Question 1

The cost of mortgage loan borrowing is dependent on the cost of money to the lender, reserves for default, loan servicing costs, and available investment alternatives.

Accepted Answer

A) True 
 B)False

Question 2

Choose the one most appropriate answer for each.
-requires immediate repayment of a loan if ownership transfers;also called a due-on-sale clause

Accepted Answer

A) alienation clause 
B) automated underwriting systems 
C) computerized loan origination 
D) disintermediation 
E) due-on-sale clause
F)Fannie Mae
G)Farmer Mac
H)Fiat money
I)FIRREA
J)Freddie Mac
K)Ginnie Mae
L)mortgage broker
M)mortgage company
N)mortgage-backed securities
O)municipal bonds
P)participation certificates
Q)prepayment penalty
R)primary market
S)secondary mortgage market
T)usury 
A) alienation clause 
B) automated underwriting systems 
C) computerized loan origination 
D) disintermediation 
E) due-on-sale clause
F)Fannie Mae
G)Farmer Mac
H)Fiat money
I)FIRREA
J)Freddie Mac
K)Ginnie Mae
L)mortgage broker
M)mortgage company
N)mortgage-backed securities
O)municipal bonds
P)participation certificates
Q)prepayment penalty
R)primary market
S)secondary mortgage market
T)usury

Question 3

The secondary mortgage market is an area of activity in which

Accepted Answer

A)  a borrower may get loans if the primary market cannot accommodate them. 
B)  second mortgages are made. 
C)  existing mortgages are bought, sold and discounted. 
D)  foreclosed properties are bought and sold. 
A)  a borrower may get loans if the primary market cannot accommodate them. 
B)  second mortgages are made. 
C)  existing mortgages are bought, sold and discounted. 
D)  foreclosed properties are bought and sold.

Question 4

Mortgage brokers do not lend their own money but simply put lender and borrower together.

Accepted Answer

A) True 
 B)False

Question 5

Automated underwriting systems have dramatically overhauled the mortgage loan underwriting process.

Accepted Answer

A) True 
 B)False

Question 6

Which of the following specializes in making loans and reselling them?

Accepted Answer

A)  FNMA 
B)  Mortgage brokers 
C)  Mortgage bankers 
D)  VA 
A)  FNMA 
B)  Mortgage brokers 
C)  Mortgage bankers 
D)  VA

Question 7

The basic role of the GNMA is to

Accepted Answer

A)  resupply capital to primary lenders by guaranteeing repayment of pools of mortgage loans. 
B)  insure loans made by primary government lenders. 
C)  sell mortgage pools to money market funds. 
D)  facilitate the resale of mortgage loans by marketing participation certificates. 
A)  resupply capital to primary lenders by guaranteeing repayment of pools of mortgage loans. 
B)  insure loans made by primary government lenders. 
C)  sell mortgage pools to money market funds. 
D)  facilitate the resale of mortgage loans by marketing participation certificates.

Question 8

Freddie Mac's Loan ____________________ program made available on the Internet overhauled the entire loan underwriting system.

Accepted Answer

The answer of Freddie Mac's Loan ____________________ program made available...

Question 9

GNMA buys loans from primary market loan originators.

Accepted Answer

A) True 
 B)False

Question 10

Freddie Mac buys loans only from savings and loan institutions.

Accepted Answer

A) True 
 B)False

Question 11

The money used by the secondary market to purchase loans comes from deposits in institutions.

Accepted Answer

A) True 
 B)False

Question 12

The entity that purchases the most loans in the secondary market is

Accepted Answer

A)  FNMA. 
B)  FHLMC. 
C)  HUD. 
D)  GNMA. 
A)  FNMA. 
B)  FHLMC. 
C)  HUD. 
D)  GNMA.

Question 13

The ____________________ market is where lenders originate loans by making funds available to borrowers.

Accepted Answer

The answer of The ____________________ market is where lenders originate...

