Quiz #21

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Question 1 of 25

1. Question
The conditions of an escrow agreement cannot be met and the related transaction cannot be completed. In such a case, the escrow agent
- Levies a fine against the defaulting party.
- Assigns his or her fiduciary responsibilities to the seller's broker.
- Returns funds to the buyer.
- Cancels the sale contract and destroys the transaction documents.
Question 2 of 25

2. Question
To avoid violating the Real Estate Settlement Procedures Act, parties who are providing services to the buyer or seller in a transaction must
- Be paid before the closing date for any service they provide.
- Inform the closing agent of the cost of their services at least one week before the closing date.
- Receive payment only from the funds held in escrow, not directly from buyer or seller.
- Disclose in writing any business relationships they have with other parties involved in the transaction.
Question 3 of 25

3. Question
A certain item is to be prorated between a buyer and seller. If no outside party is concerned, which of the following statements is true?
- The item must be prorated and recorded as a debit to one party and a credit to the other party for the same amount.
- The item must be prorated and recorded as a debit to one party; the reaminder is recorded as a credit to the other party.
- The party who is owed money receives a credit for the entire item and a debit for the prorated amount.
- The party who owes money receives a debit for the portion owed and a credit for the portion that is not owed.
Question 4 of 25

4. Question
An item is said to be paid in arrears if it is normally paid
- On a monthly or yearly basis.
- At some time after the expense is incurred.
- Only after it is billed.
- Whenever it is incurred.
Question 5 of 25

5. Question
A certain item is to be prorated between a buyer and seller. If no outside party is concerned, which of the following statements is true?
- The item must be prorated and recorded as a debit to one party and a credit to the other party for the same amount.
- The item must be prorated and recorded as a debit to one party; the reaminder is recorded as a credit to the other party.
- The party who is owed money receives a credit for the entire item and a debit for the prorated amount.
- The party who owes money receives a debit for the portion owed and a credit for the portion that is not owed.
Question 6 of 25

6. Question
A seller received a rental payment of $900 in advance. At closing, the seller has earned only $320 of this rent. What should appear on the closing statement?
- A debit to the seller and credit to the buyer for $320.
- A debit to the seller for $580 and credit to the buyer for $320.
- A debit to the seller for $320 and a credit to the buyer for $900.
- A debit to the seller and credit to the buyer for $580.
Question 7 of 25

7. Question
A buyer will receive a water bill for an estimated $100 at the end of the month. At closing, the seller has used an estimated $43 in water. What should appear on the closing statement?
- A debit to the seller and credit to the buyer for $57.
- A debit to the seller and a credit to the buyer for $43.
- A debit to the buyer and credit to the seller for $57.
- Whenever it is incurred.
Question 8 of 25

8. Question
Which of the following does the RESPA Act establish ?
- Protects borrowers from unnecessarily expensive settlement charges
- Ensures borrowers are provided with more information in a timely manner
- Eliminates referral fees or kickbacks
- All of these
Question 9 of 25

9. Question
Choose the term that best fits the definition: All escrow account deposits and payments during the servicer’s computation year
- Annual escrow statement
- Initial escrow statement
- HUD-1 settlement statement
- Servicing transfer statement
Question 10 of 25

10. Question
Which of the following is one of the requirements that lenders are required to meet within the first three days of receiving a mortgage loan application?
- Good Faith Estimate
- Mortgage Statement Referral
- Consumer Financial Protection Video
- Good Faith Clause
Question 11 of 25

11. Question
According to RESPA, what does a Consumer Financial Protection Bureau booklet describe?
- it describes how to avoid pitfalls and handle problems when closing on a property
- It describes the locations of different places that acustomer could find lenders
- It describes how to respond to offer letters from prospective buyers
- None of the above
Question 12 of 25

12. Question
According to RESPA, What is a Mortgage Servicing Disclosure Statement?
- it discloses whether the lender will service the loan
- it discloses whether a property has been paid off in the past
- It discloses whether a property has any repairs that would be included in the mortgage
- none of these
Question 13 of 25

