FREE PSI Real Estate Financing MCQ Test Questions and Answers
A contract is _____ when one party fails to fulfill a condition.
When one party to a legally binding agreement fails to fulfill its obligations under the agreement, this is known as a breach of contract. Oral and written contracts can breach. A breach of contract can be resolved through negotiations between the parties or in court.
Condominiums are better than detached single-family homes because:
Condos often cost less to purchase, insure, and maintain than single-family homes. They usually cost less than single-family homes, which can be even more noticeable in expensive areas.
Inverse condemnation lawsuits are filed by:
A homeowner who believes that a government agency has taken or damaged their property without giving them reasonable compensation may file an inverse condemnation case.
Federal laws about truth-in-lending are also called _____.
The Truth in Lending Act, or TILA, which is also called regulation Z, says that lenders must tell borrowers about all fees and charges that come with a loan. This federal law from 1968 was made to encourage honesty and clarity by requiring lenders to tell consumers about the terms and costs of their loans.
The relationship in which the principal puts the agent in a position of trust and confidence is called:
One party has a fiduciary relationship with another when the first party places trust, confidence, and dependence in the second party and the second party has an obligation to act for the benefit and interest of the first party. The parties' actions or an express agreement may establish the fiduciary relationship.
If an older structure cannot be equipped with air conditioning, it is an example of:
A type of depreciation called functional obsolescence happens when a structure or piece of property becomes obsolete as a result of advanced technology or style. It can also happen when a property or structure can no longer be used for its original purpose.
It is common practice for a property owner and management to get into an agency partnership by ______.
A signed property management agreement establishes an agency relationship between a property owner and a property manager. This agreement is a very important document because it solidifies the relationship between the owner and the property manager.
A borrower has failed to pay the mortgage. There is an acceleration clause in the mortgage. This gives the lender the chance to:
A loan agreement's acceleration clause allows the lender to demand the borrower to pay off the debt in full under specified conditions. Missing too many payments usually activates the acceleration clause.
The agreement that defines the legal rights of the buyer and seller in a real estate transaction is called the ______.
The purchase contract or real estate purchase agreement is used to establish the legal rights of the buyer and seller in a real estate transaction. The purchase price, closing date, contingencies, and other terms are in this contract.
FHA acts most like:
The FHA is a government agency in the US that backs loans from FHA-approved lenders who meet certain requirements. If a borrower doesn't pay their mortgage, the FHA will pay the lender back. Most of the time, the FHA works like an insurance company.
Usury laws were made to protect the:
Usury laws limit how much interest can be added to a loan. They try to stop lenders from charging too much interest on loans by putting a limit on how much interest can be charged. The goal of these laws is to protect borrowers.
Who ensures the property has good title before closing?
A title agent is a person who works in real estate and makes sure that the title to a piece of property or land is valid.
A couple advertised their house with a broker. The sale ended when the seller found a buyer after two months. The seller did not have to pay the broker a commission. This listing was probably:
A contract between a seller and a real estate broker is an exclusive agency listing. The broker agrees to be the agent or legal non-agency representative in this contract. Property's legal representation is the broker or agency. If the home sells through the seller's own efforts, like when a friend or someone who sees the seller's social media post buys it, the seller doesn't have to pay the broker's commission.
If a debtor refuses to pay after a judgment has been issued, how may the creditor collect?
A court order authorizing an officer to take legal action, like as selling a debtor's property, in order to satisfy a debtor's financial obligations. A writ of execution can enforce a judgment against a defendant who refuses to pay.
Most states sell foreclosed properties through:
Foreclosure properties in the majority of states must be sold at public auction. The mortgagee keeps the property if it doesn't sell at auction and then resells it through a regular real estate transaction. Regarding what occurs if a foreclosed home sells for less than the mortgagor's outstanding debt, state regulations differ.
What does the underwriter do?
One of an underwriter's responsibilities is to assess the safety of a loan by looking at the borrower's past payment history and the amount of collateral that would be available in the event of a default. They assess and take on the risk of a mortgage, insurance policy, loan, or investment on behalf of another party in exchange for payment.