Question 14

Choose the one most appropriate answer for each.
-originating loans through the use of a networked computer system

Accepted Answer

A) alienation clause 
B) automated underwriting systems 
C) computerized loan origination 
D) disintermediation 
E) due-on-sale clause
F)Fannie Mae
G)Farmer Mac
H)Fiat money
I)FIRREA
J)Freddie Mac
K)Ginnie Mae
L)mortgage broker
M)mortgage company
N)mortgage-backed securities
O)municipal bonds
P)participation certificates
Q)prepayment penalty
R)primary market
S)secondary mortgage market
T)usury 
A) alienation clause 
B) automated underwriting systems 
C) computerized loan origination 
D) disintermediation 
E) due-on-sale clause
F)Fannie Mae
G)Farmer Mac
H)Fiat money
I)FIRREA
J)Freddie Mac
K)Ginnie Mae
L)mortgage broker
M)mortgage company
N)mortgage-backed securities
O)municipal bonds
P)participation certificates
Q)prepayment penalty
R)primary market
S)secondary mortgage market
T)usury

Question 15

Participation Certificates (PCs)are instruments used by

Accepted Answer

A)  GNMA. 
B)  FNMA. 
C)  FHLMC. 
D)  Farmer Mac. 
A)  GNMA. 
B)  FNMA. 
C)  FHLMC. 
D)  Farmer Mac.

Question 16

One may find financing for a single family dwelling at all of the following EXCEPT

Accepted Answer

A)  savings and loans. 
B)  commercial banks. 
C)  insurance companies. 
D)  mortgage bankers. 
A)  savings and loans. 
B)  commercial banks. 
C)  insurance companies. 
D)  mortgage bankers.

Question 17

Most loans contain a due-on-sale clause which is also called a call clause or a(n)____________________ clause.

Accepted Answer

The answer of Most loans contain a due-on-sale clause which...

Question 18

Other lenders providing mortgage money might include

Accepted Answer

A)  pension and trust funds. 
B)  credit unions. 
C)  commercial finance companies. 
D)  all of the above. 
A)  pension and trust funds. 
B)  credit unions. 
C)  commercial finance companies. 
D)  all of the above.

Question 19

Mortgage ____________________ do not lend their own money but simply put lender and borrower together.

Accepted Answer

The answer of Mortgage ____________________ do not lend their own...

Question 20

Which of the following are designed to prevent disintermediation?

Accepted Answer

A)  Adjustable rate mortgages 
B)  Secondary mortgage markets 
C)  Pass-through certificates 
D)  Certificates of deposit 
A)  Adjustable rate mortgages 
B)  Secondary mortgage markets 
C)  Pass-through certificates 
D)  Certificates of deposit

Exam 12: Sources of Financing

The cost of mortgage loan borrowing is dependent on the cost of money to the lender, reserves for default, loan servicing costs, and available investment alternatives.

Choose the one most appropriate answer for each. -requires immediate repayment of a loan if ownership transfers;also called a due-on-sale clause

The secondary mortgage market is an area of activity in which

Mortgage brokers do not lend their own money but simply put lender and borrower together.

Automated underwriting systems have dramatically overhauled the mortgage loan underwriting process.

Which of the following specializes in making loans and reselling them?

The basic role of the GNMA is to

Freddie Mac's Loan ____________________ program made available on the Internet overhauled the entire loan underwriting system.

GNMA buys loans from primary market loan originators.

Freddie Mac buys loans only from savings and loan institutions.

The money used by the secondary market to purchase loans comes from deposits in institutions.

The entity that purchases the most loans in the secondary market is

The ____________________ market is where lenders originate loans by making funds available to borrowers.

Choose the one most appropriate answer for each. -originating loans through the use of a networked computer system

Participation Certificates (PCs)are instruments used by

One may find financing for a single family dwelling at all of the following EXCEPT

Most loans contain a due-on-sale clause which is also called a call clause or a(n)____________________ clause.

Other lenders providing mortgage money might include

Mortgage ____________________ do not lend their own money but simply put lender and borrower together.

Which of the following are designed to prevent disintermediation?

Nature and Description of Real Estate

Rights and Interests in Land

Forms of Ownership

Transferring Title

Recordation Abstracts and Title Insurance

Contract Law

Real Estate Sales Contracts

Mortgage and Note

Deed of Trust

Lending Practices

The Loan and the Consumer

Types of Financing

Taxes and Assessments

Title Closing and Escrow

Real Estate Leases

Real Estate Appraisal

Licensing Laws and Professional Affiliation

The Principal-Broker Relationship: Employment

The Principal-Broker Relationship: Agency

Fair Housing, Ada, Equal Credit, and Community Reinvestment

Condominiums, Cooperatives, Puds, and Timeshares

Property Insurance

Land-Use Control

Real Estate and the Economy

Investing in Real Estate

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