing Act
    B. sue the seller for his full commission
    C. inform the buyer of his right to file a complaint with HUD
    D. All of the above
    • Question #2
    • Answer: D
    • Explanation: The seller has violated the Fair Housing Act. She also owes her broker the commission, since he did locate a suitable buyer.
  3. 3. A broker brings his seller an offer from a potential buyer. If the seller inquires into the race of the potential buyer, the broker:
    A. must disclose this information to the seller
    B. may disclose this information as long as it will not affect the seller's decision
    C. may disclose the information after obtaining permission from the buyer
    D. may not disclose this information because to do so would violate the Rumford Act
    • Question #3
    • Answer: D
    • Explanation: The Fair Employment and Housing Act is also known as the Rumford Act. It prohibits discrimination in the sale, rental, lease, or financing of housing.
  4. 4. A seller lists his home at a price about 10% above fair market value, requiring minority buyers to pay the listed price, but allowing his broker to negotiate with other buyers to pay lower amounts. This:
    A. does not violate the Fair Housing Act because minority buyers are not asked to pay more than the listed price
    B. would violate the Fair Housing Act only if an FHA or VA loan is involved
    C. subjects only the property owners to penalties for violation of the Fair Housing Act
    D. is unlawful and could make the broker liable for money damages
    • 5. A residential loan application asks for information regarding race and marital status. A loan applicant:
    • A. must answer the questions before the lender will process the application
    • B. should file a complaint with the appropriate state Attorney General
    • C. may refuse to provide this information
    • D. could sue the lender for asking information prohibited by the fair housing laws
  5. 5. A residential loan application asks for information regarding race and marital status. A loan applicant:
    A. must answer the questions before the lender will process the application
    B. should file a complaint with the appropriate state Attorney General
    C. may refuse to provide this information
    D. could sue the lender for asking information prohibited by the fair housing laws
    • Question #5
    • Answer: C
    • Explanation: By law, information on race and marital status may only be requested, not required.
  6. 6. Knowing that a factory in a certain area of town employs mostly women, the owner of a local property management company decides to create a specific sales program for that area. He tells his employees to target their efforts towards female renters. He also encourages them to charge higher rents to women. Which of the following statements is correct?
    A. Targeting efforts specifically toward female buyers is a violation of the fair housing laws
    B. Charging higher rents to women is a violation of the fair housing laws
    C. Both of the above are true
    D. Neither of the above is true
    • Question #6
    • Answer: C
    • Explanation: Targeting rental efforts toward women violates the fair housing laws, as does charging women higher rent.
  7. 7. Which of the following methods of advertising is legal?
    A. Only advertising in an ethnic newspaper
    B. Only asking current tenants, who are mostly white, to refer friends
    C. Only asking current tenants to refer minority friends
    D. Only asking current white tenants to refer their friends
    • Question #7
    • Answer: B
    • Explanation: Asking current tenants to refer their friends is permissible. But asking only white tenants, or inquiring about only minority friends, would be illegal. Advertising in an ethnic newspaper is legal as long as the landlord also advertises in a newspaper of general circulation.
  8. 8. Broker Bill specializes in listings in a particular neighborhood. He may lawfully refuse to accept a listing in that area for which of the following reasons?
    A. The seller's price is substantially above fair market value
    B. The seller is a minority and most of the residents in that area are white
    C. The home is listed in a particular area with mostly minority residents
    D. All of the above
    • Answer: A
    • Explanation: A broker is entitled to refuse a listing if the seller's asking price is substantially above the fair market value of the property. But a broker cannot refuse a listing based on race.
  9. 9. In 1935, Simmons divided his property into several parcels and sold them. Each deed contained a restriction that the land could not be sold or leased to "non-Caucasians" at any time before 2035. Which of the following is true?
    A. The restrictions are valid as long as Simmons is living
    B. The restrictions are unenforceable because they violate the U.S. Constitution
    C. The restrictions are illegal and cause the deeds to be invalid
    D. The restrictions may be enforced at the choice of the current owners
    • Question #9
    • Answer: B
    • Explanation: Race restrictions in deeds are void and unenforceable. However, the inclusion of such a restriction does not invalidate the deed itself.
  10. 10. In an integrated urban neighborhood, rising crime rates have caused a number of white families to move. Observing this trend, a broker begins actively soliciting listings from white families, providing discounted commission rates and frequent reminders that neighborhood values are declining. In doing so, the broker is:
    A. using legal, effective marketing techniques
    B. staying within the requirements of the Fair Housing Act
    C. violating the Fair Housing Act by engaging in blockbusting
    D. violating the Fair Housing Act by engaging in racial steering
    • Question #10
    • Answer: C
    • Explanation: Both of his marketing techniques constitute illegal acts under the Fair Housing Act.
  11. 11. Amuezca is buying a house. The broker recommends a lender. When Amuezca meets with the lender, the loan application asks for the applicant’s race and marital status. Amuezca should:
    A. fully disclose his race and marital status so the application can be processed
    B. refuse to disclose his race and marital status
    C. sue both the broker and the lender for violating fair housing/lending laws
    D. file a complaint with the Real Estate Commissioner
    • Question #11
    • Answer: B
    • Explanation: According to the Housing Financial Discrimination Act, it is illegal for a lender to discriminate on the basis of race or marital status, and an applicant does not need to disclose his race or marital status on an application. Complaints are pursued through the Department of Fair Housing and Employment, not the Real Estate Commissioner.
  12. 12. Under the Fair Housing Act, an apartment owner is permitted to do all but which of the following?
    A. Check references from previous landlords
    B. Run credit reports on applicants
    C. Require security deposits
    D. Require only single tenants to have a lease co-signor
    • Question #12
    • Answer: D
    • Explanation: Requiring only single tenants to have co-signors constitutes discrimination on the basis of marital status, and is a violation of the Fair Housing Act.
  13. 13. The purpose of the Equal Credit Opportunity Act is to:
    A. prevent lenders from discriminating against credit applicants
    B. lower the cost of obtaining financing
    C. standardize the requirements for obtaining credit
    D. increase the amount of credit available to individual borrowers
    • Question #13
    • Answer: A
    • Explanation: The Equal Credit Opportunity Act was enacted to bar lenders from discriminating against credit applicants based on race, color, religion, sex, marital status, and age (provided the applicant is of legal age).
  14. 14. Broker Beatrice obtains a full-price offer on a home from a Chicano buyer, as well as a lower price offer from a white buyer. She presents both offers to the seller, who accepts neither and instead sells to a neighbor, through Beatrice. The neighbor tells Beatrice and the seller he is buying the house because he is uncomfortable with minorities moving into the neighborhood. Who has not violated the Fair Housing Act?
    A. Beatrice
    B. The seller
    C. The white buyer
    D. The neighbor
    • Question #14
    • Answer: C
    • Explanation: The neighbor has violated the Fair Housing Act by acting to prevent a minority from moving into the neighborhood. The seller and Beatrice have violated the act by cooperating with the neighbor when they were aware of his intentions. The white buyer has done nothing to violate the act.
  15. 15. A licensee persuades several families to list their homes for sale by telling them that neighborhood values are declining due to a recent influx of minority residents. This tactic is called:
    A. good business practices
    B. racial steering
    C. blockbusting
    D. blind advertising
    • Question #15
    • Answer: C
    • Explanation: This licensee is engaging in "blockbusting," also called "panic selling." This practice is unlawful under the Fair Housing Act.

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