Chapter 14 Quiz

Question 1 of 15

1. Question

Which of the following events would terminate an escrow?

Death or incapacity of a party
Revocation of the escrow instructions by the broker
Mutual agreement of the parties
Withdrawal from escrow by either party

Question 2 of 15

2. Question

Under the Real Estate Settlement Procedures Act, a lender must provide the borrower with:

a uniform settlement statement
a property disclosure statement
the loan’s annual percentage rate
certified copies of buyer and seller closing statements

Question 3 of 15

3. Question

Which of the following would not be prorated at closing on the sale of a rental property?

Prepaid property taxes
Interest on seller’s existing loan
Security deposit
Interest on buyer’s new loan

Question 4 of 15

4. Question

The buyer’s good faith deposit appears on the settlement statement as a:

debit for the buyer, and as a credit for the seller
credit for the buyer, and as a debit for the seller
credit for the buyer only
debit for the buyer only

Question 5 of 15

5. Question

What is the primary purpose of a settlement statement?

To provide a detailed account of each party’s expenses and credits, and the amount each will receive or be required to pay at closing
To disclose the true costs of financing to both buyer and seller
To provide documentary evidence of closing costs for state and federal authorities
To provide the necessary documentation for a proper conveyance of title

Question 6 of 15

6. Question

The property appraisal cost $250. In a typical real estate transaction, this expense would be listed as a:

$125 debit to the buyer and $125 debit to the seller
$250 debit to the buyer
$250 debit to the seller
$250 debit to the buyer and a $250 credit to the seller

Question 7 of 15

7. Question

Which of the following would normally be a debit to the buyer?

Commission
Unpaid property taxes
Prepayment penalty
Loan origination fee

Question 8 of 15

8. Question

A property is sold on a land contract. Where in the settlement statement would the contract price be noted?

Only as a debit for the buyer
Only as a debit for the seller
As a credit for the buyer and a debit for the seller
As a debit for the buyer and a credit for the seller

Question 9 of 15

9. Question

RESPA applies to all of the following except:

a purchase money first loan made by a bank
a senior mortgage loan made by a mortgage banker to finance a condominium unit
a loan used to finance 50 acres for residential development
a VA loan used to finance a fourplex

Question 10 of 15

10. Question

Which of the following is true about a settlement statement?

The sum of one party’s debits must equal the sum of the other party’s credits
The buyer’s total debits and credits must match the seller’s total debits and credits
The buyer’s total debits must equal the buyer’s total credits
The balance due to the seller is listed in the seller’s credit column

Question 11 of 15

11. Question

Under the Real Estate Settlement Procedures Act, how much can an escrow agent charge for preparation of the uniform settlement statement?

nothing
$25
1/2 of 1% of the loan amount
1% of the loan amount

Question 12 of 15

12. Question

Where is prepaid interest noted on the settlement statement?

Only as a credit for the seller
Only as a credit for the buyer
Only as a debit for the seller
Only as a debit for the buyer

Question 13 of 15

13. Question

What kind of lawsuit would an escrow agent file if he found himself holding funds whose ownership was disputed by the two parties?

Declaratory relief
Eminent domain
Interpleader
Unlawful detainer

Question 14 of 15

14. Question

Which of the following determines under what conditions and at what time the escrow agent will distribute the money and documents to the parties in a real estate transaction?

Escrow instructions
Uniform settlement statement
Purchase and sale agreement
Listing agreement

Question 15 of 15

15. Question

A rental property is sold. The tenant paid the $900 monthly rent on the first of the month, and the transaction closed on the tenth of the month. Which of the following statements is true?

Seller owes buyer $600
Buyer owes seller $600
Seller owes buyer $300
Buyer owes seller $300

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