Shared Flashcard Set

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BRE test
studying to pass the CA BRE test
753
Real Estate & Planning
Professional
08/08/2019

Additional Real Estate & Planning Flashcards

 


 

Cards

Term
The primary purpose that an appraiser would use a site analysis for would be to determine
Definition
highest and best use
Term
under a lease, who has the leasehold estate?
Definition
lessee
Term
urban industrial property is usually valued by the:
Definition
acre/square foot
Term
if a problem between a buyer and a seller cannot be resolved in escrow company can:
Definition
enter court action with the buyer and seller in an action of interpleader
Term
a trust deed not taken by a state savings and loan association on a single family, owner occupied residence could be prepaid without a penalty:
Definition
if the loan is more than 7 yrs old
Term
Johnson purchased a parcel of real property and received a standard policy of title insurance. Johnson would be protected against all of the following except
Definition
easements and liens on the property not revealed by the public record
Term
The statement: "no prudent person would normally pay more for an object than the price of an acceptable alternative" refers to the appraising principle of:
Definition
substitution
Term
Under the Civil Code, agents must disclose to sellers and buyers in a real estate transaction the nature of the agency relationship in which of the following transactions, would this agency relationship be required to be disclosed?
Definition
a lease for a period of more than one year
Term
The quickest appraisal method that can be used to convert the established income of a property into a dollar valuation of a property is the
Definition
gross rent multiplier approach
Term
a real estate investor who wishes to operate by using the principle of leverage would:
Definition
use borrowed money to the maximum extent possible
Term
a real estate transfer disclosure statement would be required when property is transferred by which of the following methods?
Definition
a sale transaction involving one to four units
Term
in the purchase of personal property during the acquisition of a business opportunity, which of the following is necessary to "perfect" the arrangement?
Definition
file a financing statement
Term
insofar as the ratio of land and improvement cost is concerned, which offers an investor the largest depreciation basis:
Definition
apartment property being sold at $100,000
Term
The Truth-in-Lending Law as it pertains to real estate would most nearly apply to which of the following:
Definition
first T.D. loans and junior loans
Term
"Depression, expansion, prosperity, and recession" are all terms related to which of the following types of cycle:
Definition
business
Term
The Subdivided Lands Act requires the owner, subdivider, or agent to notify the Real Estate Commissioner if certain material changes occur in a subdivision. All of the following would be considered to be a material change in a subdivision except:
Definition
a change in the prices of the lots, units, or parcels
Term
For federal income tax purposes, which of the following items is a legitimate deduction for an owner on unimproved real property that is being held for the purpose of investment?
Definition
a loss on the sale of the property
Term
If an appraiser is appraising a special purpose property, she would most generally use the
Definition
cost approach
Term
For Federal income tax purposes, capital expenditures for improvements are:
Definition
added to the "cost basis" of the property and depreciated
Term
Under most construction loan terms, a lender will not release the final payment to the builder until
Definition
the lien period has expired
Term
if there is a default on a mortgage and the mortgagee decides to foreclose on the mortgage, the mortgagee would:
Definition
file an action in the court
Term
The purchaser in a sale-leaseback transaction would be least concerned with the
Definition
depreciated book value of the building
Term
a net lease provides:
Definition
a net income to the lessor
Term
which of the following is most nearly like an easement appurtenant?
Definition
stock in a mutual water company
Term
The California Real Estate Law requires a subdivider to notify the Real Estate Commissioner whenever there is a material change after a final public report has been issued. Which of the following would constitute a material change?
Definition
the sale of seven lots to a private builder
Term
When loaning money to two or more co-borrowers on a single promissory note, the lender would be best advised to increase the security on the note by inserting which of the following phrases after the names of the co-borrowers?
Definition
together as individuals
Term
a homeowner may take advantage of an exclusion from capital gains in the sale of their own personal residence
Definition
every two year
Term
Mr. Bailey purchased a 24 unit apartment building in 1988 for income tax purposes, he is allowed to calculate depreciation using which of the following methods?
Definition
straight line
Term
which of the following is the reciprocal of an 8% capitalization rate?
Definition
12.5%
Term
The Real Estate Law is found in
Definition
the Business and Professions Code
Term
The Real Estate Commissioner reports to
Definition
the governor
Term
A salesperson owns 25% of the outstanding shares of Rollo Realty, Inc., and the broker owns the remaining shares. This division of ownership is
Definition
acceptable
Term
A salesperson is part owner Rollo Realty, Inc. In the broker's absence, the salesperson frequently reviews the work of sales associates. This is
Definition
prohibited
Term
A real estate business that is a partnership can have more than one office location, provided
Definition
a broker partner obtains an additional license for each location
Term
The sale or transfer of goods ordinarily held for sale in the course of business is governed in California by
Definition
the Uniform Commercial Code
Term
An officer of Ajax Corporation, who is not a real estate licensee, successfully negotiated the purchase of the Smith Widget Plant on behalf of Ajax. The Officer received a commission on the sale in addition to his normal salary. The officer of Ajax Corporation
Definition
should have had a real estate license
Term
If a real estate license is NOT renewed before it expires, the licensee
Definition
must cease all real estate activities
Term
A real estate licensee can offer a mobilehome for sale that is
Definition
in a location where it can legally remain for one year
Term
A couple desperately wants to move to Pine Bend, and they like the seller's house, which is listed with a broker. The couple tells the broker. The couple tells the broker they will "make it worth his while" if he can persuade the sellers to accept their offer, and they send an expensive food basket to the broker as a sign of their good faith. The broker neglects to mention this to the sellers. This practice is
Definition
prohibited
Term
A broker routinely places earnest money deposits in his personal account overnight safekeeping. This practice is
Definition
prohibited
Term
A broker has an exclusive listing agreement with a property owner. The listing will terminate "when the parties agree." This practice is
Definition
prohibited
Term
When a broker exercised his option to buy Whiteacre, he represented to the owner of
Whiteacre a written statement of his expected profit in the transaction. The seller agreed in writing to proceed with the sale. This conduct is
Definition
mandated
Term
The broker-officer of XYZ Realty, Inc., does not like the overly aggressive sales tactics of XYZ's salespeople but has not reprimanded them because is so good. The broker's conduct is
Definition
discouraged
Term
A broker wants to help out his neighbor's son, who recently acquired a B.A. in history from Back East University. The broker hires the graduate to show property to prospective buyers. Because the new employee has no real estate license, the broker handles all of the negotiating. This practice is
Definition
prohibited
Term
A salesperson is selling the Greenacre Estate. An offer has been accepted, and the closing will take place in two weeks. While the owners are out of town, the buyer asks if the closing can be put off for one day. The salesperson agrees on behalf of the owners, for she is sure they will not object. The salesperson's conduct is
Definition
prohibited
Term
A house is for sale following a murder in the house six months earlier. A salesperson, showing an out-of-town prospect through the house, decides to keep information about the murder to himself. The salesperson's conduct is
Definition
prohibited
Term
A broker is so busy that he never has the time to return the phone calls of his principles. He prefers to spend his time in the field making sales and acquiring new listings. This practice is
Definition
discouraged
Term
After attending a get-rich-quick real estate seminar, an attendee wants to buy a house "cheap". She tells a broker that she will offer $50,000, with seller financing and no down payment, on the Monroe Street house, which has an asking price of $125,000. The broker presents the offer with one of his own for $85,000, telling the owners make their asking price unrealistic. His conduct is
Definition
prohibited
Term
A new broker opens a brokerage office and immediately places an ad in the local newspaper: List Your House with Me and I Will Pay You $500 at Closing. This practice is
Definition
acceptable
Term
Abandonment
Definition
Voluntary surrender of a claim or right, such as when a Declaration of Abandonment terminates a homestead.
Term
Abstract
Definition
A brief summary
Term
Abstract of Judgement
Definition
A condensation of the essential provisions of a court judgment
Term
Abstract of Title
Definition
A summary or digest of the conveyances, transfers, and any other facts relied on as evidence of title, together with any other elements of record which may impair the title
Term
Acceleration Clause
Definition
Clause in trust deed or mortgage giving the lender the right to call all sums owing to be due and payable upon the happening of a certain event, such as the sale of the property or failure to pay property taxes.
Term
Accession
Definition
Acquiring title by having property added to your property
Term
Accretion
Definition
An addition to land from natural causes as, for example, from gradual action of the ocean or river waters.
Term
Accrued
Definition
Accumulated up to this point in time. Accrued interest, or accrued depreciation.
Term
Accrued Depreciation
Definition
The difference between the cost of replacement new as of the date of the appraisal and the present appraised value
Term
Acknowledgment
Definition
A formal declaration before a duly authorized officer by a person who has executed an instrument that such execution in his act and deed
Term
Acre
Definition
43,560 square feet of land
Term
Actual Notice
Definition
Knowledge if the existence of a thing or fact
Term
Ad Valorem
Definition
According to valuation
Term
Agency
Definition
The relationship between principal and agent which arises out of a contract, either expressed or implied, written or oral, wherein the agent in employed by the principal to do certain acts dealing with a third party
Term
Agent
Definition
One who represents another from whom he has derived authority
Term
Alienation
Definition
The transferring of property to another; the transfer of property and possession of lands, or other things, from one person to another
Term
Alienation Clause
Definition
Clause in a loan document providing for full payment if property is sold.
Term
ALTA Title Policy
Definition
(American Land Title Association) A type of title insurance policy issued by title insurance companies which expands the risks normally insured against under the standard type policy. It is a lender's policy.
Term
Amenities
Definition
Satisfaction of enjoyable living to be derived from a home; conditions of agreeable living of a beneficial influence arising from the location or improvements
Term
Amortization
Definition
The liquidation of a financial obligation on an installment basis; also, recovery, over a period, or cost of value.
Term
Amortized Loan
Definition
A loan that is completely paid off, interest and principal, by a series of regular payments that are equal or nearly equal. Also called a level payments loan.
Term
Anticipation
Definition
A principle of appraisal which affirms that value is created by anticipated benefits to be derived in the future.
Term
Appraisal
Definition
An opinion of the value of the property, usually by a licensed or certified appraiser
Term
Appraiser
Definition
One qualified by education, training and experience who is hired to estimate the value of real and personal property based on experience, judgment, facts, and use of formal appraisal processes.
Term
Appurtenance
Definition
Something annexed to another thing which may be transferred incident to it. That which belongs to another thing, as a barn, dwelling, garage or orchard is incident to the land to which it is attached
Term
Assemblage
Definition
Putting together two or more parcels to increase the total value
Term
Assessed Value
Definition
A value placed upon property by a public officer or board as basis for taxation
Term
Assessment
Definition
The valuation of property for the purpose of levying a tax or the amount of the tax to be levied.
