What this section covers: Financing concepts, loan types and mortgage clauses, FHA, VA, USDA and conventional loans, PMI, TILA, TRID, RESPA, ECOA, Settlement and closing.
5 free practice questions
Click an answer: you see at once whether it is right, with the explanation.
-
Question 1When must the borrower receive the Closing Disclosure for most mortgage loans?
Show the answer
Answer: B — No later than three business days before consummation.
The creditor must ensure the consumer receives the Closing Disclosure no later than three business days before consummation, giving time to compare it with the Loan Estimate.
Checked against: 12 CFR 1026.19(f)(1)(ii)
-
Question 2In a lien-theory state, what does a mortgage give the lender?
Show the answer
Answer: C — A lien on the property, while the borrower keeps title.
In lien-theory states, the borrower holds title and the mortgage creates a lien for the lender. In title-theory states, the lender (or a trustee) holds title until the loan is paid off.
Checked against: National outline VII.A.2 Lien theory vs. title theory and deed of trust
-
Question 3In a deed of trust, the lender is called the:
Show the answer
Answer: D — Beneficiary.
In a deed of trust, the borrower (trustor) conveys title to a neutral trustee for the benefit of the lender (beneficiary). The trustee reconveys title when the loan is paid or may sell the property if the borrower defaults.
Checked against: National outline VII.A.2 Lien theory vs. title theory and deed of trust
-
Question 4A title company offers a real estate agent $200 for every buyer the agent refers on a federally related mortgage loan. Under RESPA this is:
Show the answer
Answer: A — A prohibited kickback for a referral.
RESPA Section 8 prohibits giving or accepting any fee, kickback or thing of value for referring settlement service business on a federally related mortgage loan. A referral is not a compensable service.
Checked against: 12 CFR 1024.14(b) No referral fees
-
Question 5Under the Homeowners Protection Act, PMI on a fixed-rate loan terminates automatically, if the borrower is current, when the principal balance is first scheduled to reach what percentage of the property's original value?
Show the answer
Answer: C — 78%.
Automatic termination occurs on the date the balance is first scheduled, under the initial amortization schedule, to reach 78% of the original value, if the borrower is current. The borrower may request cancellation earlier, at 80%, if the other conditions are met.
Checked against: 12 U.S.C. 4901 (termination date) and 4902(b)
Instant access: by paying you request immediate access to the digital content and acknowledge you lose your right to cancel.
More Real Estate Exam (national portion) practice
Full free Real Estate Exam (national portion) practice test
Mixed questions, test format and official rules.
Real property, legal descriptions and land use practice questions
5 free questions
Ownership, transfer and title practice questions
5 free questions
Property value and appraisal practice questions
5 free questions
Contracts and agency practice questions
5 free questions
Real estate practice and fair housing questions
5 free questions
Disclosures and environmental issues practice questions
5 free questions
Real estate math practice questions
5 free questions
Pearson VUE and PSI are trademarks of their owners. passmock is not affiliated with or endorsed by Pearson VUE, PSI Services, any state real estate commission or department, or any real estate school. Original practice questions, not questions from the real test.
Short on time? A professional can help
Prefer to work with a professional? A tutor, a prep course or a driving school: we can pass your request to up to 3 partners. Free, no obligation; passmock does not teach. How to choose.