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52 Multiple choice questions

  1. Reduction in value based upon factors related to the property's location
  2. The agent discloses that it is not an appraisal
  3. The organization that guarantees loans up to 100% LTV to qualified veterans
  4. 15. Which of the following takes into account recently sold similar properties and expired listings?
    A. CMA
    B. Cost approach
    C. Income approach
    D. Sales comparison approach
  5. The most important method for appraising unique or special-purpose properties
  6. 17. A person applies for a mortgage loan at a mortgage broker's office. The loan originator did not give the loan applicant a Loan Estimate or information booklet at the time of loan application. Which statement is TRUE regarding this situation?
    A. The loan originator can ignore the situation because mortgage brokers are exempt from RESPA
    B. The loan originator violated the federal fair housing act
    C. the loan originator has three business days to give the loan applicant a loan estimate and a copy of the settlement information booklet
    D. The applicant may take legal action against the mortgage broker for malpractice
  7. A lender uses a short-term loan from a commercial bank to fund its loan commitments
  8. The clause in both FHA and VA loans that allows the applicant to cancel the agreement in the loan cannot be obtained
  9. comparable sales
  10. 29. The legal, possible, financially feasible use of a property with the maximum utility is its:
    A. market value
    B. highest and best use
    C. zoning classification
    D. habendum
  11. Sales comparison approach
  12. 12. Servicing the mortgage refers to:
    A. providing customer service at a bank
    B. opening a home equity account
    C. payment collection and record keeping related to the loan
    D. sending a monthly check to a lien holder
  13. The federal department that oversees the secondary mortgage market, FHA, VA and fair housing laws
  14. The uniform settlement statements required by the Real Estate Settlement Procedures Act
  15. 27. While performing the cost approach to estimate the value of a rural residential property, the appraiser would NOT:
    A. assign an amount of depreciation to the land
    B. estimate the cost to build new
    C. deduct for physical deterioration
    D. deduct accrued depreciation from the cost to build new
  16. Regulation Z
  17. 28. Which is an INCORRECT statement regarding FHA and VA mortgages:
    A. FHA and VA lenders may NOT charge a prepayment penalty
    B. FHA and VA mortgages are assumable
    C. FHA insures mortgages; VA mortgages are guaranteed by the government
    D. Sellers may NOT pay closing costs if the buyer finances via FHA or VA
  18. The market where mortgages are purchased from primary lenders to supplement the mortgage and lending process
  19. Reduction in value due to locational factors
  20. The highest price in terms of cash or its equivalent that a willing buyer would pay and a willing seller would accept
  21. 24. If the Federal Reserve votes to lower the discount rate, how will this likely affect interest rates on short-term credit?
    A. Short-term rates will likely increase
    B. Short-term rates will likely decrease
    C. There will likely be no effect on short-term rates because the discount rate affects mortgage rates only
    D. There will likely be no effect on short-term rates because the discount rate is charged directly to lenders
  22. incurable functional obsolescence
  23. A uniform measure of the cost of credit that includes interest and finance charges
  24. The law that requires disclosures of loan terms and costs, including APR
  25. 21. The borrower has the right to cancel a home equity line of credit:
    A. never
    B. within three business days
    C. within 10 days
    D. up to one month after closing
  26. 23. Financial middlemen have consolidated many small savings accounts belonging to individual depositors and investing those funds in large, diversified projects. This is:
    A. disintermediation
    B. intermediation
    C. remediation
    D. depreciation
  27. The method of estimating reproduction cost through information contained in a published cost manual
  28. 30. A transaction between two unrelated parties is known as:
    A. arm's-length
    B. lease-option
    C. exclusive-agency
    D.transaction-broker
  29. 14. Exchange value is:
    A. the cost to trade housing units
    B. the price at which most buyers would trade money for real estate, goods or services
    C. the average closing costs
    D. the business cost of accepting the exchange of retail items
  30. 20. The law that requires the disclosure of settlement costs and requires the settlement agent to use the Closing Disclosure or HUD-1 is:
    A. Regulation Z
    B. Federal Fair Housing Act
    C. Real Estate Settlement Procedures Act (RESPA)
    D. Uniform Closing Standards Act
  31. The cost to build a replica with the same or highly similar materials
  32. Cost approach
  33. 10. Which of the following is true about conventional, VA and FHA loans?
    A. Interest rates are set by the market based on supply and demand
    B. Conventional loans MUST have a higher interest rate than FHA or VA loans
    C. Conventional, VA, and FHA loans are all insured or guaranteed through the government
    D. Fannie Mae and Freddie Mac give FHA and VA loans
  34. 11. A Comparable property recently sold for $210,000. Compared with the subject property, the comparable is built of superior materials valued at $10,000. The comparable also has less square footage than the subject property, valued at $15,000. What is the adjusted sale price of the comparable?
    A. $185,000
    B. $205,000
    C. $215,000
    D. $235,000
  35. 25. What agency has the power to control the supply of money, the cost to borrow money, and the availability and cost of credit?
    A. HUD
    B. FHA
    C. Federal Reserve
    D. Congress
  36. 13. The comparative square-foot method of estimating reproduction cost relies upon published cost manuals to adjust for:
    A. different geographic areas
    B. marginal utility
    C. time on the market
    D. deterioration
  37. An informal estimate of market value performed by a real estate licensee to assist in arriving at an appropriate price
  38. Formerly known as the Federal Home Loan Mortgage Corporation, this government-sponsored enterprise provides liquidity to the mortgage market
  39. The approach to value in which similar properties that have recently sold are compared to the subject property
  40. 18. Which type of loan is MOST likely to be assumable by a qualified buyer?
    A. VA or FHA
    B. conventional
    C. blanket
    D. insured conventional
  41. 22. Monetary policy set by the Federal Reserve is designed to influence:
    A. the availability and cost of money and credit
    B. judicial overview
    C. leverage
    D. social influences
  42. A formal estimate or opinion of value supported by an analysis of relevant property data
  43. 16. A home has outdated electric service and faulty plumbing. Which type of depreciation will the appraiser likely consider?
    A. physical deterioration
    B. functional obsolescence
    C. curable external obsolescence
    D. incurable economic obsolescence
  44. 26. Which would be an INCORRECT statement about characteristics of real estate?
    A. the geographic location is fixed
    B. the market is fluid and can respond quickly to changes in supply and demand
    C. each parcel is unique
    D. government controls have an impact on the real estate market
  45. 19. When used in credit advertising by a real estate licensee, the phrase "Owner will finance" is:
    A. a violation of fair housing laws
    B. perfectly legal
    C. a trigger term requiring full disclosure
    D. an act of fraud or misrepresentation
  46. Adjust the comparable up or down to the subject
  47. The law that created standardized closing practices on federally related residential loans
  48. The process of loan correspondents collecting payments, disbursing taxes and insurance and keeping records on behalf of the mortgage holder
  49. A loss in value due to wear and tear
  50. The cost to replace improvements with others of similar quality but that are not an exact replica
  51. The government organization that provides mortgage default insurance on loans from approved leaders to qualified borrowers
  52. market value is the price a property will likely be sold for and assessed value is for ad valorem taxes