CHAMPIONS SCHOOL OF REAL ESTATE FINANCE EXAM LATEST
200 QUESTIONS AND CORRECT DETAILED SOLUTIONS 2024-
2025 UPDATE JUST RELEASED
QUESTION: The process of creating a new mortgage loan, including all steps taken by a lender
to attract and qualify a borrower are _____. - ANSWER-Origination activities
QUESTION: The process of evaluating a borrower's loan application to determine the risk
involved for the lender is - ANSWER-Underwriting
QUESTION: Which of the following Federal Fair Housing statues prohibit housing discrimination
- ANSWER-National Origin
QUESTION: All residential mortgage loan originators must now be registered with the ______. -
ANSWER-Nationwide Mortgage Licensing System and Registry (NMLSR)
QUESTION: A young couple would like to buy a rundown house, with a high credit score, but the
lender refuses to sell in that location. What is the lender guilty of? - ANSWER-Redlining under
the Community Reinvestment Act (CRA)
QUESTION: The ______ prohibits Redlining. - ANSWER-Community Reinvestment Act
QUESTION: The state of Texas plays a role in affordable housing through the _______. -
ANSWER-The Texas Department of Housing and Community Affairs (TDHCA)
QUESTION: To participate in the Texas Veterans Loan Board Program a veteran can obtain any
of these loans:
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A. VA
B. FHA
C. Conventional
D. All of the above - ANSWER-D. All of the above
QUESTION: Eligible borrower under the VLB Veterans Housing Assistance Program (VHAP)
include:
A. Disabled
B. Texas Born/ Native
C. Honorable and Dishonorably discharged
D. Surviving spouses of Texas veterans - ANSWER-D. Surviving spouses of Texas Veterans
QUESTION: How many days according to the Truth in Lending disclosure when must the buyer
receive the Closing Disclosure (CD) from the lender? - ANSWER-Three business days before the
customer closes the loan.
QUESTION: _______ was established in 1970 for the purpose of purchasing mortgages in the
Secondary Market. - ANSWER-Freddie Mac
QUESTION: A claim, lien, charge, or liability attached to and binding real property is an -
ANSWER-encumbrance
QUESTION: A ______ is a right given by law to creditors to have debts paid out of the property
of a defaulting debater. - ANSWER-Lien
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QUESTION: A mortgage is a pledge of real estate as security for repayment of debt in which the
borrow is known as ______ - ANSWER-Mortgagor
QUESTION: Which of the following is a lender? - ANSWER-Morgagee
QUESTION: Which of the following contains the borrowers personal promise to pay a debt? -
ANSWER-The note
QUESTION: When a property is foreclosed and sold at an auction for less that what is owed, the
lender may sue the borrower for a _____. - ANSWER-Deficiency Judgement
QUESTION: A borrower under the deed of trust .... proceed exceeded $5,000, who is entitled to
the $5,000? - ANSWER-The debtor, borrower, mortgagor
QUESTION: In a contract for deed transaction, when does the borrower receive the deed? -
ANSWER-When the final loan payment is made.
QUESTION: A second mortgage is ______ to the first mortgage. - ANSWER-Subordinate
QUESTION: A ______ clause gives the borrower the ability to replace the primary instrument
with another without affecting the position of the subordinate instrument. - ANSWER-Lifting
QUESTION: Which clause in a mortgage allows a lender to move to or take a secondary lien -
ANSWER-Subordinate clause
QUESTION: "HOUSE" When calculating the monthly payment the lender will add - ANSWER-
1/12th of the annual taxes and insurance
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QUESTION: What do commercial banks, credit unions and mortgage companies have in
common? - ANSWER-All components of the primary mortgage market
QUESTION: The ____ is where borrowers and mortgage lenders come together to create and
negotiate terms of a mortgage transaction - ANSWER-The primary market
QUESTION: A portfolio loan is ____. - ANSWER-A loan not sold into the secondary market but
retained by the lender
QUESTION: _____ bonds are sold by government entities to fund major capital investments -
ANSWER-Municipal Bonds
QUESTION: Seller financing = - ANSWER-takeback, carry back
QUESTION: A point is ___% of the loan amount - ANSWER-One
QUESTION: An amortizing loan is .... - ANSWER-A loan with payments that includes both the
principle and interest
QUESTION: A buyer is interested in buying a home. Interest are forecasted to go down in the
next few months, what type of loan should he secure? - ANSWER-An ARM Loan
QUESTION: In an ARM loan the index_____ - ANSWER-Varies with fluctuation in the Financial
Market
QUESTION: The fixed rate charge on an adjustable rate mortgage until the first adjustment date
- ANSWER-Initial rate
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