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ROCKWELL FUNDAMENTALS EXAM QUESTIONS AND ANSWERS
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ROCKWELL FUNDAMENTALS EXAM QUESTIONS AND ANSWERS
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Name: Score:127 Multiple choice questions
Term 1 of 127
Which of the following clauses relates to a mortgage loan default and requires immediate
payment of the debt?
A-Federal Housing Administration
B-Mortgage banking company
C-Mortgage broker
D-veterans administration
A-dominant estate
B=servient estate
C-encroachment
D-license
C- Alienation
Hence, "lost" means that you don't have title anymore; it's the most in close term for all
the various ways that you could find yourself without a property you once owned. Loss
of title could occur because you voluntarily transferred it, or it was involuntarily
transferred...
A-Subordination clause
B-Acceleration clause
C-Writ clause
D-Safety clause
,Term 2 of 127
Rudiger purchases a home for $200,000, and receives an 80% loan from his bank. He has to
pay three discount points to receive the loan. He is also responsible for a 1% origination fee
and a $300 appraisal. The seller paid a 6% commission to the listing brokerage. What is the
amount of the discount points that he paid?
C- Yes, because easement of this type runs with the land rather than the individual
Easements ordinarily need to be in writing and recorded in order to run with the land,
but if the use is apparent an easement can run with the land even if it is not recorded. In
any case, the owner of the landlocked property is always entitled to an access
easement, so C is the best answer here.
$4800
TO calculate the discount points, first find the loan amount ($200, 000 x 80% = $160,000).
Then multiply that by the percentage of the loan represented by the discount points
($160,000 x 3% = $4800). Since the question only specified discount points, you would
not include the origination fee in your calculations (and you wouldn't need to know the
cost of the appraisal or the commission.)
Income.
If comparable sales aren't available and the accrued depreciation is difficult to estimate
(which is generally true for older properties) but the date necessary to use the income
approach are available, then it's appropriate to use the income approach.
$260,000
Start by adding the desired net and the other costs, including the mortgage.
60,000+181,800= 241,800
Subtract the commission percentage from 100%. (93%), and then divide the total by that
percentage.
Term 3 of 127
An increasingly common land use pattern allows for subdivisions with smaller lot lines and
littler or no setback and sideyard requirements while keeping the same density ratios. There
are known as:
A- downzoning
B- planned unit developments
C-horizontal property divisions
D- spot zoning
,Term 4 of 127
A homeowner with a mortgage sells his home to a purchaser who agrees to assume the
mortgage. The purchaser applies for and obtains the lenders approval, and the seller is
released from liability for the mortgage. This is an example of:
A- assignment
B-subrogation
C-subordination
D-novation
Term 5 of 127
A mortgage often includes a clause requiring the lenders consent before another borrower
may assume the mortgage. This clause is called a:
Sales comparison.
Not income, income approach is used for properties that are oriented toward generating
income for the property's owner.
B- Planned unit developments
A planned unit development is a subdivision where lot sizes are smaller and dwellings
are grouped closer together, and there are signifiant amounts of open space.
Alienation clause (DUE ON SALE CLAUSE.)
An alienation clause prevents assumption without the lenders consent by stipulating that
the loan balance is dean payable in full if the property is sold.
Will be automatically transferred (conveyed) to Kim and Diane.
Joint tenancy includes the right of survivorship, so when one tenant dies, titles passes to
the remaining tenants automatically.
, Term 6 of 127
A property manage increases an apartment buildings $3000 monthly income by an additional
$500 a month. The cap rate is 8%. What is the increase in the property's value?
D- No disclosure, because the land is agriculture.
TILA disclosure requirements do not apply for business, commercial, or agricultural
loans.
$2500
Buyer is responsible for property taxes for the remains FIVE MONTHS of the year.
(includes August.)
P=Wx%
Find annual rate- 3000x12= 36000 36000=450000x8%
New annual rate- 3500x12= 42000 42000=525000x8%
525000-450000=75000
$1080
In a triple net lease, the tenant pays the operating expenses (maintenance costs, taxes
and insurance) in addition to base rent and in some cases percentage rent. First,
calculate the rent paid each year.
Then calculate the commission amount.
Term 7 of 127
Which of the following is the proper method for determining the gross income multiplier?
A-divide monthly income by sales price
B-divide annual income by sales price
C-divide sales price by gross income
D-divide assessed value by gross income
D- Seller is prohibited from choosing a title insurance company for the buyer
B-Mortgage Banking company
A mortgage banker is a primary market lender, meaning that it originates loans directly
to property buyers.
Property management trust funds are exempt. The pooled interest bearing account
requirement applies to earnest money deposits of $10,000 or less.
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