Chapter Quiz

1. The FHA title that is used to purchase homes is:

A. Title I

B. Title II

C. Title III

D. Title IV

2. FHA-insured loans insure lenders against

A. Decline in real estate values.

B. Loss due to foreclosure.

C. Loss due to borrowers losing their jobs.

D. Late payments by borrowers.

3. Among the secondary objectives and results accomplished by the FHA are:

A. Comprehensive system of valuing property and land mortgage risks

B. Minimum standards of construction

C. Scientific subdivision planning to protect against neighborhood deterioration

D. All of the above

4. The FHA has established certain MPRs that must exist before they will insure a loan. MPR is an abbreviation for:

A. Maximum probability ratio

B. Mortgage protection rate

C. Minimum property requirements

D. Market price rating

5. A program where GNMA and FNMA for buying loans at par, which is less than market value, is known as:

A. A pass through

B. The Tandem plan


D. Discounting

6. When the Federal Reserve Bank feels that there is an inflationary trend in the United States, it is likely to do which of the following:

B. Increase the discount rate

C. Enter into the government bond market in a selling capacity

D. All of the above

7. The term CRV refer to:

A. Certified regional valuations.

B. Certified Reasonable value.

C. A loan guaranteed by the Department of Veterans Affairs.

D. A real estate agent who specializes in GI loans.

8. The Federal Home Loan Bank:

A. Insures savings and loan associations against losses

B. Acts as a "banker's bank"

C. Insures commercial bank depositors against loss

D. All of the above

9. The Federal National Mortgage Association:

A. Is a stockholder-owned corporation

B. Purchases FHA, DVA and conventional loans

C. Is the leading secondary money market for mortgage notes

D. All of the above

10. The following is used as the security instrument to finance a Cal-Vet loan:

A. Deferred deed

B. Land contract

C. Mortgage

D. Trust deed

Answer Key: 1-B, 2-B, 3-D, 4-C, 5-B, 6-D, 7-B, 8-A, 9-D, 10-B



This chapter covers conventional loans, their advantages and disadvantages, and how to compare one lender with another. Buy-down loans are explained, and several examples are given. The California Fair lending Regulations are outlined and analyzed. The chapter concludes with a discussion of private mortgage insurance companies. We will then look into the two types of loan, the conventional and nonconventional which was discussed in previous chapter.

Best Investment Tips and Ideas

Best Investment Tips and Ideas

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