Real Estate Real Estate Law & Regulations 3

Question 1

Foreclosure is the legal process by which a lender:

Accepted Answer

Forces the sale of a property to recover an unpaid mortgage debt

Answer

Refinances a delinquent loan at a lower rate

Answer

Transfers a mortgage to another lender

Answer

Places a mechanic's lien on a property

Question 2

A 1031 exchange (like-kind exchange) allows a real estate investor to:

Accepted Answer

Defer capital gains taxes by reinvesting proceeds into a like-kind property

Answer

Sell property and receive all proceeds tax-free permanently

Answer

Exchange residential property for commercial property with no restrictions

Answer

Combine two investment properties into one

Question 3

In a non-judicial (trustee's sale) foreclosure, the property is sold without:

Accepted Answer

Court supervision, using the power of sale clause in the deed of trust

Answer

A public auction

Answer

Any notice to the borrower

Answer

Lender involvement

Question 4

FIRPTA (Foreign Investment in Real Property Tax Act) requires that when a foreign seller sells US real property, the buyer must:

Accepted Answer

Withhold a percentage of the sales price and remit it to the IRS

Answer

Pay an extra transfer tax

Answer

Obtain special financing

Answer

Notify the state real estate commission

Question 5

A certificate of occupancy (CO) is issued by a local government agency to certify that:

Accepted Answer

A building complies with applicable building codes and is safe to occupy

Answer

A property has sold and closed escrow

Answer

A tenant has vacated the premises

Answer

A property appraisal is complete

Question 6

The Equal Credit Opportunity Act (ECOA) prohibits lenders from discriminating against loan applicants based on:

Accepted Answer

Race, color, religion, national origin, sex, marital status, age, or receipt of public assistance

Answer

Credit score and debt ratio

Answer

Loan amount requested

Answer

Type of property purchased