Question: Match vendor, mortgagee, vendee, and mortgagor with their definitions.

Answer Options: Holds a lien holds legal title under a land contract pledges property as collateral possesses land under a land contract.

Answer: Mortgagee — holds lien; Vendor — holds legal title; Mortgagor — pledges property; Vendee — possesses land. 75

Question: Match each loan type with its use.

Answer Options: Bridge loan Reverse mortgage Package loan Blanket loan subdivisions gap between loans furnished condominium homeowners 62 or older.

Answer: Blanket loan — subdivisions; Bridge loan — gap between loans; Package loan — furnished condominium; Reverse mortgage — homeowners 62 or older. 76

Question: What distinguishes a takeout loan?

Answer Options: A. Partial releases B. Bridges temporary gaps C. Combines real and personal property D. Replaces temporary financing with permanent financing.

Answer: D. It replaces temporary financing with permanent financing. 77

Question: A builder requires buyers to use the builder’s preferred title company. This practice:

Answer Options: A. Is acceptable with a discount B. Is allowed if disclosed C. Is allowed for new construction D. Violates RESPA.

Answer: D. Violates RESPA. 78

Question: A $350,000 loan has a payment factor of 6.66 per $1,000. What is the monthly principal-and-interest payment?

Answer Options: A. $2,121 B. $2,331 C. $2,474 D. $2,589.

Answer: B. $2,331. 79

Question: What is the annual interest on a $425,000 loan at 6.5%?

Answer Options: A. $25,625 B. $27,625 C. $28,750 D. $29,125.

Answer: B. $27,625. 80

Question: What determines an ARM’s interest rate after the introductory period?

Answer Options: A. Federal Reserve rate only B. Index plus margin C. Original rate plus inflation D. Treasury yield only.

Answer: B. Index plus margin. 81

Question: Principal and interest are $1,073; taxes are $3,900 annually; insurance is $864 annually; and HOA dues are $180 monthly. What is PITIA?

Answer Options: A. $1,398 B. $1,470 C. $1,650 D. $1,850.

Answer: C. $1,650. 82

Question: Who is NOT protected under ECOA based on the characteristic described?

Answer Options: A. Couple with four children B. African American applicant C. Applicant receiving public assistance D. 69-year-old Hindu applicant.

Answer: A. The couple with four children. 83

Question: Which clause helps a subdivision developer sell individual lots before the entire loan is repaid?

Answer Options: A. Acceleration B. Alienation C. Partial release D. Prepayment.

Answer: C. Partial release clause. 84

Question: An advertisement states “Only $899 monthly payments.” What else must be disclosed under TILA?

Answer Options: A. Closing-cost estimate B. Taxes and insurance C. APR and full repayment terms D. Lender contact information.

Answer: C. APR and full repayment terms. 85

Question: Alisha earns $6,500 monthly and pays $450 for a car and $200 for student loans. Using 28%/36% ratios, what is her maximum housing payment?

Answer Options: A. $1,565 B. $1,690 C. $1,820 D. $2,340.

Answer: B. $1,690. 86

Question: Which loan allows homeowners aged 62 or older to access equity without monthly payments?

Answer Options: A. HELOC B. Home-equity loan C. Refinance D. Reverse mortgage.

Answer: D. Reverse mortgage. 87

Question: Why is seller financing called a “soft money” loan?

Answer Options: A. The borrower receives credit rather than actual funds B. The down payment is minimal C. Rates are below market D. Terms are more flexible.

Answer: A. The borrower receives credit rather than actual funds. 88

Question: Sanjay earns $7,500 monthly and has a $400 car payment and $700 child-support payment. What is his maximum conventional PITI using 28%/36% ratios?

Answer Options: A. $1,500 B. $1,600 C. $2,100 D. $2,700.

Answer: B. $1,600. 89

Question: Ophelia buys a $400,000 home with an 80% LTV loan. How much initial equity does she have?

Answer Options: A. $0 B. $80,000 C. $320,000 D. $400,000.

Answer: B. $80,000. 90

Question: In a deed of trust, the borrower is called the:

Answer Options: A. Beneficiary B. Holder C. Trustee D. Trustor.

Answer: D. Trustor. Appraisal and valuation 91