Term
Assessor
Definition
The official who has the responsibility of determining assessed values.
Term
Assignee
Definition
The one to whom property is transferred
Term
Assignment
Definition
A transfer or making over to another of the whole of any property, real or personal, in possession or in action, of any estate or right therein
Term
Assignor
Definition
One who assigs or transfers property
Term
Assumption of Mortgage
Definition
The taking of title to property by a grantee, wherein he or she assumes liability for payment of an existing not secured by a mortgage or deed of trust against the property, becoming a co-guarantor for the payment of a mortgage or trust deed note.
Term
Attachment
Definition
Seizure of property by court order, usually done to have it available in the event that a judgment is obtained in a pending lawsuit
Term
Attorney-in-Fact
Definition
One who is authorized to perform acts for another under a power of attorney; power of attorney may be limited to a specific act or acts, or be general.
Term
During the days of Spanish rule, all land was owned by
Definition
the crown
Term
The Treaty of Guadalupe Hidalgo ended
Definition
the war in Mexico
Term
Real Estate Law, which relies on court decisions as well as legislation, is based on
Definition
English common law
Term
Land disputes over the Spanish and Mexican land grants were settled by
Definition
the Board of Land Commissioners
Term
In California, the tern real estate is synonymous with
Definition
real property
Term
Real property is NOT
Definition
movable
Term
The sale of real property generally is governed by the laws of
Definition
the state where the real property is located
Term
The sale of personal property generally is governed by the laws of
Definition
the state where the owner of the property resides
Term
In California, the Uniform Commercial Code governs sales transactions involving
Definition
bulk sales of goods
Term
For real estate to be conveyed, there must be an accurate
Definition
description
Term
A subdivision map is
Definition
a good reference for a legal description
Term
The MOST useful method of describing a subdivision parcel is probably
Definition
the lot and block system
Term
The regular survey system is also called
Definition
the U.S. government survey system
Term
California has how many principal baselines?
Definition
Three
Term
A township consists of how many sections?
Definition
36
Term
A section is
Definition
640 acres
Term
The point of beginning is used in
Definition
the metes and bound system
Term
Balloon Payment
Definition
Where the final installment payment on a note is greater than the preceding installment payments, and it pays the note in full, such final installment is termed a balloon payment
Term
Base and Meridian
Definition
Imaginary lines used by surveyors to find and describe the location of private or public lands.
Term
Bearing Wall
Definition
A wall or partition supporting any vertical load in addition to its own weight
Term
Beneficiary
Definition
(1) One entitled to the benefit of a trust; (2) One who receives profit from an estate, the title which is vested is a trustee; (3) The lender on the security of a note and deed of trust.
Term
Bilateral Contract
Definition
A contract in which both parties agree to perform certain acts.
Term
Bill of Sale
Definition
A written instrument given to pass title of personal property from vendor to vendee
Term
Blanket Encumbrance
Definition
An encumbrance which covers more than one parcel of property
Term
Blanket Mortgage
Definition
A single mortgage which covers more than one piece of real estate
Term
Boot
Definition
Profit gained in exchange of properties on which income tax is not deferred. May be anything of value, including mortgage relief.
Term
Bounds
Definition
Boundaries used in a metes and bounds legal description.
Term
Breach
Definition
The breaking of a law, or failure of duty, either by omission or commission.
Term
Broker
Definition
A licensed person who does real estate acts for compensation or in expectation of compensation. He acts for himself and it paid directly by the client.
Term
Business Opportunity
Definition
The sale or lease of a business. It includes personal property and it may include real property
Term
By-Laws
Definition
The rules of an organization such as a corporation or partnership
Term
A fee simple estate and a life estate are
Definition
freehold estates
Term
The highest form of ownership is
Definition
the fee simple absolute
Term
Victor and Karen are not married but together own community property because they are
Definition
registered domestic partners
Term
A fee simple estate that may be lost when some act is performed is
Definition
a fee simple on condition subsequent
Term
A fee simple estate that has no conditions is
Definition
a fee simple absolute
Term
If Greenacre is deeded by Lou to Mary for Mary's life, Mary has
Definition
a life estate
Term
If Greenacre is deeded by Lou to Mary for Mary's life, Lou has
Definition
an estate in reversion
Term
When Aunt Winifred died, she left a life estate in Whiteacre to her nephew George. When George dies, Whiteacre will go to George's daughter Elizabeth is
Definition
a remainderman
Term
If Greenacre is deeded by Lou to Mary for life of Nancy, Nancy has
Definition
no interest
Term
The owner of a life estate can
Definition
sell only the life estate
Term
Joint tenants have unity of
Definition
time, title, interest, and possession
Term
Jessica and John own Blackacre as joint tenants. Jessica's will specifies that on her death her interest in Blackacre is to go on her sister Mona. When Jessica dies
Definition
John will be sole owner of Blackacre
Term
Three joint tenants share interest in a property. If one joint tenant's share is sold using the proper legal formalities, the new owner will then be
Definition
a tenant in common with the other joint tenants
Term
Community property is
Definition
all property acquired by a spouse or registered domestic partner that is not separate property
Term
One of the forms of concurrent ownership is
Definition
tenancy in partnership
Term
A partner has
Definition
the right to possession of partnership property for partnership purposes
Term
Absolute control, as well as absolute liability, belongs to
Definition
a sole proprietor
Term
When doing business in California, a corporation chartered in California is
Definition
a domestic corporation
Term
Title to a spouse's marital property can be transferred upon death by use of
Definition
a living trust
Term
A limited partner is
Definition
not liable for partnership debts beyond the amount invested
Term
A person who dies without a will dies
Definition
intestate
Term
The testator names
Definition
an executor or executrix
Term
Someone who receives real property by will is called
Definition
a devisee
Term
A typewritten will must be
Definition
made by competent person, signed by the testator, and witnessed.
Term
A statutory will is
Definition
signed and witnessed
Term
A holographic will is
Definition
handwritten
Term
The probate court appoints
Definition
an administrator or administratrix
Term
When soil is deposited on a riverbank, gradually building out the land, the process is called
Definition
accretion
Term
When flood conditions cause land to be washed away, this is known as
Definition
avulsion
Term
When water recedes, creating a new shoreline, the process is called
Definition
reliction
Term
Elena moves onto Mike's land, builds a home, pays the property taxes, and claims she owns the property. When will she have good title, even against Mike?
Definition
After 5 years
Term
The right to travel over the property of someone else is
Definition
an easement
Term
A cotenant who wants property that is co-owned to be sold would bring
Definition
a partition action
Term
In event of default, real property may be sold without court action if the mortgage or other lien instrument contains
Definition
a power of sale
Term
The court order following a judgment for money is
Definition
a writ of execution
Term
The power of the state to take private property for public use is called
Definition
eminent domain
Term
To be effective, a deed must be
Definition
signed by the grantor
Term
The transfer of title from grantor to grantee, and from that grantee to a subsequent grantee, and so on, is called
Definition
the chain of title
Term
Legal title conveyed by a deed of trust may be regained by
Definition
a reconveyance deed
Term
A cloud on a title is
Definition
not important
Term
A mechanic's lien can be filed by
Definition
a laborer
Term
Which is NOT a mechanic?
Definition
An apartment lessor
Term
When required, preliminary notice of right to file a mechanic's lien should be given
Definition
within 20 days of the starting time
Term
A notice of cessation is appropriate
Definition
when the work has been stopped for 30 days
Term
A notice of completion should be filed within
Definition
10 days after completion of the work of improvement
Term
Generally, the action to enforce a mechanic's lien claim must be filed within how many days after the lien is recorded?
Definition
90 days
Term
If unauthorized work is being done, a property owner can
Definition
file a notice of nonresponsibility
Term
Liens and judgments are
Definition
encumbrances
Term
The sheriff is directed to sell property by
Definition
a writ of execution
Term
The right to use adjacent land to go to and from a roadway is
Definition
an easement
Term
Betty's property includes an easement over Al's land. Al's property is
Definition
the servient tenement
Term
Betty's property includes an easement over Al's land. Betty's property is
Definition
the dominant tenement
Term
George does not own any land but has an easement over Al's and Betty's property to go down to the river. George has
Definition
an easement in gross
Term
Marilyn's 40-acre tract, purchased from Alan, is landlocked, which means that she
Definition
can get an easement by necessity over Alan's adjoining parcel
Term
Al sold Blackacre to Betty, giving her an easement over Whiteacre. Years later, Al bought Blackacre back from Betty. What effect did his purchase have on the easement?
Definition
the purchase terminated the easement
Term
The maximum homestead exemption may be claimed by a homeowner who is
Definition
older than 65 years of age
Term
A family unit is
Definition
defined by law
Term
The homestead exemption for a single person is at LEAST
Definition
$75,000
Term
The homestead exemption for a homeowner who is a member of a family unit is at LEAST
Definition
$100,000
Term
Generally an agent works for
Definition
the principal
Term
A minor
Definition
is anyone younger than 18 years of age
Term
Someone appointed to carry out a particular transaction is
Definition
a special agent
Term
An independent contractor is distinguished by
Definition
responsibility for Social Security and other payments
Term
The California Real Estate Law treats a real estate salesperson as
Definition
an employee of the broker
Term
A salesperson is a broker's
Definition
agent
Term
An agency agreement to perform an act that requires a writing
Definition
must itself be in writing
Term
To be enforceable, all real estate sales contracts
Definition
must be in writing
Term
As a contract, a real estate agency agreement
Definition
must meet the requirements for a valid contract
Term
Real estate commission rates
Definition
are not fixed by law
Term
All real estate agency agreements must
Definition
be in writing
Term
The MOST commonly used form of real estate listing agreement is
Definition
the exclusive authorization and right-to-sell listing
Term
A real estate agent owes duties to
Definition
the principal, the third person, and the subagent.
