Real Estate Finance & Mortgages 3

Question 1

RESPA (Real Estate Settlement Procedures Act) primarily protects consumers by:

Accepted Answer

Requiring disclosure of settlement costs and prohibiting kickbacks

Answer

Setting maximum mortgage rates

Answer

Mandating home warranties

Answer

Regulating property taxes

Question 2

TILA (Truth in Lending Act) requires lenders to disclose the:

Accepted Answer

Annual Percentage Rate (APR) and total finance charges

Answer

Appraised value of the property

Answer

Seller's net proceeds

Answer

Agent's commission structure

Question 3

An escrow account held by a mortgage servicer is used to pay:

Accepted Answer

Property taxes and insurance premiums on behalf of the borrower

Answer

The broker's commission at closing

Answer

The borrower's credit card bills

Answer

HOA dues only

Question 4

PITI stands for:

Accepted Answer

Principal, Interest, Taxes, Insurance

Answer

Property, Insurance, Taxes, Interest

Answer

Purchase, Investment, Title, Income

Answer

Principal, Index, Term, Interest

Question 5

A wraparound mortgage is a form of seller financing where:

Accepted Answer

A new loan wraps around and includes the existing mortgage balance

Answer

The seller pays off the existing mortgage

Answer

The buyer assumes the seller's mortgage only

Answer

The lender wraps PMI into the loan

Question 6

Seller financing (owner financing) means the:

Accepted Answer

Seller acts as the lender, extending credit to the buyer directly

Answer

Seller helps the buyer get a bank loan

Answer

Government subsidizes the purchase price

Answer

Title company funds the transaction