Chapter 6 Quiz

Federally chartered savings and loan associations doing business in California are regulated by the:

A) Federal Reserve Bank Board
B) Building and Loan Commissioner
C) Office of Thrift Supervision
D) Corporation Commissioner of California

The interest rate on a conventional loan secured by a first trust deed and note is usually:

A) The same as the rate on a Cal-Vet loan
B) About the same as the rate on an FHA or DVA loan
C) Higher than a "hard money" third trust Deed
D) The maximum rate allowed by law

The maximum amount guaranteed by the Department of Veterans Affairs on a $100,000 GI loan is:

A) 100% of the value of the property
B) $15,000
C) Unlimited if on a rental property
D) 40% of the loan

Since commercial banks are interested in "liquidity" and "marketability" in their investments, they prefer:

A)Second trust deed
B) Short term loans
C) Construction loans
D) Long term loans on properties likely to appreciate

Which of the following is a characteristic of mortgage companies:

A) Primarily make 2nd & 3rd trust deed loans
B) They make only FHA and GI loans
C) They operate primarily as loan correspondents
D) They do not make construction loans

THe Federal National Mortgage Association (FNMA) was created primarily for the purpose of 

A) Insuring savings deposits at commercial banks
B) Buying GI and FHA loans from lending institutions to stabilize the mortgage market
C) Making FHA Title II loans when banks refused to do so
D) Advancing funds to low income housing builders in large cities

The Real Estate Settlement Procedures Act prohibits the payment of:

A) A sales commission
B) Points
C) A "kickback"
D) Impounds

A lender would not be at risk if a new building project were not completed if the lender was making:

A) An interim loan
B) A take-out loan
C) Advances on a construction loan
D) A construction loan

If you have prospective buyers that want to obtain an FHA loan to purchase a home, you should advise them to contact:

A) An FHA appraiser
B) An authorized lending institution
C) A federal reserve bank
D)  A Federal Housing Administration office

One of the key factors used by a lender in qualifying an individual for a home loan is the

A) Number of borrower's children
B) Adequacy of the borrower's income
C) Wife's income
D) Borrower's draft status

The completion bond that is often required as part of a construction loan is issued for the protection of the:

A)Lender
B) Contractor
C) Owner
D) Subcontractor

Which of the following is a primary source of real estate mortgage funds for home loans?

A) Federal Deposit Insurance Corporation
B) Federal National Mortgage Association
C) Office of Thrift Supervision
D) Federal Savings and Loan Association

A contractor is building a new condominium with a $200,000 construction loan. The terms of the loan provide that a percentage of the funds be released at various stages of construction. Under this type of loan, the monies released would be referred to as:

A)Prorated advances
B) Obligatory advances
C) Accelerated payments
D) Mechanic's Lien

A CRV is used in conjunction with a home loan when dealing with the:

A) Department of Veteran's Affairs Association
B) Federal Housing Administration
C) Federal National Mortgage
D) California Farm and Home Purchase Plan Administration

The term "impounds" most nearly means

A) Penalties
B) Attachment
C) Reserves
D) Points

The loan-to-value ratio on real estate loans is the ration of the loan amount to the:

A) Appraised value
B) Sales price
C) Assessed value
D) Monthly payments

Which of the following financing terms are synonymous

A) Construction loan - Take out loan
B) Take out loan - Secondary financing
C) Obligatory advances - Installment loan
D) Interim Loan - Construction Loan

The largest source of financing for junior loans available today is through

A) Mortgage bankers
B) Savings and Loan Associations
C) Private investors
D) Commercial Banks

An increase in the discount rate by the Federal Reserve Board has what effect on the money market

A) It makes more money available
B) It makes less money available
C) It has no effect
D) It produces lower home loan interest rates

The Cal-Vet program which aids California veterans in the purchase of single family residences is financed by

A) Banks and other institutional lenders
B) The Sale of state supported bonds
C) Veterans Retirement funds
D) Appropriations by the State Senate and Assembly