Term
The agent owes the principal the duty of
Definition
loyalty
Term
A real estate agent must make full disclosure of
Definition
material facts that are known by the agent or that would be revealed by a reasonable inspection of the property
Term
The principal owes the agent
Definition
the duty of care
Term
A real estate seller must disclose
Definition
material facts concerning the property's value or desirability
Term
Exaggerating a property's value or desirability
Definition
is never permitted
Term
The Recovery Account is available to
Definition
people victimized by a real estate licensee
Term
An agency relationship may NOT be terminated by
Definition
someone outside the agency relationship
Term
A 17-year-old can contract as an adult if she
Definition
in emancipated
Term
The owner of a one-person shoe repair shop is
Definition
a sole proprietor
Term
Mary persuaded her elderly Aunt Agnes to buy grossly overpriced condominium. Mary knew the price was too high, but she received a commission on the sale from the seller. Aunt Agnes may complain of
Definition
actual fraud and undue influence
Term
The contract Haji Ababe accepted states a purchase price "as appraised on May 12, 2016, by Mike Morton, MAI." Based on this provision, the contract is
Definition
enforceable
Term
Can a broker enforce an oral listing agreement for his neighbor's home?
Definition
No
Term
When both parties agree to cancel a contract, they effect
Definition
a rescission
Term
Todd made an offer for the Brown residence, and the Browns accepted the offer. On reconsidering, Todd decided to back out of the deal, and the Browns agreed to let him do so. Todd and the Browns then signed
Definition
an agreement reforming the purchase contract
Term
Which is NOT a way to terminate a contract?
Definition
Verification
Term
Lonnie and Karen have a contract to buy the Santos house. Following a four-day rainstorm, the Santos house was pushed off its foundation by a mudslide and is now resting about halfway over a ravine. The contract probably
Definition
discharged because performance is impossible
Term
If a buyer's performance of her sales contract becomes economically impractical, she should
Definition
ask that the contract be terminated
Term
Failure to perform a contract is
Definition
a breach
Term
Drew signed a contract to sell his farm to George. Drew had second thoughts and refused to sell, but the sale went through anyway. How did this happen?
Definition
George received a court order for specific performance of the contract
Term
The time period in which a lawsuit can be brought is set by
Definition
the statute of limitations
Term
The statute of limitations for an action based on a written real estate contract is
Definition
4 years
Term
The rule for preprinted contracts is
Definition
handwriting takes precedence over both typing and printing
Term
A property description including the words "250 acres, more or less" is
Definition
sufficient if reasonably close to the exact acreage
Term
A well-drafted real estate purchase contract will include provisions for
Definition
the buyer's possession of the property, the financing terms, & proration of property expenses.
Term
Unless the seller provides the necessary documentation, part of the proceeds of a sale of real property must be withheld for federal tax purposes as provided by
Definition
the IRS
Term
Liquidated damages paid on default by the buyer of a single-family residence who intended to occupy the dwelling cannot exceed what percentages of the purchase price?
Definition
3%
Term
A seller received an offer of $610,000 for his house. His asking price is $635,000. If the buyer rejects the counteroffer, may the seller accept the $610,000 offer?
Definition
No
Term
A $450,000 house can be purchased with a $90,000 down payment using the principle of
Definition
leveraging
Term
The Fed can increase or decrease the amount of money in circulation by all of following
Definition
establishing the discount rate, raising or lowering reserve requirements, & buying and selling government securities.
Term
Federal savings and loan activities are overseen by
Definition
the Office of the Comptroller of the Currency
Term
California usury laws apply primarily to
Definition
private lenders
Term
Real estate is hypothecated by use of
Definition
a security instrument
Term
To be a negotiable instrument, a promissory not must be
Definition
a promise to pay money to the bearer
Term
A holder in due course must take a negotiable instrument
Definition
without notice of any defense against its enforcement
Term
In a mortgage, the lender is
Definition
the mortgagee
Term
The highest bidder at a judicial foreclosure receives
Definition
a certificate of sale
Term
In a deed of trust, the borrower is
Definition
the trustor
Term
In a deed of trust, the lender is
Definition
the beneficiary
Term
The first step in bringing about a trustee's sale is to prepare
Definition
a declaration of default
Term
There is no right of redemption following
Definition
a trustee's sale
Term
An ARM is
Definition
a mortgage in which the interest rate changes periodically based on an index.
Term
MOST adjustable-rate loans are
Definition
assumable
Term
Interest rate and payment can change every three to five years in
Definition
a renegotiable-rate mortgage
Term
TRID applies to
Definition
construction-only loans
Term
RESPA covers
Definition
the Closing Disclosure form
Term
A lender that discriminates against a loan applicant because of race has violated
Definition
the Equal Credit Opportunity Act
Term
A California veteran might have a home loan insured by
Definition
FHA
Term
FHA appraisal value is used to set the upper limit of
Definition
the loan amount
Term
In addition to a monthly charge, FHA mortgage insurance includes a one-time payment on a purchase loan that is
Definition
1.75% of the loan amount
Term
For an existing structure, the maximum FHA mortgage loan term is
Definition
30 years
Term
One discount point will increase a lender's effective yield by approximately
Definition
1/8%
Term
For discount points will increase a lender's effective yield by approximately
Definition
1/2%
Term
On FHA loans, seller contributions, including discounts and closing costs, cannot exceed
Definition
6% of acquisition cost
Term
Five different graduated payment mortgages are approved by
Definition
FHA
Term
A veteran can have a home guaranteed by
Definition
VA
Term
The notice of value sets the upper limit of value for
Definition
the guarantee
Term
Using the benefits of the GI Bill, a veteran cannot buy
Definition
a farm
Term
A veteran can be given a home loan on property owned by
Definition
CalVet
Term
A CalVet purchase loan must be applied for
Definition
before a contract of sale is signed
Term
CalVet loans are NOT available for
Definition
commercial property
Term
Many seller-financed purchases are examples of
Definition
creative financing
Term
An installment sales contract also called
Definition
a land contract
Term
In a sale-leaseback
Definition
both land and buildings can be sold
Term
The secondary mortgage market does NOT deal in
Definition
issuing loans
Term
Ginnie Mae securities are NOT backed by
Definition
CalVet loans
Term
Capacity
Definition
Having legal competence to sign binding contacts.
Term
Capital Gain
Definition
Profit from the sale of property. Used in computing income taxes.
Term
Capital Loss
Definition
Loss from sale of property. Used in computing income taxes.
Term
Capitalization
Definition
(1) In appraising, determining the value of property by considering net income and percentage or reasonable return on the investment. (2) In accounting, carrying an expenditure as an asset, rather than taking it as an expense.
Term
Capitalization Rate
Definition
The rate which is considered a reasonable return on the investment, and used in the process of determining value based upon net income.
Term
CC&Rs
Definition
Covenants, Conditions, and Restrictions affecting the use of a property.
Term
Chain of Title
Definition
A history of conveyances and encumbrances affecting the title from the time the original patent was granted, or as far back as records are available.
Term
Change, Principle of
Definition
A principle of appraisal which holds that it is the future, not the past, which is of prime importance in estimating value
Term
Chattel
Definition
Personal property
Term
Chattel Real
Definition
A personal property interest in real property, such as a lease.
Term
Cloud on Title
Definition
Any conditions revealed by a title search which affect the title to property; usually relatively unimportant items which can be removed with a quitclaim deed or court action.
Term
Code of Ethics
Definition
Rules of an organization used as a guideline by members of the organization (e.g., N.A.R. Code of Ethics).
Term
Commingling
Definition
Mixing client's money or property with the agent's
Term
Community Property
Definition
Property accumulated through joint efforts of husband and wife.
Term
Comparable Sales
Definition
Sales which have similar characteristics as the subject property and are used for analysis in the appraisal process.
Term
Comparison Approach
Definition
A means of appraising by comparing recent sales prices of similar properties
Term
Competent
Definition
Legally qualified, or capable of signing contracts.
Term
Compound Interest
Definition
Interest paid on original principal and also on the accrued and unpaid interest which has accumulated.
Term
Condemnation
Definition
The act of taking private property for public use by a political subdivision through the exercise of eminent domain; declaration that a structure is unfit for use.
Term
Condominium
Definition
A system of individual fee ownership of units in a multi-part structure, combined with joint ownership of common areas of the structure(s) and the land.
Term
Conformity, Principle of
Definition
A principle of appraisal which holds that that maximum value is realized when a reasonable degree of homogeneity of improvements is present.
Term
Consideration
Definition
Anything of value given to induce entering into a contract; it may be money, personal services, or even love and affection.
Term
Constructive Notice
Definition
Notice given by public records or possession of the property.
Term
Contribution, Principle of
Definition
An appraisal principal which holds that the value of a part of a property (such as a swimming pool) is determined by what buyers are willing to pay for it, not what it cost to construct.
Term
Conventional Loan
Definition
A loan made without government backing.
Term
Conveyance
Definition
The transfer of title of land from one to another
Term
Cost
Definition
The price a buyer pays for a property
Term
Cost Approach
Definition
One of the three methods in the appraisal process. An analysis in which a value estimate of a property is derived by estimating the replacement cost of the improvements, deducting therefrom the estimated accrued depreciation, then adding back land value.
Term
Cost Basis
Definition
The price a buyer paid for a property, used in computing any capital gain for income tax purposes.
Term
Deciduous
Definition
Trees which lose their leaves in the autumn and winter
Term
Deed
Definition
Written instrument which when properly executed and delivered, conveys title.
Term
Deed of Trust
Definition
Document by which naked legal title is transferred to a trustee as a security for a loan
Term
Default
Definition
Failure to fulfill a duty or promise or to discharge an obligation; omission or failure to perform any act
Term
Deficiency Judgement
Definition
A judgment given when the security pledge for a loan does not satisfy the debt upon its default
Term
Deposit Receipt
Definition
Document used when accepting earnest money to bind an offer. Basic contract between buyer and seller
Term
Depreciation
Definition
Loss of value in real property brought about by age, physical deterioration or functional or economic obsolescence. Broadly, a loss in value from any cause.
Term
Desist and Refrain Order
Definition
An order directing a person to desist and refrain from committing an act in violation of the law.
Term
Discount
Definition
An amount deducted from the face amount of a loan
Term
Discount Points
Definition
Prepaid interest demanded by demanded by lender when a loan is negotiated. A premium paid for the privilege of borrowing at the stated interest rate.
Term
Documentary Transfer Tax
Definition
A tax collected when a deed is recorded. Stamps are affixed to the deed.
Term
Dominant Tenement
Definition
The land that is benefitted by an easement appurtenant
Term
Duress
Definition
Unlawful constraint exercised upon a person whereby the person is forced to do some act against his or her will.
Term
Earnest Money
Definition
Deposit accompanying an offer.
Term
Easement
Definition
Created by grant or agreement for a specific purpose, an easement is the right, privilege or interest which one party has in the land of another (example. Right-of-Way)
Term
Economic Life
Definition
The period over which a property will yield a return on the investment, over and above the economic or ground rent due to land.
