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Question 1 of 22
1. Question
A type of lender that is not a depository institution and that makes and services loans on behalf of large investors.
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Question 2 of 22
2. Question
an individual or company that arranges loans between borrowers and investors, but does not service the loans.
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Question 3 of 22
3. Question
One percent of the amount of a loan
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Question 4 of 22
4. Question
A fee that a lender charges to cover the administrative costs of processing a loan
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Question 5 of 22
5. Question
A fee that a lender may charge to increase the yield on the loan, over and above the interest rate.
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Question 6 of 22
6. Question
An individual’s total personal assets minus his total personal liabilities.
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Question 7 of 22
7. Question
Match the words to their correct definitions
Sort elements
- loan underwriting
- stable monthly income
- Automated underwriting
- Annual percentage rate
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Evaluating the creditworthiness of the buyer and the value of the property to determine if a loan should be approved
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Income that satisfies the lender's standards of quality and durability
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Analysis of a loan application with a computer program that makes a preliminary recommendation for or against approval
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Under the Truth in Lending Act, the relationship of the total finance charge to the loan amount, expressed as an annual percentage
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Question 8 of 22
8. Question
Match the words to their correct definitions
Sort elements
- Income ratios
- Housing expense to income ratio
- Debt to income ratio
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Percentages used to determine whether a loan applicant's stable monthly income is sufficient.
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A percentage that measures a loan applicant's proposed mortgage payment against her stable monthly income.
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A percentage that measures all of the loan applicant's monthly obligations against the stable monthly income.
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Question 9 of 22
9. Question
A loan that is repaid by the end of it’s term by means of regular principal and interest payments
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Question 10 of 22
10. Question
A second loan to help pay the downpayment or closing costs associated with the primary loan
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Question 11 of 22
11. Question
Match the words to their correct definition
Sort elements
- Loan to value
- PMI
- MIP
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The relationship between the loan amount and the property's appraised value or sales price, whichever is less.
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Private mortgage insurance, designed to protect lenders from the greater risks of high LTV conventional loans
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The mortgage insurance premiums required for FHA-insured loans
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Question 12 of 22
12. Question
A loan repaid over it’s term at an unchanging rate of interest
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Question 13 of 22
13. Question
A loan that allows the lender to periodically adjust the loan’s interest rate to reflect changes in the cost of money
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Question 14 of 22
14. Question
A published rate that is a reliable indicator of the current cost of money
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Question 15 of 22
15. Question
The difference between the index value on an ARM and the interest rate the borrower is charged
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Question 16 of 22
16. Question
When unpaid interest is added to the loan balance
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Question 17 of 22
17. Question
Any institutional loan that is not insured or guaranteed by a government agency
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Question 18 of 22
18. Question
A loan that does not meet the underwriting standards of the major secondary market agencies
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Question 19 of 22
19. Question
Match the words to their correct definitions.
Sort elements
- certificate of eligibility
- residual income
- notice of value
- rural housing service
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The document that establishes a veteran's eligibility to apply for a VA home loan
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The amount of monthly income a VA borrower has left over after deducting monthly expenses and taxes
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The document issued when a home is appraised in connection with the underwriting of a VA loan.
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A federal agency that makes and guarantees loans to low or moderate income borrowers to purchase,build or rehabilitate homes in rural areas.
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Question 20 of 22
20. Question
Lending practices used by unscrupulous lenders and brokers to take advantage of unsophisticated borrowers
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Question 21 of 22
21. Question
Match the words to their correct definitions.
Sort elements
- predatory steering
- fee packing
- Loan flipping
- Predatory property flipping
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Steering a buyer toward a more expensive loan when the buyer could qualify for a less expensive one
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Charging interest rates, points, or processing fees, that far exceed the norm and aren't justified by the cost of the services provided.
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Encouraging a homeowner to refinance repeatedly in a short period.
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Buying a property at a discount and then rapidly reselling it to an unsophisticated buyer for an inflated price.
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Question 22 of 22
22. Question
Match the words to their correct definitions.
Sort elements
- disregarding a borrower's ability to pay
- fraud
- ballon payment abuses
- excessive or unfair prepayment penalties
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Making a loan based only on the property's value, without using appropriate underwriting standards to determine whether the borrower can afford the loan payments.
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Misrepresenting or concealing unfavorable loan terms or excessive fees, falsifying documents, or using other fraudulent means to induce a prospective buyer to enter into a loan agreement.
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Making a partially amortized or interest-only loan with low monthly payments, without disclosing to the borrower that a large balloon payment will be required after a short period.
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Imposing an unusually large penalty, failing to limit the penalty period to the first few years of the loan term.
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