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WASHINGTON REAL ESTATE AMP QUESTIONS AND ANSWERS
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WASHINGTON REAL ESTATE AMP QUESTIONS AND ANSWERS
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WASHINGTON REAL ESTATE AMP QUESTIONS ANDANSWERS
Chapter 1 -Loans
Which is not correct regarding the reserve amount?
A) the amount of money the Federal Reserve requires lenders to hold in reserve
B) reserve amounts may be used by the lender
C) reserves must remain in a special account
D) reserves are regulated by the Federal Reserve - Answers-B) reserve amounts may
be used by the lender
Feedback:
Correct: The reserve account helps keep the economy stable by controlling the money
supply.
Bob noticed that there was a lien recorded against his property at the County Auditor's
Office. More than likely the lien is a:
A) a license issued by Bob for the neighbor to use a foot path
B) a restrictive covenant recorded by the subdivision
C) the mortgage that he signed for with his lender
D) an easement in gross required by his local utility - Answers-C) the mortgage that he
signed for with his lender
Feedback:
Correct: A lien is a monetary requirement recorded against property. This would be a
mortgage. License and an easement would be a "use" interest.
Who determines how much money will be printed by the Treasury Department?
A) Treasury Department
B) National Banking Commission
C) Federal Reserve
D) Congress - Answers-C) Federal Reserve
Feedback:
Correct: The "Fed" or the Federal Reserve determines how much money is to be
printed.
An oversupply of money can cause:
A) inflation
B) recession
C) deflation
D) bonds prices to inflate - Answers-A) inflation
,Feedback:
Correct: Selling bonds takes money out of the economy. An oversupply of money can
cause inflation.
Tom is upset because he heard he has a non-conventional loan. He can't understand
why because he is working with a lender. Which of the following answers is probably the
case?
A) Tom's credit rating is lower than normal and he has to pay a higher interest rate
B) the involved lender is not Federally insured
C) Tom obtained a VA loan because of his service in the Army
D) the lender is requiring Tom to pay taxes and insurance premium on a monthly basis -
Answers-C) Tom obtained a VA loan because of his service in the Army
Feedback:
Correct: A nonconventional loan is one that is insured or guaranteed by the Federal
government. Tom's VA loan guarantees the lender that a loss will not occur if Tom
defaults on payment.
In establishing a deed of trust/trust deed as a lien against property, the lender would be
which of the following?
A) the third-party trustee handling payments on behalf of the owner
B) the beneficiary of the trust deed
C) the trustor who is responsible for payments
D) all the above - Answers-B) the beneficiary of the trust deed
Feedback:
Correct: With a trust deed lien, a third-party trustee is the go-between the owner/trustor
and the lender/beneficiary. The lender is the beneficiary receiving payments from the
trustee. Tom pays the trustee and the trustee pays the beneficiary/lender.
The type of funds that looks to invest in fixed interest mortgages and relatively safe
investments are:
A) credit union loans
B) pension funds
C) high yield stocks
D) none of these - Answers-B) pension funds
Feedback:
Correct: Pension funds look for investments that are reasonably safe for their pension
participants.
Which of the following lender specializes in long term, single-family home loans as well
as non-conventional loans?
A) commercial banks
B) savings and loans
C) mutual savings banks
, D) insurance companies - Answers-B) savings and loans
Feedback:
Correct: Savings and Loans issue both conventional and non-conventional loans.
What is the major difference between a mortgage banker and a mortgage broker?
A) the mortgage broker originates loans and the mortgage banker finds the best deal
program for their customers
B) the mortgage broker finds the best debt program for their buying customers and
brings borrowers and lenders together. The mortgage banker originates loans and puts
them into packaged programs and sells the packages in the open market. - Answers-B)
the mortgage broker finds the best debt program for their buying customers and brings
borrowers and lenders together. The mortgage banker originates loans and puts them
into packaged programs and sells the packages in the open market.
Feedback:
Correct: The mortgage banker originates the loan and puts them in a packages for the
open market. Their buyers include Fannie Mae and Freddie Mac as well as Wall Street
firms. The mortgage broker keeps informed of the lending industry. They bring
borrowers and lenders together by putting together individual mortgage programs. In
return they receive a percentage commission based on the percentage of the money
borrowed.
When working with a lender for a loan, which of the following would be the unique
application requirement of a credit union?
A) the applicant would need to obtain a "paid for" credit report
B) the applicant would have to purchase a title policy on behalf of the lender
C) the applicant wouldn't need a cosigner
D) the applicant would have to join the credit union - Answers-D) the applicant would
have to join the credit union
Feedback:
Correct: All lenders will require a credit report and title insurance. Few lenders would
require a co-signer. Some credit unions will require an applicant to join the credit union.
The Federal Reserve was created to keep the economy stable by controlling:
A) the money supply within the economy
B) availability of credit within the US
C) both statements are correct
D) neither statement is correct - Answers-C) both statements are correct
Feedback:
Correct: The Federal Reserve, commonly referred to as the Fed, was designed to keep
the economy stable by controlling the money supply and the available credit within the
United States.
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