Term
Economic Obsolescence
Definition
A loss in value due to factors outside the subject property, but adversely affecting the value of the subject property.
Term
Effective Age
Definition
The number of years of age that is indicated by the condition of the structure
Term
Effective Gross Income
Definition
The maximum rent from income property minus the vacancies
Term
Eminent Domain
Definition
The right of the government to acquire property for necessary public or quasi-public use by condemnation; the owner must be fairly compensated.
Term
Encroachment
Definition
Trespass; the building of a structure or construction of any improvements partly or wholly on the property of another.
Term
Encumbrance
Definition
Anything which affects or limits the fee simple title to property, such as mortgages, easements or restrictions of any kind. Liens are special encumbrances which make the property security for payment of a debt or obligation, such as mortgages.
Term
Escheat
Definition
The reverting of property to the state when heirs capable of inheriting are lacking
Term
Escrow
Definition
The deposit of instruments and finds with instructions to a neutral third party to carry out the provisions of an agreement or contract; when everything is deposited to enable carrying out the instructions, it is called a complete or perfect escrow.
Term
Estate
Definition
The degree, quantity, nature and extent of interest which a person has in real property
Term
Estate for Life
Definition
A freehold estate, not of inheritance, but which is held by the tenant for his or her own life or lives of one or more other persons.
Term
Estate for Years
Definition
An interest in lands by virtue of a contract for the possession of them for a definite and limited period of time, which might be for days, weeks, months or years.
Term
Estate in Fee
Definition
A fee estate. The greatest degree of ownership of real property
Term
Estate of Inheritance
Definition
An estate which may descent to heirs. A type of fee estate
Term
Eviction
Definition
Putting out a tenant when his or her right to possess the property has ended
Term
Exclusive Agency
Definition
A written instrument giving one agent the right to sell property for a specified time but reserving the right of the owner to sell the property himself or herself without the payment of a commission
Term
Exclusive Right to Sell
Definition
A written agreement between an owner and an agent giving the agent the right to collect a commission if the property is solid by anyone during the term of the agreement
Term
Execute
Definition
To complete, to make, to perform, to do, to follow out; to sign a deed, to make a deed, including especially signing, sealing, and delivery; to execute a contract is to perform the contract, to follow out to the end, to complete.
Term
Executed Contract
Definition
A contract where both parties have completely performed
Term
Executory Contract
Definition
A contract where something remains to be done by one or both of the parties
Term
Extended Coverage
Definition
A broad form title insurance policy which protects the owner against additional risks not covered in a standard policy
Term
Federal Housing Administration
Definition
Federal agency which insures lenders making FHA loans.
Term
Federal National Mtg. Assoc.
Definition
FNMA, Fannie Mae, provides a secondary market by buying and selling existing loans.
Term
Fee
Definition
An estate of inheritance (a fee simple estate) in real property)
Term
Fee Simple
Definition
An estate of inheritance, where ownership continues for an indefinite period. It may be sold or willed.
Term
Fee Simple Absolute
Definition
Fee simple ownership with no qualifications or limitations.
Term
Fee Simple Defeasible
Definition
Fee simple ownership with a condition which, if broke, could result in loss of title to the property.
Term
Fiduciary
Definition
A person in a position of trust and confidence, as between principal and broker; broker, as fiduciary, owes certain loyalty which cannot be breached under rules of agency.
Term
Financing Statement
Definition
The instrument which is filed in a loan on personal property in order to give public notice of the security interest and thereby protect the interest of the secured parties in the collateral.
Term
Fixtures
Definition
Items attached to the land or improvements, which usually cannot be removed without agreement, and therefore, they become real property; examples: plumbing fixtures built into the property, etc.
Term
Foreclosure
Definition
Procedure whereby property pledged as a security for a debt is solid to pay the debt in the event of default in payments or terms.
Term
Fraud
Definition
The intentional and successful employment of any cunning, deception, collusion, or artifice, used to circumvent, cheat or deceive another person whereby that person acts upon it to the loss of the property and to his or her injury.
Term
Freehold Estate
Definition
A fee simple or life estate.
Term
Front Foot
Definition
Property measurement for sale or valuation purposes; the property measured by the front foot on its street line- each front foot extending the depth of the lot
Term
Functional Obsolescence
Definition
Loss of value due to adverse factors from within the structure which affect the utility of the structure.
Term
General Lien
Definition
A lien which affects all property of a person.
Term
Grant Deed
Definition
A deed conveying the title. It has two implied warranties.
Term
Grantee
Definition
The purchaser; a person to whom a grant is made.
Term
Granting Clause
Definition
The action clause of a grant deed.
Term
Grantor
Definition
Seller of a property; one who signs a deed.
Term
Gross Income
Definition
Total income before any expenses are deducted.
Term
Gross Rent Multiplier
Definition
The sale price of a property divided by the gross rent from that property.
Term
Highest and Best Use
Definition
An appraisal phrase meaning that use which, at the time of an appraisal, is most likely to produce the greatest net rate of return to the land and/or buildings over a given period of time; that use which produces the greatest amount of amenities or profit.
Term
Holder in Due Course
Definition
One who has taken a note, check or bill of exchange in due course (1) Before it was overdue; (2) In good faith and for value; (3) Without knowledge that it has been previously dishonored and without notice of any defect at the time it was negotiated.
Term
Homestead
Definition
A home upon which the owner or owners have recorded a Declaration of Homestead, which protect the homeowner against judgment up to specified amounts.
Term
Hypothecate
Definition
To give a thing as security without the necessity of giving up possession of it.
Term
Impounds
Definition
A trust-type account established by lenders for the accumulation of funds to meet taxes, FHA mortgage insurance premiums, and/or future insurance policy premiums required to protect their security. Impounds are usually collected with the note payment.
Term
Improvements
Definition
Things built on land which become a part of the real property
Term
Income Property
Definition
A property that produces rent.
Term
Injunction
Definition
A writ or order issued under the seal of a court to restrain one or more parties to a suit or proceeding from doing an act which is deemed to be inequitable or unjust in regard to the rights of some other party or parties in the suit or proceeding.
Term
Installment Note
Definition
A not which provides that payments of a certain sum or amount to be paid on the dates specified in the instrument.
Term
Installment Sales Contract
Definition
See Land Contract
Term
Joint and Several Note
Definition
A note signed by two or more persons in which they are liable jointly and individually for the full amount of the loan.
Term
Joint Tenancy
Definition
Joint ownership by two or more persons with right of survivorship; all joint tenants own equal interest and have equal rights in the property.
Term
Judgment
Definition
The final determination of a court of competent jurisdiction of matter presented to it; money judgments provide for the payment of claims presented to the court, or are awarded as damages, etc.
Term
Junior Lien
Definition
A lien that does not have first priority, such as a second trust deed.
Term
Kiosk
Definition
A small usually wooden structure, often cylindrical in shape and open on one or more sides. Often used as an information booth.
Term
Land Contract
Definition
A contract ordinarily used in connection with the sale of a property in cases where the seller does not wish to convey title until all or a certain part of the purchase price in paid by the buyer, often used when property is sold with a small down payment.
Term
Lease
Definition
A contract between the owner and tenant setting forth conditions upon which tenant may occupy and use the property, and the term of the occupancy.
Term
Leasehold
Definition
The interest of one who leases property. A less-than-freehold estate.
Term
Legal Description
Definition
A description recognized by law; a description by which property can be definitely located by reference to government surveys or approved recorded maps.
Term
Lessee
Definition
One who contracts to rent property under a lease contract.
Term
Lessor
Definition
An owner who contracts to rent property under a lease contract.
Term
Leverage
Definition
The use of borrowed money to make an investment.
Term
License
Definition
Personal, revocable, non-assignable permission to do some at on the land of another.
Term
Lien
Definition
A form of encumbrance which usually makes property security fro the payment of a debt or discharge of an obligation; example: judgments, mortgages, deeds of trust, etc.
Term
Life Estate
Definition
An estate limited in duration to the life or lives of one or more designated persons.
Term
Liquidated Damages Clause
Definition
A clause in the contract specifying the damages in the event of a breach of contract.
Term
Liquidity
Definition
The ability to convert an asset to cash quickly.
Term
Lis Pendens
Definition
Suit pending, usually recording so as to give constructive notice of pending litigation.
Term
Listing
Definition
An employment contract between principal and agent authorizing the agent to perform services for the principal involving the latter's property; listing contracts are entered into for the purpose of securing persons to buy, lease or rent property.
Term
Loan Commitment
Definition
Lender's contractual commitment to a loan based on the appraisal and underwriting.
Term
Loan-to-Value Ratio
Definition
The amount of the loan expressed as a percentage of the appraised value.
Term
Market Data Approach
Definition
One of the three methods in the appraisal process. A means of comparing similar types of residential properties, which have recently sold, to the subject property.
Term
Market Value
Definition
The price at which a willing seller would sell and a willing buyer would buy, neither being under abnormal pressure.
Term
Marketable Title
Definition
Merchantable title; title free and clear of objectionable liens or encumbrances.
Term
Master Plan
Definition
General plan for the future development of a community.
Term
Material Fact
Definition
A fact is material if it is one which the agent should realize would be likely to affect the judgment of the principal in giving his consent to the agent to enter into the particular transaction on the specified terms.
Term
Mechanic's Lien
Definition
A lien placed on property by laborers and material suppliers who have contributed to a work of improvement.
Term
Metes and Bounds
Definition
A term used in describing the boundary lines of land, setting forth all the boundary lines together with their terminal points and angles.
Term
Mile
Definition
5,280 feet.
Term
Minors
Definition
All persons under the age of majority, usually 18.
Term
Mortgage
Definition
An instrument recognized by law by which property is hypothecated to secure the payment of a debt or obligation; procedure for foreclosure, in event of default, is established by statute.
Term
Mortgagee
Definition
One to whom a mortgagor give a mortgage to secure a loan or performance of an obligation; a lender.
Term
Mortgagor
Definition
One who gives a mortgage on his property to secure a loan or assure performance of an obligation; a borrower.
Term
Net Income
Definition
The gross income of income property minus the vacancies and allowable expenses equals the net income. Also the net profit of a business.
Term
Note
Definition
A signed written instrument acknowledging a debt and promising payment.
Term
Notice of Completion
Definition
A document which is recorded when an improvement is completed on a property.
Term
Notice of Default
Definition
A document that is recorded and delivered to the borrower when a default has occurred under a deed of trust.
Term
Notice of Nonresponsibility
Definition
A notice provided by law designed to relive a property owner from responsibility for the cost of work done on property or materials furnished therefore; notice must be verified, recorded and posted.
