REE4204 FINAL EXAM QUESTIONS WITH REVISED ANSWERS – UPDATED!!
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Course
REE4204
Institution
REE4204
REE4204 FINAL EXAM QUESTIONS WITH REVISED ANSWERS – UPDATED!!
Which of the following ratios on the borrower is LEAST important in the underwriting process? - Answer-Current ratio or quick ratio
The due-on-sale clause in a promissory note stipulates - Answer-The entire loan balance must be r...
REE4204 FINAL EXAM QUESTIONS
WITH REVISED ANSWERS –
UPDATED!!
Which of the following ratios on the borrower is LEAST important in the underwriting
process? - Answer-Current ratio or quick ratio
The due-on-sale clause in a promissory note stipulates - Answer-The entire loan
balance must be repaid when the property is sold
Which of the following is FALSE concerning Mortgage-backed bonds (MBB)? - Answer-
Maturity is not fixed at issuance
Which of the following contribute to protecting the mortgage investors against default
risk? - Answer--Property hazard insurance and title insurance
-Mortgage insurance and loan guarantee
-Standardized underwriting processes
Which of the following is a guarantee of GNMA (Ginnie Mae)? - Answer-Timely
payments of principle and interest
Which of the following is true about CMO's - Answer-All the principal payments are
passed-through to investors at the highest class at the time.
The residual method pf mortgage underwriting is used by which of the loan programs? -
Answer-VA loans
In a lending transaction between the lender and the borrower, which of the following is
TRUE? - Answer-The borrower signs both the promissory note and the mortgage in
order to receive money from the lender
A mortgage applicant makes $6,000 gross income per month. The bank estimated the
conventional loan requires monthly payment of $1160, plus $400 per month escrow
toward property tax and insurance. The borrower currently has no other debt except a
car loan payment of $510 per month and he lives in florida so there is no state and local
income tax. Assuming his credit record and other aspects are all satisfactory, which of
the following is likely the underwriting conclusion based on these numbers? - Answer-
He qualifies for the loan only if he can afford more than 5% of down payment
FHA mortgage insurance - Answer-None of the above
Which of the following statements is TRUE? - Answer-The maximum loan amount of a
conventional loan is about $417,000 in most countries
A house is financed with conventional at 95% loan to value ratio. Therefore a private
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