unit 14 real estate Flashcards


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1

Can the buyer's deed be recorded?

yes

2

Has Jason committed fraud?

no

3

Will the buyer be responsible for the debt represented by the lien on the buyer's house?

no

4

Affidavit of title

A sworn statement in which the seller assures the title company and buyer that no other defects in the title have occurred since the date of the title examination

5

Walk-through

Buyer verifies that required repairs have been made, the property has been well maintained, and no removal of improvements has taken place

6

Survey

Provides information about the exact location and size of the property

7

Mortgage reduction certificate

Certifies the amount owed on the mortgage loan, the interest rate, and the date and amount of the last interest payment

8

Bring down

Search of the public record made after closing

9

Abstract of title

Requires an attorney’s opinion of the quality of the seller’s title

10

As part of the title company's preclosing title search, the sellers may be required to execute an affidavit of title.

true

11

Lenders generally require that a buyer obtain a mortgagee's title insurance policy to ensure that the buyer takes good and marketable title at closing.

true

12

Face-to-face

Face-to-face-May raise privacy concerns

Face-to-face-Not best approach if friction between parties

Face-to-face-Buyer and seller meet for the first time

Face-to-face-Buyer and seller attend

13

Escrow

Escrow-Documents provided to escrow agent before closing

Escrow-Buyer and seller execute escrow instructions

Escrow-Third party acts on behalf of buyer and seller

14

In all closings in any state, the buyer and seller meet face to face.

False

15

The person who coordinates the activities in an escrow closing is a disinterested third party.

true

16

Prohibited

Prohibited-Unearned fees for services

Prohibited-Fee-splitting

Prohibited-Kickbacks

17

Permitted-

Reasonable escrow deposits

18

RESPA regulations apply to any residential mortgage loan made to finance the purchase of a one- to four-family home or to refinance an existing mortgage.

False

19

The only fee that the lender may collect before the applicant receives the Loan Estimate is for a credit report.

true

20

Buyer

Recording deed to convey title

Loan fees

Private mortgage insurance

Tax reserves

Buyer’s attorney fees

Insurance reserves

21

Seller

Recording of quitclaim deed

Recording of release deed

Seller’s attorney fees

Seller’s broker commission

22

RESPA requires lenders to maintain a cushion in a borrower's escrow account equal to one-sixth of the total estimated amount of annual taxes and insurance.

false

23

A debit on a closing statement is an amount entered in a person's favor—an amount that has already been paid, an amount being reimbursed, or an amount the buyer promises to pay in the form of a loan.

false

24

Prepaid items are expenses to be prorated (such as fuel oil in a tank) that have been prepaid by the seller but NOT fully used up and are credits to the buyer.

false

25

Accrued items are expenses to be prorated (such as water and other utility bills) that are owed by the seller but will be paid later by the buyer.

true

26

Certain real estate closings must be reported to the Internal Revenue Service (IRS) on Form 1099-S. The affected properties include sales or exchanges of

land, residential or commercial structures, condominiums, and shares in a cooperative housing corporation.

27

Which item would a lender generally require at the closing?

Title insurance commitment

28

The Real Estate Settlement Procedures Act prohibits

lenders from requiring excessive escrow account deposits.

29

The principal balance on an assumed mortgage loan is entered on the closing statement as

a debit to the seller and a credit to the buyer.

30

A buyer purchases a home in an area where closings are traditionally conducted in escrow. Which item would a buyer deposit with the escrow agent before the closing date?

Cash needed to complete the purchase

31

All of the following items are usually prorated between the buyer and the seller at closing EXCEPT

recording charges.

32

Section 8 of RESPA prohibits which of the following actions?

Kickbacks

33

To which of the following do RESPA regulations apply?

One-to-four-family residential unit purchases

34

RESPA prohibits certain practices that increase the cost of settlement services, including all of the following EXCEPT

spousal survivor benefits.

35

What information is included in the Loan Estimate form?

Monthly payment amountB)All of theseC)Total closing costsD)Interest rate

36

Violations under the Real Estate Settlement Procedures Act (RESPA) for kickbacks or fee-splitting are subject to

criminal and civil penalties, including a fine up to $10,000 and/or imprisonment up to one year.

37

The "bring down" is the second title search and is made

after the closing and before any new documents are filed

38

A security deposit made by a tenant to cover the last month's rent of the lease or the cost of repairing damage caused by the tenant is generally

transferred by the seller to the buyer.

39

The sale price of a property is $230,000. Transfer tax to be paid by the seller at closing, based on $0.50 per $500, will be

$230.00.

40

The annual real estate taxes on a property amount to $18,000. The seller has paid the taxes in advance for the calendar year. If the closing is set for June 15, which statement is TRUE?

Credit the seller $9,750; debit the buyer $9,750.

41

Real estate property taxes will be prorated at closing and are $6,450 annually. If escrow closes June 15 and taxes for the year have not yet been paid,

the buyer receives a credit of $2,956.30.

42

To verify property boundaries and location of improvements before real estate is sold,

a current survey should be made to confirm that no encroachments have arisen since the last transfer of title.

43

The first title search shows the status of the seller's title on that date. The second search is made after closing and is called

a bring down.

44

At closing, the earnest money left on deposit with a real estate broker is

a credit to the buyer.

45

In a face-to-face closing, who may be present?

Buyer and sellerB)All of theseC)Representative for the title insurance companyD)Representative for the lending institution

46

Information about the exact location and size of the property is obtained through

a survey

47

MOST closings involve the division of financial responsibility between the buyer and the seller for such items as taxes, rents, and other items. These divisions are called

prorations.

48

In some parts of the country, the buyer and the seller never meet at closing; the paperwork is handled by an escrow agent in a process called

closing escrow.

49

In some parts of the country, closing is called

settlement and transfer.

50

Expenses to be prorated (such as water bills and unpaid property taxes) that are owed by the seller but will be paid late by the buyer are called

accrued items.

51

A real estate transaction may be completed by using an escrow agent or escrow holder who acts as

a disinterested third party to make sure required documents and funding are in place before the transaction is completed.

52

The process by which expenses are divided at settlement of a real estate transaction so that both the buyer and the seller pay their respective portions of property charges is called

proration

53

In some parts of the country, the closing process involves the parties in the transaction sitting around a table and exchanging copies of documents, a process called

passing papers.

54

Expenses to be prorated (such as lawn care services) that have been paid by the seller but not fully used up are called

prepaid items.