Term
Obsolescence
Definition
Loss in value due to reduced desirability and usefulness of a structure because its design and construction become obsolete; loss because of becoming old-fashioned and not in keeping with modern needs, with consequent loss of income.
Term
Offset Statement
Definition
Statement by owner of property or owner of lien against property setting forth the present status of liens against said property.
Term
Open Listing
Definition
An authorization given by a property owner to a real estate agent wherein said agent is given the nonexclusive right to secure a purchaser; open listings may be given to any number of agents.
Term
Open-End Mortgage
Definition
A mortgage containing a clause which permits the mortgagor to borrow additional money after the loan has been reduced without rewriting the mortgage.
Term
Option
Definition
A right given for a consideration to purchase or lease a property upon specified terms within a specified time.
Term
Optionee
Definition
Receiver of an option. Usually a potential buyer.
Term
Optionor
Definition
Giver of an option. Usually a potential seller.
Term
Or More Clause
Definition
A clause in a loan document allowing the borrower to pay additional sums at any time.
Term
Partial Release Clause
Definition
A clause in a blanket mortgage or trust deed allowing for reconveyance or title of a part of the property when part of the loan is paid off.
Term
Periodic Tenancy
Definition
A leasehold estate continuing from period-to-period until the landlord to tenant gives notice.
Term
Personal Property
Definition
Any property which is not real property.
Term
Physical Deterioration
Definition
Impairment of condition. Loss in value brought about by wear and tear, disintegration, use and actions of the elements.
Term
Planning Commission
Definition
An agency of the city or county appointed to study and recommend steps for the orderly growth of the community.
Term
Points
Definition
Prepaid interest demanded by lender when a loan is negotiated. A premium paid for the privilege of borrowing at the stated interest rate. Each point represents one percent of the loan amount.
Term
Police Power
Definition
The right of the state to enact laws and enforce them for the order, safety, health, moral and general welfare of the public.
Term
Power of Attorney
Definition
An instrument authorizing a person to act as the agent of the person granting it.
Term
Prepayment Penalty
Definition
Penalty for the payment of a mortgage or trust deed note before it actually becomes due.
Term
Prescription
Definition
The securing of an easement on a property by using it under certain conditions for a given period of time.
Term
Prima Facie
Definition
Presumptively true on its face.
Term
Primary Mortgage Market
Definition
The market where loans are originated.
Term
Principal
Definition
The employer of an agent. In a listing contract, this is normally the seller.
Term
Private Restriction
Definition
A limitation placed on the use of the property by the seller
Term
Procuring Cause
Definition
That cause originating from a series of events that, without break in continuity, results in the prime object of an agent's employment producing a final buyer.
Term
Progression, Principle of
Definition
The worth of a lesser valued residence tends to be enhanced by association with many higher valued residences in the same area.
Term
Promissory Note
Definition
Following a loan commitment from the lender, the borrower signs a note promising to repay the loan under stipulated terms. The promissory note establishes personal liability for its repayment.
Term
Property
Definition
Anything of which there may be ownership.
Term
Proration
Definition
To divide or prorate equally or proportionately to time of use.
Term
Public Restriction
Definition
A limitation places on the use of property by the government, usually through zoning laws.
Term
Quiet Enjoyment
Definition
The right to the use of property without interference of possession.
Term
Quiet Title
Definition
A court action brought to establish title or to remove a cloud on the title.
Term
Quitclaim Deed
Definition
A deed to relinquish any interest in the property which the grantor may have.
Term
Real Property
Definition
Property that consists of land, that which is affixed to land, and that which is appurtenant to it. Generally considered immovable.
Term
Realtor
Definition
A real estate broker holding active membership in a real estate board associated with the National Association of Realtors.
Term
Reconveyance Deed
Definition
The deed given by the trustee to the trustor, removing the lien against the property.
Term
Recording
Definition
Filing for record in the office of the county recorder or other proper government official.
Term
Rehabilitation
Definition
The restoration of a property to satisfactory condition without drastically changing the plan, form or style of architecture.
Term
Release Clause
Definition
This is a stipulation that upon the payment of a specific sum of money to the holder of a trust deed or mortgage, the lien of the instrument as to a specifically described lot or area shall be removed from the blanket liens on the whole are involved.
Term
Replacement Cost
Definition
The cost of replacing the subject improvement with one having utility equivalent to that being appraised, but constructed with modern materials, and according to current standards, design and layout.
Term
Reproduction Cost
Definition
The cost of replacing the subject improvement with one that is the exact replica, having the same quality of workmanship, design and layout.
Term
Request for Notice of Default
Definition
Document which is recorded by the holder of a junior loan so he or she may be notified if the buyer defaults on other loans.
Term
Rescission of Contract
Definition
The abrogation or annulling of contract; the revocation or repealing of the contract by mutual consent of the parties to the contract, or for cause by either party to the contract.
Term
Reservation
Definition
A right retained by the grantor when conveying a property.
Term
Restriction
Definition
The term as used relating to real property means the owner of real property is restricted or prohibited from doing certain things relating to the property, or using the property for certain purposes.
Term
Return of the Investment
Definition
(1) Principal paid on a loan; (2) The return demand on income property for the depreciation of the improvements.
Term
Return on the Investment
Definition
(1) The interest paid on a loan; (2) The profit received on investment in income property.
Term
Right of Survivorship
Definition
Right to acquire the interest of a deceased joint owner; distinguishing feature of a joint tenancy.
Term
Riparian Rights
Definition
The right of a landowner to water, on, under or adjacent to his land.
Term
Sale-Leaseback
Definition
A situation where the owner of a piece of property wishes to sell the property and retain occupancy by leasing it from the buyer.
Term
Seasoned Loan
Definition
A loan that has been in existence long enough to show a pattern of payments.
Term
Secondary Mortgage Market
Definition
The market where existing loans are bought and sold.
Term
Section
Definition
A parcel of land, normally one mile square, containing 640 acres.
Term
Security Device
Definition
Document used when property is used as security for a loan; it can be a trust deed, a mortgage or a land contract.
Term
Servient Tenement
Definition
Property burdened by an easement.
Term
Setback Ordinance
Definition
An ordinance prohibiting the erection of a building or structure between the curb and the setback line.
Term
Severalty Ownership
Definition
Owned by one person only. Sole ownership.
Term
Social Obsolescence
Definition
Economic obsolescence. A loss in value caused by factors outside of the property lines.
Term
Special Assessment
Definition
Legal charge against real estate by a public authority to pay cost of public improvements such as street lights, sidewalks, street improvements, etc.
Term
Specific Lien
Definition
A lien which affects only a particular parcel of property.
Term
Specific Performance
Definition
A court action to compel performance of an agreement, such as forcing the sale of a property.
Term
Statute of Frauds
Definition
State law which provides that certain contracts must be in writing in order to be enforceable by law.
Term
Statute of Limitations
Definition
A state law which prevents court action by an injured party in a contract if not taken within specific time limits.
Term
Stock Cooperative Project
Definition
A subdivision where title to the property is held by a corporation. Stockholders receive a right of possession of a particular apartment.
Term
Straight Note
Definition
A note where only interest payments are made during the term of the loan. The entire principal balance is paid at the end of the term.
Term
Subject to Mortgage
Definition
When a grantee takes title to real property subject to a mortgage, the grantee is not responsible to the holder of the promissory note for the payment of any portion of the amount due. The grantee's maximum risk is his or her equity in the property.
Term
Sublease
Definition
A lease given by a lessee.
Term
Subordination Clause
Definition
A clause in a junior or second lien permitting retention of priority. A subordination clause may also be used in a first deed of trust permitting it to be subordinated to subsequent liens, as for example, the liens of construction loans.
Term
Substitution, Principle of
Definition
A principle of appraisal which affirms that the maximum value of a property tends to be set by the cost of acquiring an equally desirable and valuable substitute property assuming no costly delay is encountered in making the substitution.
Term
Syndicate
Definition
A group of investors who pool their money for a common investment.
Term
Take-Out Loan
Definition
A loan arranged by the owner or builder-developer for a buyer. The construction loan made for construction of the improvements is usually paid from the proceeds of this loan.
Term
Tax-Free Exchange
Definition
An exchange of "like for like" properties for the purpose of deferring income taxes.
Term
Tenancy in Common
Definition
Ownership by two or more persons who hold undivided interest, without right of survivorship; interests need not be equal.
Term
Title insurance
Definition
Insurance written by a title company to protect property owner against loss if title is imperfect.
Term
Township
Definition
A parcel of land six miles square, containing 36 sections and therefore, 36 square miles.
Term
Trade Fixtures
Definition
Articles of personal property annexed to real property, but which are necessary to the carrying on of a trade or business and are removable by the owner.
Term
Trust Account
Definition
A neutral bank account maintained by a broker for the deposit of money entrusted with him.
Term
Trust Deed
Definition
Deed given by the borrower to the beneficiary to be held pending fulfillment of an obligation, which is ordinarily repayment of a loan to the beneficiary. It gives naked legal title to a trustee.
Term
Trustee
Definition
One who holds legal title to a property in trust for another (the beneficiary) to secure the performance of an obligation.
Term
Trustee's Deed
Definition
A deed given by a trustee when property is foreclosed and sold at a trustee's sale.
Term
Trustor
Definition
One who deeds his property to a trustee to be held as security until he has performed his obligation to a lender under terms of a deed of trust.
Term
Undivided Interest
Definition
The interest of a co-owner in real property. His interest cannot be separated without court action.
Term
Unearned Increment
Definition
An increase in value of real estate due to no effort on the part of the owner; often due to an increase in population.
Term
Unenforceable
Definition
A contract that cannot be sued upon in a court of law.
Term
Unilateral Contract
Definition
An exchange of a promise for an act. Only one party is bound to perform.
Term
Unlawful Detainer Action
Definition
A court suit to evict a tenant.
Term
Valid
Definition
Having force, or binding force; legally sufficient and authorized by law.
Term
Variable Interest Rate
Definition
An interest rate in a loan which can be changed upon the happening of a certain event.
Term
Variance
Definition
A rezoning of a single parcel.
Term
Vendee
Definition
A purchaser; buyer.
Term
Vendor
Definition
Seller.
Term
Void
Definition
The have no force or effect; that which is unenforceable.
Term
Voidable
Definition
That which is capable of being adjudged void, but is not void unless action is taken to make it so.
Term
Voluntary Lien
Definition
Any lien placed on property with the consent of, or as a result of, the voluntary act of the owner.
