TN Real Estate Principles Unit 22 – Flashcards

A buyer is obtaining a loan in the amount of $184,000 at 5 percent interest. Escrow will close on June 15 and the first mortgage payment is due on August 1. At closing, the buyer will be charged A) $383.40. B) $408.96. C) $403.20. D) $378.00.

The annual real estate taxes on a property amount to $1,800. The seller has paid the taxes in advance for the calendar year. If the closing is set for June 15, which statement is TRUE? A) Credit the seller $825; debit the buyer $975. B) Credit the seller $975; debit the buyer $975. C) Credit the buyer $975; debit the seller $975. D) Credit the seller $1,800; debit the buyer $825.

The only fee that the lender may collect before the applicant receives the good-faith estimate (GFE) is for A) an appraisal. B) the lender's processing services. C) the lender's underwriting fee. D) a credit report.

Information about the exact location and size of the property is obtained through a A) title search. B) agent's diligent visual inspection. C) survey. D) property inspection.

The Real Estate Settlement Procedures Act (RESPA) does NOT prohibit A) fees for settlements services performed. B) lenders from requiring excessive escrow account deposits, money set aside to insure the payment of taxes, hazard insurance, and other charges related to the property. C) fee-splitting for referrals of settlement services. D) homesellers from requiring that homebuyers buy title insurance from a particular company.

A building was purchased for $85,000, with 10 percent down and a loan for the balance. If the lender charged the buyer two discount points, how much cash did the buyer need at closing if the buyer incurred no other costs? A) $10,200 B) $8,500 C) $1,700 D) $10,030

Accrued interest on an assumed mortgage loan is entered on the closing statement as a A) credit to the seller and a debit to the buyer. B) debit to both the seller and the buyer. C) debit to the seller and a credit to the buyer. D) credit to both the seller and the buyer.

An informational booklet prepared by HUD must be given to the borrower, under RESPA, at the time of application or provided A) prior to closing. B) prior to signing loan documents. C) within seven days of loan application. D) within three days of loan application.

Which item would a lender generally require at the closing? A) Application B) Title insurance commitment C) Market value appraisal D) Credit report

A mortgage reduction certificate is executed by a(n) A) attorney. B) lending institution. C) abstract company. D) grantor.

The closing agent will deduct the balance due on the seller's loan at closing plus any accrued interest. The unpaid balance is $115,400 with a rate of 7 percent. Based on a closing date of June 15 the amount deducted will be A) $123,478.00. B) $115,759.02. C) $115,736.60. D) $115,731.95.

The sale price of a property is $230,000. Transfer tax to be paid by the seller at closing, based on $0.50 per $500, will be A) $230.00. B) $134.17. C) $95.80. D) $124.83.

The Uniform Settlement Statement must be used to illustrate all settlement charges for A) residential transactions financed by federally related mortgage loans. B) all transactions involving commercial property. C) transactions financed by VA and FHA loans only. D) every real estate transaction.

The principal balance on an assumed mortgage loan is entered on the closing statement as a A) credit to the seller and a debit to the buyer. B) credit to both the seller and the buyer. C) debit to both the seller and the buyer. D) debit to the seller and a credit to the buyer.

The For Your Protection, Get a Home Inspection pamphlet is required only for A) VA loans. B) Freddie Mac loans. C) Fannie Mae loans. D) FHA loans.

Fees charged by participants in a controlled business arrangement (CBA) to meet RESPA requirements must be reasonably related to the value of the services provided and A) may include fees exchanged among the affiliated companies for referring business to one another. B) may include fees exchanged among the affiliated companies for referring business to one another, providing such fees are not excessive. C) require no additional disclosure as to the ownership relationship between the providers. D) not be fees exchanged among the affiliated companies simply for referring business to one another.

Real estate property taxes will be prorated at closing and are $3,450 annually. If escrow closes June 15 and taxes for the year have not yet been paid, A) the buyer receives a credit of $1,437.50. B) the seller receives a credit of $1,581.20. C) the buyer receives a credit of $1,581.20. D) the seller receives a credit of $1,437.50.

The Real Estate Settlement Procedures Act (RESPA) permits a controlled business arrangement (CBA) A) as long as a consumer is clearly informed of the relationship among the service providers. B) as long as a consumer is informed that the possibility of such a relationship may be possible. C) and requires no written disclosure, provided that fees charged by the participants are not excessive and are for services typically performed. D) and requires no disclosure to the consumer except that a CBA exists without identifying the participants.

The Real Estate Settlement Procedures Act (RESPA) is a federal statute administered by the A) Department of Housing and Urban Development (HUD). B) Office of the U.S. Attorney General. C) Department of Veterans Affairs (VA). D) Federal Trade Commission (FTC).

Real Estate Settlement Procedures Act (RESPA) regulations apply to first-lien mortgage loans made to finance the purchase of A) one- to four-family homes and condominiums. B) one- to four-family homes, condominiums, and commercial properties. C) one- to four-family homes, cooperatives, condominiums, and commercial properties. D) one- to four-family homes, cooperatives, and condominiums.

Security deposits should be listed on a closing statement as a credit to the A) broker. B) seller. C) buyer. D) lender