13. Question
What Does RESPA stand for?
- Real Estate Settlement Procedures Act
- Real Estate Statement Procedure Act
- Real Estate Statement Processing Act
- Real Estate Settlement Processing Act
Question 14 of 25

14. Question
The new RESPA rule is
- All will apply
- It will make it easy and improve the process of obtaining mortgages and lower consumer settlement costs
- HUD will require the lenders and mortgage brokers provide consumers with a Good Faith Estimate
- It is estimated that HUD will save consumers about $700 at the closing table
Question 15 of 25

15. Question
The HUD-1 Settlement Statement is a form
- That shows the charges imposed on borrowers and sellers with connection to the settlement
- Both C&D
- That itemizes the estimated taxes, Insurance premiums and other charges
- That summarizes all escrow account deposits and payments during the servicer's computation year (12 months).
Question 16 of 25

16. Question
The RESPA act establishes
- Eliminates referral fees or kickbacks
- Protects borrowers from unnecessarily expensive settlement charges
- Ensures borrowers are provided with more information in a timely manner
- All of these
Question 17 of 25

17. Question
RESPA is an acronym for
- Real Estate Statement Processing Act
- Real Estate Settlement Processing Act
- Real Estate Settlement Procedures Act
- Real Estate Statement Procedure Act
Question 18 of 25

18. Question
What is the New RESPA Rule
- It will make it easy and improve the process of obtaining mortgages and lower consumer settlement costs
- HUD will require the lenders and mortgage brokers provide consumers with a Good Faith Estimate
- It is estimated that HUD will save consumers about $700 at the closing table
- All of these
Question 19 of 25

19. Question
Which defines what the HUD-1 Settlement Statement
- Both B&C
- That itemizes the estimated taxes, Insurance premiums and other charges
- That summarizes all escrow account deposits and payments during the servicer's computation year (12 months).
- That shows the charges imposed on borrowers and sellers with connection to the settlement
Question 20 of 25

20. Question
Two parties enter into a contract for deed agreement. In this form of agreement
- the buyer contracts to pay all cash at closing in exchange for the deed
- the seller retains legal title while the buyer makes partial payments until the contract is fully executed
- the buyer immediately acquires legal title and takes possession
- none of these
Question 21 of 25

21. Question
Which answer best describes a true contract for a deed transaction
- At the end of the contract period, the vendee receives equitable title, provided all required periodic payments have been made
- The vendee has no right to posssess or occupy the property during the contract period
- At the end of the contract period, the vendor conveys legal title, provided the vendee has fulfilled all obligations
- The vendor may cancel the contract at any time before the final payment has been received
Question 22 of 25

22. Question
Several buyers are competing for the last available home in a desirable new subdivision. One buyer calls the owner-developer directly on the phone and offers $20,000 over and above the listed price. The developer accepts the offer. At this point,
- the parties have a valid, enforceable sale contract on the home
- the parties have completed a verbal, executory contract
- the parties may not cancel their contract
- the developer could not entertain other offers on the property
Question 23 of 25

23. Question
An owner completes a sales contract on her property with a buyer. Before closing, the seller runs into financial trouble and assigns the contract to her principal creditor. The buyer cries foul, fearing the property will be lost. Which of the following is true?
- The buyer cab sue the assignee to disallow the illegal assignment
- The buyer can take legal action against the assignor
- The assignor has completed a legal action
- The sale contract is nullified
Question 24 of 25

24. Question
A due-on-sale clause in a sale contract puts parties on notice that
- the full price of the property is due the seller at closing
- any loans surviving closing become immediately payable
- all of the seller's debts must be retired before or upon closing
- any conveyance may trigger an acceleration of any loans secured by the property
Question 25 of 25

25. Question
A tenant has an option-to-purchase agreement with the landlord that expires on June 30. On July 1, the tenant frantically calls the landlord to exercise the option, offering the apology that she was busy with a death in the family. Which of the following is true?
- Since options contrain grace periods, the landlord must sell
- The tenant loses the right to buy, but can claim the money paid for the option from the landlord
- The landlord does not have to sell, but must renew the option
- The option is expired, and the tenant has no rightful claim to money paid for the option

Quiz #21

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