Term
Warehousing
Definition
The process of collecting loans for later resale as a part of a package.
Term
Zoning
Definition
Act of city or county authorities specifying the type of use to which the property may be put in specific areas.
Term
To create an escrow, there must be
Definition
a binding contract
Term
escrow instructions can be
Definition
changed only by written agreement of both parties.
Term
The escrow holder acts in the capacity of
Definition
surety.
Term
Which must be licensed as escrow agents to perform such services?
Definition
Escrow companies
Term
In Southern California, escrows are MOST often held by
Definition
escrow companies.
Term
By law a licensed escrow agent must
Definition
be a corporation.
Term
A real estate broker can serve as an escrow
Definition
when she represents one of the parties to the transaction.
Term
The legal action that may be brought by an escrow holder is
Definition
interpleader
Term
Providing a copy of any buyer broker agreement is the responsibility of
Definition
the buyer
Term
Providing tenant information is the responsibility of
Definition
the seller
Term
Prorations at closing on amounts other than interest payments usually are based on
Definition
a 30-day month
Term
If closing is on May 19, what amount will be charged to the buyers on a total property tax of $4,320 paid by the sellers for the current tax year? Remember to use the standard number of days in the month.
Definition
$504
Term
Closing is on June 15, and rent of $2,400 has been prepaid for the current month. What amount will the seller be debited as closing if the buyer receives credit for the day of closing?
Definition
$1,280
Term
A buyer's settlement statement includes
Definition
loan origination fees
Term
The MOST thorough method of title check results in
Definition
an abstract of title
Term
A title plant consists of
Definition
a title company's lot books and general indexes
Term
Title insurance is paid as of the day
Definition
of closing
Term
Title insurance protects a buyer against
Definition
all claims except those excluded by the policy.
Term
Water rights are excluded from coverage in
Definition
a standard policy of title insurance.
Term
Lender's title insurance typically is paid by
Definition
the buyer
Term
Property taxes are ad valorem taxes, which means that they are
Definition
charged in relation to the value of the property taxed.
Term
The Smith's sale of their residence is
Definition
a reassessment event.
Term
The property tax year runs from
Definition
July 1 through June 30
Term
A lien in the amount of tax due is placed on all assessed real property on
Definition
January 1
Term
When all past-due property taxes are paid, the county tax collector issues
Definition
a certificate of redemption
Term
The buyer of property at an auction by the tax collector receives
Definition
a tax deed.
Term
A benefit assessment also may be called
Definition
a special assessment
Term
The use of property assessments was expanded by
Definition
the Mello-Roos Community Facilities Act.
Term
A deed may show on its face that which of the following taxes was paid?
Definition
Documentary transfer tax
Term
Sales and use taxes are the responsibility of
Definition
the State Board of Equalization
Term
In California there is a state sales tax on
Definition
fixtures sold as part of a business.
Term
The State of California collects
Definition
state income tax.
Term
A gift is made
Definition
when an individual voluntarily transfers property for anything less than its fair market value.
Term
Gift tax is payable when the total value of gifts to an individual in one year is more than
Definition
$14,000
Term
Sam gave his friend Joe $15,000 for his tuition at Old Ivy, sending the money directly to the school. Must a gift tax return be filed?
Definition
No, because this is not considered a gift.
Term
Mario died in 2014, leaving only his separate property estate valued at $500,000. Must an estate tax return be filed?
Definition
Yes
Term
The rate of federal income tax paid depends on the taxpayer's
Definition
tax bracket.
Term
Property that can be depreciated for income tax purposes is called
Definition
recovery property.
Term
With respect to investment property, an investor can make use of
Definition
mortgage interest deductions from property income.
Term
An apartment in San Francisco can be leased for a term of no more than
Definition
99 years.
Term
An office in Los Angeles can be leased for a term of no more than
Definition
99 years.
Term
Agricultural land can be leased for a term of no more than
Definition
51 years.
Term
A security deposit on furnished residential property can be no more than
Definition
three months' rent.
Term
If a question arises as to the validity of landlord's claim against a tenant's security deposit,
Definition
the tenant is presumed to be entitled to the security deposit.
Term
A landlord wants to give a tenant's apartment to her nephew. The landlord tries to drive the tenant out by constantly phoning him, visiting him, and insisting that his apartment be used to show prospective tenants for other units what the building is like. The landlord is violating the tenant's
Definition
covenant of quiet enjoyment.
Term
A landlord has a right of entry
Definition
in an emergency.
Term
Transfer of all of a tenant's rights under a lease is
Definition
an assignment.
Term
A lease may be renewed automatically only if
Definition
all of the statutory requirements are met.
Term
A dwelling is untenantable if it substantially lacks
Definition
a heating unit.
Term
Because a tenant complains about the condition of the building, the landlord may
Definition
investigate the complaint.
Term
Which may be considered in choosing a tenant?
Definition
Tenant's income.
Term
On May 15, a business owner notified her landlord that she would be vacating her retail store location on June 30. The business owner has a month-to-month periodic tenancy. Until what date will she incur rent?
Definition
June 30.
Term
A landlord must follow the legal requirements for an eviction
Definition
from leased premises.
Term
A landlord may begin eviction proceedings with
Definition
a notice to pay or quit.
Term
The sheriff or marshal can forcibly remove a tenant by
Definition
a writ of possession.
Term
The owner of 417 Main, an office building, receives a guaranteed monthly income from her tenants and pays no expenses. She has
Definition
a net lease.
Term
A property manager
Definition
is the property owner's agent.
Term
A tenant moved out of his apartment at the end of the lease term. The landlord will be allowed to increase the rent for a new tenant to reflect the current market value because the local rent control ordinance.
Definition
provides for vacancy decontrol.
Term
Trevor owns a vacant lot and employs an appraiser to determine the property's
Definition
highest and best use.
Term
Since the Riverside factory closed, houses in Sunny Acres are taking longer to sell, and prices have gone down. This is a result of
Definition
supply and demand.
Term
A house that benefits from the desirability of its neighboring properties is an example of the principle of
Definition
progression.
Term
A homeowner's deluxe five-bedroom house is in a neighborhood of modest three-bedroom houses. The value of the five-bedroom house will be affected because of the principle of
Definition
regression.
Term
An improvement to a house may or may not create a corresponding increase in the house's market value. This is an example of
Definition
contribution.
Term
The Miejas are looking forward to eventually retiring on the profit they will make from selling their house. Their attitude is an example of
Definition
anticipation.
Term
To calculate the market value of a 19th-century San Francisco Victorian-style mansion using the cost approach, you probably would use
Definition
replacement cost.
Term
The cubic-foot method of estimating construction cost is BEST used for
Definition
industrial properties.
Term
Appraiser Hansen estimated all direct and indirect construction cost of the Harley Building separately, then totaled them. She used
Definition
the quantity survey method.
Term
A single-family residence with a one-car garage may be an example of
Definition
functional obsolescence.
Term
Houses adjacent to a new highway will probably suffer from
Definition
incurable external obsolescence.
Term
Which is NOT a form of depreciation?
Definition
Straight-line method.
Term
The upper limit of a property's value usually is determined by
Definition
the cost approach.
Term
Vacancy and collection losses are subtracted from potential gross income to derive
Definition
effective gross income.
Term
The step in which the appraiser arrives at a final opinion of value is called
Definition
reconciliation.
Term
The MOST comprehensive method of conveying the result of an appraisal is
Definition
the self-contained report.
Term
In contracting for any work on someone else's property, a contractor's license is NOT needed
Definition
if the work costs less than $500
Term
A contractor's license can be suspended or revoked for
Definition
abandoning a project, violating building laws, breaching a construction contract.
Term
A type of roof with two steeply pitched planes is called
Definition
a gable roof.
Term
A Dutch colonial house is distinguished by
Definition
a gambrel room
Term
Ornate exterior woodwork is usually found on
Definition
a Queen Anne Victorian house.
Term
An architectural style in which homes share a common wall is called
Definition
a town house
Term
The location of a house on its site is called its
Definition
orientation
Term
The sun's arc in the sky is highest in
Definition
summer
Term
A good floor plan has
Definition
the kitchen near the garage.
Term
Earthquake protection is provided by
Definition
anchor bolts, cross-bracing, plywood sheathing.
Term
A two-story platform house is built
Definition
one story at a time.
Term
The vertical supports in a wood-frame house are called
Definition
studs.
Term
A post-and-beam frame house is built
Definition
with posts within the house that support beams.
Term
A brick or stone exterior finish is called
Definition
veneer.
Term
The main roof supports are
Definition
the rafters.
Term
A window that opens out is called
Definition
a casement window.
Term
A relatively inexpensive and easy-to-install interior wall finishing is
Definition
plasterboard, drywall and wallboard.
Term
Heat from sunlight reaching water-filled containers is used in
Definition
passive solar-heating systems.
Term
Every house sold in California must have at LEAST
Definition
one smoke detector.
Term
All water heaters must be
Definition
braced, anchored, or strapped.
Term
Land-use policies and goals are established through
Definition
the general plan
Term
The general plan must consider
Definition
housing at all income levels.
Term
Planning for future development does NOT include consideration of
Definition
Contractor's License Law.
Term
Zoning ordinances are an exercise of a government's
Definition
police power.
Term
A property owner deprived by a zoning ordinance of the privileges enjoyed by owners of other property in the vicinity may apply for
Definition
a variance.
Term
Land may be subdivided for purposes of
Definition
sale, lease, financing.
Term
The Subdivided Lands Law applies to subdivision of land into
Definition
5 or more parcels.
Term
An out-of-state subdivider of California land
Definition
must procure a public report.
Term
A standard subdivision includes
Definition
no common interests.
Term
A subdivision consisting of individually owned lots as well as areas owned in common is
Definition
a planned development.
Term
A subdivision consisting of individual ownership of airspace and areas owned in common is
Definition
a condominium project.
Term
A corporation holds title to property and shareholders having a right of occupancy to part of the property own the corporation in
Definition
a stock cooperative project.
Term
The subdivision public report is issued by
Definition
the Real Estate Commissioner.
Term
A final subdivision public report has an initial term of
Definition
five years.
Term
The Subdivision Map Act allows
Definition
local jurisdiction to determine whether a subdivision is desirable.
Term
A "proposed subdivision" is covered by
Definition
the Subdivision Lands Law.
Term
Disclosure of the fact that property is located in a special studies zone must be made by
Definition
the real estate agent who represents the seller.
Term
Discrimination in housing is prohibited by
Definition
both state and federal laws.
