1. A lender offers you a fixed-rate mortgage for $145,000 at 6% for 30 years, monthly payments, with 2.625 discount points. What is the APR for this loan?
1) 6.17%
2) 9.75%
3) 6.25%
4) 8.625%
5) none of the above
2. The Federal National Mortgage Association was formed in part to:
1) buy and sell VA mortgages
2) buy and sell FHA mortgages
3) buy and sell conventional mortgages
4) none of the above
3. The major difference between RAP and GAAP was that RAP allowed thrifts the choice of whether or not to report the gains or losses on the disposition of certain assets.
1) True
2) False
4. The main risk for stockholders of thrifts following the Zombie theory was the required infusion of additional equity capital.
1) True
2) False
5. In a buy-down, the seller agrees to pay a portion of the interest cost for the buyer/borrower for some stipulated time period.
1) True
2) False
6. The outstanding balance of a mortgage at a given point in time is the present value of the remaining stream of payments discounted at the contract rate.
1) True
2) False
7. Negative amortization occurs when the loan balance increases over time.
1) True
2) False
8. A major contention in the court cases of the 1960s and 1970s addressed whether the due-on-sale clause could be enforced for the purpose of portfolio restructuring.
1) True
2) False
9. The Federal National Mortgage Association was originally established in 1938 for the purpose of buying FHA mortgages.
1) True
2) False
10. In order to derive the mortgage constant factor one must know the amount of funds to be borrowed.
1) True
2) False
11. The Truth-in-Lending law:
1) requires the lender disclose the APR on a mortgage loan
2) requires the lender disclose the total finance charges on a mortgage loan
3) provides for penalties for failure to accurately disclose the APR
4) all of the above