Term
A homeowner whose property is exempt from the requirements of the federal Fair Housing Act will still be subject to
Definition
the 1866 Civil Rights Act.
Term
The broadest prohibition against all forms of discrimination in the sale of residential real estate is found in
Definition
California law.
Term
Finance: The nature of the real estate financing relationship includes all of the following
Definition
collateral, leverage, hypothecation.
Term
Finance: In finance, leverage is applied to
Definition
use others' savings.
Term
Finance: Through December 2015, the total of U.S. mortgages outstanding on all types of property exceeded
Definition
$13 trillion.
Term
Finance: Local real estate markets are MOST affected by
Definition
zoning decisions.
Term
Finance: Of all the loans outstanding on real estate in the United States, the largest total amount of money is loaned on
Definition
one-to-four-family residential properties.
Term
Finance: All of the following participate in a national secondary market for real estate mortagages
Definition
Ginnie Mae, Freddie Mac, Fannie Mae.
Term
Finance: The secondary mortgage market is designed to
Definition
redistribute money nationally.
Term
Finance: Real estate cycles are primarily reflections of
Definition
supply and demand.
Term
Finance: We can view money as all of the following
Definition
as a medium of exchange, as a storehouse of purchasing power, as a standard of value.
Term
Finance: Our present monetary system is based on
Definition
a standard of confidence.
Term
Finance: The FDIC is involved in all of the following activities
Definition
insuring commercial bank deposits up to $250,000, insuring savings association deposits up to $250,000, & being appointed receiver for failed banks and thrifts.
Term
Finance: When a bank fails, the FDIC can take all of the following actions
Definition
liquidating the bank and its assets, merging the failed bank with another insured depository organization, & reimbursing depositors up to $250,000 for each amount.
Term
Finance: The Federal Reserve System is designed to
Definition
manage the economy.
Term
Finance: When the Fed sells securities, it tends to
Definition
slow a "hot" economy.
Term
Finance: The Fed's open market includes the sale and purchase of
Definition
U.S. Treasury issues.
Term
Finance: The U.S. Treasury is this nation's
Definition
fiscal manager.
Term
Finance: The Office of Thrift Supervision
Definition
is under the Comptroller of the Currency.
Term
Finance: Mortgage brokers do all of the following
Definition
arrange mortgages, collect placement fees, acts as noninstitutional lenders.
Term
Finance: The success of a mortgage broker depends upon all of the following
Definition
underwriting ability, the number of defaulted loans, & continuing relationship with investors.
Term
Finance: Mortgage bankers do all of the following
Definition
collect payments, arrange discounts, & lend their own money.
Term
Finance: Mortgage bankers are usually described as all of the following
Definition
as correspondents, as noninstutional lenders, & as intermediaries.
Term
Finance: When a mortgage banker establishes a line of credit with a commercial bank, the bank is acting as the mortgage banker's
Definition
warehouse for funds.
Term
Finance: Real estate investment trusts are all of the following
Definition
corporations, investment conduits, & owned by 100 or more investors.
Term
Finance: Tax-free bonds are issued to provide funds to finance houses for
Definition
low-income and middle-income homebuyers.
Term
Finance: Real estate bonds are issued to finance all of the following purposes
Definition
industrial park developments, municipal improvements, & subdivision offsite improvements.
Term
Finance: Unsecured bonds are called
Definition
debenture bonds.
Term
Finance: When a bond is paid from property taxes, it is
Definition
a general obligation bond.
Term
Finance: Discretionary income is money that is used for
Definition
investment.
Term
Finance: Commercial bank trust departments act as all of the following
Definition
executors, conservators, & guardians.
Term
Finance: Which of the following institutional lenders are the leading lender for one-to-four-family loans?
Definition
Thrift institutions.
Term
Finance: Which of the following is NOT an institutional lender
Definition
Mortgage broker.
Term
Finance: Which type of property has the highest total of mortgage loans outstanding against it?
Definition
One to four family
Term
Finance: Commercial banks participate in real estate finance through all of the following
Definition
trust departments, interim loans, & secondary markets.
Term
Finance: MOST commercial banks create long-term, fixed-rate real estate loans for
Definition
sale in the secondary market.
Term
Finance: Of the following categories, which is the MOST active in the multi-family loan market?
Definition
Life insurance companies
Term
Finance: When making nonamortized real estate loans, state-chartered banks in Finance: California are limited to which maximum percentage of the property's appraised value?
Definition
100%
Term
Finance: Life insurance companies:
Definition
make loans on large real estate projects, are concerned with safety and long-term stability, & make participation loans.
Term
Finance: California state-chartered savings banks are permitted all of the following activities
Definition
making loans of up to 100% of appraised value, making nonresidential loans to 40% of their total assets, & issuing checking accounts.
Term
Finance: A straight conventional loan includes
Definition
no third party insurance or guarantees.
Term
Finance: All of the following relationships are correct
Definition
DVA L/V ratio= 100%
FHA L/V ratio= 95%
conventional-guaranteed L/V ratio=90%
Term
Finance: The FHA is
Definition
a loan insurance agency.
Term
Finance: FHA loans made after December 1989
Definition
require qualification ratios of 31% and 43%.
Term
Finance: Which of the following is the MOST an eligible veteran may pay for a home under the current DVA loan formula?
Definition
No maximum limitation.
Term
Finance: The interest rates on an FHA-insured loan are established by
Definition
the market.
Term
Finance: The DVA loan guarantee program protects
Definition
the lender.
Term
Finance: A qualified veteran with full entitlement wishes to purchase a home with a $417,000 CRV. What is the correct down payment?
Definition
$0
Term
Finance: Financing for farms and ranches depends all of the following categories
Definition
productivity of the land, management skills, & climatic conditions.
Term
Finance: The Farm Credit System includes of the following participants
Definition
the Federal Credit Banks, the Production Credit Associations, & the Farmers Home Administration.
Term
Finance: The City of Los Angeles Mortgage Program provides mortgage loans for
Definition
eligible first-time homebuyers.
Term
Finance: The California Housing Agency provides loans for all of the following
Definition
low-rent apartment projects, first-time homebuyers, & down payment assistance.
Term
Finance: A lender must provide a Loan Estimate to the borrower within three business day of receipt of the borrower's loan application. The only fee the lender may collect from the borrower before the Loan Estimate is given is for
Definition
the credit report fee.
Term
Finance: ECOA is
Definition
a law prohibiting discrimination in lending.
Term
Finance: The federal Truth in Lending Act (Regulation Z)
Definition
provides borrowers with a comparative percentage rate.
Term
Finance: RESPA is designed to
Definition
provide borrowers with closing cost information.
Term
Finance: The Holden Act prohibits discrimination in lending on the basis of all of the following reasons
Definition
existing neighborhood conditions, national origin, & neighborhood ethnic composition.
Term
Finance: Under California usury laws, loans made by all off the following participants are exempt from usury ceilings
Definition
banks, credit unions, & pawnbrokers.
Term
Finance: All of the following encumbrances are considered junior loans
Definition
an equity loan, a wraparound contract for deed, & a second mortgage.
Term
Finance: The use of junior finance through owner carrybacks increases when
Definition
market interest rates are high.
Term
Finance: Junior finance is often utilized for all of the following
Definition
land improvements, home improvements, & low down payment purchases.
Term
Finance: In the event of a default of the priority senior loan, a junior lender can usually do all of the following
Definition
pay the senior loan balance in full, bid at the foreclosure sale, & foreclose against the junior borrower.
Term
Finance: Creating a junior loan at the same time as a senior loan is known as
Definition
piggy-back lending.
Term
Finance: When traded in the market, junior loans are usually sold at
Definition
a discount.
Term
Finance: Lenders may increase their yields on real estate loans by using all of the following techniques
Definition
raising the interest rate, charging origination fees, & adding a discount amount to the principal owed.
Term
Finance: Interest rates on junior loans carried back by homesellers are usually
Definition
equal to or lower than market rates
Term
Finance: Interest rates on real estate loans are established by
Definition
agreement between the lender and borrower.
Term
Finance: A cross-defaulting clause in a junior loan
Definition
automatically triggers a default on the junior loan.
Term
Finance: Which type of loan includes both personal property and real property?
Definition
Package mortgage.
Term
Finance: Under which type of loan is the seller cashed out?
Definition
Hard money mortgage.
Term
Finance: Under which type of loan are the lower payments in the early years of the loan with periodic payment increases?
Definition
Graduated-payment mortgage.
Term
Finance: Under which type of loan does the lender adjust the interest rate according to a prearranged index?
Definition
Adjustable-rate mortgage (ARM).
Term
Finance: Which type of loan is known as a mortgage for future advances?
Definition
Open-end mortgage.
Term
Finance: Under which type of loan are all payments received by the borrower?
Definition
Reverse annuity mortgage.
Term
Finance: Under which arrangement does a buyer lock in a seller with none, some, or all of the payments applying to the purchase price?
Definition
Lease option.
Term
Finance: Which type of loan is short term, interest-only, and is in a junior position?
Definition
Bridge loan.
Term
Finance: A leasehold mortgage based essentially upon a tenant's financial strength is called
Definition
a credit loan.
Term
Finance: The rights of a borrower to redeem property after a judicial foreclosure sales are described as
Definition
statutory rights of redemption.
Term
Finance: A note has all of the following attributes
Definition
it is an IOU, it is a promise to pay, & it is a negotiable instrument.
Term
Finance: A covenant of seisin states that the borrower
Definition
warrants title, as represented, to the lender.
Term
Finance: A deed of trust requires a borrower to pay all of the following
Definition
property taxes, hazard insurance premiums, & principal and interest payments.
Term
Finance: In a deed of trust, which of the following relationships is NOT always correct?
Definition
Trustee/beneficiary
Term
Finance: A provision in a real estate loan preventing any prepayment for a specified time is called
Definition
a lock-in clause.
Term
Finance: In an assumption, a due-on-sale clause in a mortgage contract allows the lender to do all of the following
Definition
review the credit of the buyer, call in the balance of the loan if not notified, & prohibit the assumption of the mortgage.
Term
Finance: To assume a loan is to do all of the following
Definition
agree to make its payments, become legally liable for its provisions, & be responsible for maintaining the property.
Term
Finance: To purchase a property "subject to" an existing mortgage is to do all of the following
Definition
agree to make the mortgage payments, be responsible for maintaining the property, & become the property's fee simple owner.
Term
Finance: The evaluation of the risks involved when issuing a new real estate loan is known as
Definition
underwriting.
Term
Finance: All of the following sources of funds are usually included in a borrower's income analysis
Definition
spousal earnings, regular overtime, & court-ordered child support.
Term
Finance: A borrower with a 2:1 current asset ratio has twice as many
Definition
assets as liabilities and is probably a good credit risk.
Term
Finance: The direct sales comparison approach to estimating a property's value is based primarily on
Definition
adjusting comparable properties' recent sales prices.
Term
Finance: The income approach to the estimate of a property's value is based primarily on
Definition
the property's ability to generate net income.
Term
Finance: The value of a 50-year-old house would probably BEST be estimated by using
Definition
the direct sales comparison approach.
Term
Finance: An example of a constructive notice is
Definition
a recorded deed.
Term
Finance: An abstract of title is
Definition
a historical review of a property's title.
Term
Finance: A standard title insurance policy insures against
Definition
errors in matters of record.
Term
Finance: A fault in a title can be corrected by
Definition
a suit to quiet title.
Term
Finance: Property surveys sometimes discover problems in all of the following categories
Definition
legal descriptions, easements, & encroachments.
Term
Finance: In California, real estate transfer disclosures include disclosures for all of the following categories
Definition
age and condition of the structure, soil contamination, & deed restrictions.
Term
Finance: Disclosures for possible geological hazards include all of the following events
Definition
flooding, landslides & earthquakes.
Term
Finance: Prior to closing a real estate loan, every borrower must receive all of the following items
Definition
an estimate of costs, an estimate of the amount of the monthly installments, & information relevant under Regulation Z, RESPA, and EOCA.
Term
Finance: In a loan closing, the borrower is usually charged with all of the following items
Definition
the prorated interest, the title insurance premium, & the recording fees.
Term
Finance: Fannie Mae and Freddie Mac are able to replenish their own funds, enabling them to purchase loans from primary lenders by
Definition
selling mortgage-backed securities
Term
Finance: Lenders may order either a mandatory or standby commitment to sell loans to Fannie Mae through
Definition
the administered price system.
Term
Finance: Which of the following statements regarding Fannie Mae guidelines is TRUE
Definition
Loans with a higher than 80% LTV require private mortgage insurance.
Term
Finance: The BEST description of a nonconforming loan is one that
Definition
does not meet Fannie Mae and Freddie Mac
Term
Finance: Fannie Mae debt-to-income ratios requirement is
Definition
28/36
Term
Finance: Freddie Mac was originally chartered to
Definition
provide a secondary market for savings associations.
Term
Finance: The agency established to ensure financial safety and soundness of Fannie Mae and Freddie Mac is
Definition
the Federal Housing Finance Agency (FHFA).
Term
Finance: The MOST important role played by Ginnie Mae today is
Definition
guaranteeing mortgage-backed securities payments
Term
Finance: Which statement regarding Ginnie Mae is TRUE?
Definition
Ginnie Mae is under the supervision of HUD.
Term
What agency is a government-sponsored enterprise?
Definition
GNMA
Term
Finance: MOST loan defaults occur when a borrower does NOT
Definition
make the principal and interest payments on time.
Term
Finance: A foreclosure will usually be initiated when
Definition
a borrower can no longer make payments, even after forbearance, and the value of the collateral has dropped below the outstanding balance of the loan.
Term
Finance: When all other adjustments have been made and have failed, a foreclosure procedure may still be avoided by
Definition
a voluntary conveyance of a deed.
Term
Finance: After an FHA-insured loan is foreclosed, any of the following may transpire
Definition
the FHA will reimburse the lender in full and in cash, the FHA will reimburse the lender in full and in debentures, & the lender will secure title to the property, refurbish it, and sell it.
Term
Finance: When a veteran defaults on a DVA loan and it is foreclosed, the Department of Veterans Affairs may do all of the following
Definition
bring the loan current, securing subrogation rights against the borrower, pay the lender in full and in cash, taking title to the collateral, & pay the lender the difference between the deteriorated collateral's value at the foreclosure and balance of the loan up to the maximum limits, allowing the lender to keep the collateral.
Term
Finance: The MOST common foreclosure procedure in California is
Definition
the power-of-sale
Term
Finance: Under judicial foreclosure, a borrower may do all of the following
Definition
reinstate the loan prior to foreclosure by paying the delinquencies and costs, redeem the property after the public sale by paying the loan in full plus costs in three months to one year, depending on circumstances, & remain in possession of the property after the public sale for prescribed time.
Term
Finance: In a foreclosure of a deed of trust, all of the following documents utilized are
Definition
the declaration of default, the notice of sale, & the trustee's deed.
Term
Finance: When a deed of trust is foreclosed, the defaulting borrower has at LEAST which of the following periods to reinstate the loan?
Definition
No redemption allowed.
Term
Finance: When foreclosing under a deed of trust, the trustee must do all of the following
Definition
post a notice on the door of the property, advertise in a newspaper of general circulation, & notify all interested parties by registered or certified mail.
Term
Finance: Profits secured through the refinancing process are
Definition
not taxable until the property is sold.
Term
Finance: When a builder, financier, and manager enter into a partnership to construct and own an office building, it is called
Definition
a joint venture.
Term
Finance: Realized capital gain
Definition
is the difference between the total consideration received and the adjusted book basis of the property transferred.
Term
Finance: A seller-tenant in a sale-leaseback-buyback arrangement benefits from all of the following
Definition
immediate cash receipts, continued possession of the property, & tax-deductible rent.
Term
Finance: When a buyer refinances a seller's property using the proceeds from the new loan to satisfy the balance of the existing loan and to make the down payment, this buyer is
Definition
trading on the seller's equity.
Term
Finance: When a lender buys a project from a developer and then immediately sells it back on a contract that runs for 10 years longer than the financing term, the money paid over this extra time is called
Definition
the kicker.
Term
Finance: Building an estate by refinancing and purchasing additional properties is called
Definition
pyramiding.
Term
Finance: Equity participation includes all of the following techniques
Definition
sale-buyback, split-fee financing, & joint ventures.
Term
Finance: Recognized capital gain is
Definition
the portion of the realized gain that is subject to income tax in the year received.
Term
Finance: When property is refinanced, any profit received from the proceeds of the new loan is
Definition
not considered realized and is not subject to income tax until the property is sold.
Term
Quiz CH1: Disintermediation occurs when
Definition
The money market certificate was created to offer short-term flexible interest rates; however, major money market investors countered by developing high-yield securities with any restrictions, minimum balances, or withdrawal penalties. The result was a serious outflow of funds, disintermediation, from the nation's savings associations.
Term
Quiz CH1: A fundamental aspect of real estate finance is the ability of borrowers to remain in possession and control of their property. This is defined as
Definition
The ability to remain control of the property while borrowing against it is called "hypothecation".
Term
Quiz CH1: The Secure and Fair Enforcement for Mortgage Licensing Act of 2008(SAFE Act) was designed to
Definition
minimize the potential for fraudulent lending activities.
Term
Quiz CH1: Real estate finance is basically a manifestation for our
Definition
credit system economy.
Term
Quiz CH1: One way to increase a property's value without adding any physical improvement is to
Definition
rezone it.
Term
Quiz CH1: The demographics of a real estate cycle would probably include all of the following
Definition
ages, location, & family structure. NOT religion.
Term
Quiz CH1: Lenders having a cash surplus in a low demand area would most likely
Definition
Slow-growth, low-demand are lenders could invest their surplus funds by purchasing mortgages from these agencies. (purchase loans in the secondary market.)
Term
Quiz CH1: Reliance on borrowed capital more than on equity funds would be known as the use of
Definition
leverage.
Term
Quiz CH1: The real estate cycle begins anew when
Definition
demand exceeds supply.
Term
Quiz CH1: The fact that a 1,500 square foot house sells for $300,000 in Los Angeles, $85,000 in Fresno, and $45,000 in El Centro is based on the property's fixity and its being subject to the economies of which of the following markets?
Definition
Local.
Term
Quiz CH2: The California Bureau of Real Estate
Definition
- investigates complaints against
-licensees
enforces provisions of the real estate law to achieve maximum protection for purchasers of real estate property and persons dealing with real estate licensee
- regulates subdivisions, nonexempt franchises, and real property securities
- screens and qualifies applicants for license
- requires endorsements by the Bureau of mortgage loan originators
- investigates nonlicensees allegedly doing business for which a real estate license is required
Term
Quiz CH2: All of the following statements about the FDIC are true
Definition
insures depositors accounts, controls the Deposit Insurance Fund, and may merge failed institutions with other institutions.
Term
Quiz CH2: When the Federal Reserve raises its members' reserve requirements, it is acting to
Definition
decrease financial activities.
Term
Quiz CH2: Deposits in banks and thrifts are insured by the
Definition
FDIC
Term
Quiz CH2: The Federal Home Bank System
Definition
provides its members with a national market for their securities.
Term
Quiz CH2: Which agency is responsible for handling the assets of failed savings institutions?
Definition
Federal Deposit Insurance Corporation.
Term
Quiz CH2: From an economic theory point of view, money can be described as a
Definition
standard of value.
Term
Quiz CH2: The Federal Reserve is currently responsible for all of the following operations
Definition
maintaining sound credit conditions, stabilizing values, and counteracting inflationary and deflationary movements.
Term
Quiz CH2: Economic stability is linked the supply of costs and money. Thus, all of the following statements are correct
Definition
The larger the supply of money available, the greater the economic activity.
Term
Quiz CH2: The Federal Reserve is
Definition
a central banking system.
Term
Quiz CH3: Commercial banks tend to make loans for
Definition
Term
Quiz CH3: Life insurance companies become partners with project developers through the use of commercial loans called
Definition
Term
Quiz CH3: All of the sources of funds for real estate finance are considered financial intermediaries
Definition
Term
Quiz CH3: State-chartered savings and loan associations regulated by the California Department of Savings and Loans are authorized to lend up to what percent of the appraised value of the collateral for a real estate mortgage loan?
Definition
Term
Quiz CH3: Which institutional lender has the most flexibility mortgage lending activities?
Definition
Term
Quiz CH3: The department in a commercial bank that manages relatively large quantities of money and property for their beneficiaries is the
Definition
Term
Quiz CH3: Which of the following institutional lenders is increasing its participation in real estate finance?
Definition
Term
Quiz CH3: The pension funds tend to invent in which of following types of real estate investments?
Definition
Term
Quiz CH3: Savings institutions major providers of home mortgage loans, are also referred to as
Definition
Term
Quiz CH3: Which of the following statements is true regarding life insurance companies?
Definition
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