1
Q
Which lien affects all real and personal property of a debtor?
- Specific
- Voluntary
- General
- Staturoy
A
General
2
Q
Priority of liens refers to the
- Order in which a debtor assumes responsibility for payment of obligations
- Dates liens are filed for record
- Order in which liens will be paid if property is sold to satisfy a debt
- fact that specific liens have greater priority than general liens
A
Fact that specific liens have greater priority than general liens
3
Q
Which of these is a lien on real estate made to secure payment for a specific municipal improvement project?
- Mechanic’s lien
- ad valorem
- utility lien
- Special Assessment
A
Special Assesment
4
Q
Which of these is classified as a general lien?
- Mechanic’s lien
- Jail bond lien
- Real Estate Taxes
- Judgment
A
Judgment
5
Q
High of these liens would usually be given highest priority in disbursing funds from a foreclosure sale?
- Mortgage dated last year
- Mechanic’s lien for work started before the mortgage was made
- Real estate taxes due
- Judgment rendered yesterday
A
Real estate taxes due
6
Q
A specific parcel of real estate has a market value of $160,000 and is assessed for tax purposes at 75% of market value. The tax rate for the county in which the property is located in 4%. The tax bill will be
- $4,800
- $5,000
- $5,200
- $6,400
A
$4,800
7
Q
Which of these taxes targets homeowners in particular?
- personal property tax
- Sales tax
- Real property tax
- Luxury tax
A
Real Property Tax
8
Q
A homeowners decided to add a family room onto his house. An electrician was hired to wire the room but has not been paid. The electrician has the right to
- record a notice of the mechanic’s lien and file a court suit within the time required by state law
- tear out his work
- Record a notice of the mechanic’s lien
- Have personal property of the owner sold to satisfy the lien
A
record a notice of the mechanic’s lien and file a court suit within the time required by state law
9
Q
What is the annual rel estate tax on a property valued at $135,000 and assessed for tax purposes at $47,250, with an equalization factor 125%, when the tax rate is 2.5%?
- $945
- $1,181
- $1,418
- $1,477
A
*$1,477
10
Q
Which of these is a voluntary, specific lien
- IRS tax lien
- Mechanic’s lien
- Mortgage lien
- Special assessment
A
Mortgage lien
11
Q
In two weeks, a general contractor will file a suit against a homeowner for nonpayment. The contractor just learned that the homeowner has listed the property for sale with a real estate broker. In this situation, which of the following will the contractor’s attorney use to protect the contractor’s interests?
- Lis Pendens
- seller’s lien
- Buyer’s lien
- Assessment
A
Lis Pendens
12
Q
Which of these statements BEST describes special assessment liens
- They are general liens
- They take priority over mechanics liens
- The are paid on a monthly basis
- They cannot be prepaid in full without penalty
A
They take priority of mechanic’s liens
13
Q
Which of these creates a lien on real estate?
- Unpaid mortgage loan
- Easement running with the land
- license
- Encroachment
A
Unpaid mortgage loan
14
Q
A mechanic’s lien would be available to a
- seller’s real estate agent
- Buyer’s real estate agent
- Taxing authority
- contractor
A
Contractor
15
Q
A person owns a primary residence and two apartment buildings. She pays property taxes on two of the three properties. The delinquent taxes will result in a lien on
- All three properties
- All real and personal property that she owns.
- The property on which she has not paid the taxes
- only her primary residence
A
The property on which she has not paid the taxes
16
Q
General real estate taxes levied for the operation of the government are called
- ad valorem taxes
- Assessment taxes
- Special taxes
- Improvement taxes
A
Ad valorem taxes
17
Q
The equalization factor used in Illinois taxation is designed to
- increase the tax revenues of the state
- correct discrepancies between the assessed values of similar parcels of land in various counties
- correct inequities in taxes for senior citizens and disabled persons
- Decrease taxes for the poor and unemployed
A
correct discrepancies between the assessed values of similar parcels of land in various counties
18
Q
A man owns a condominium town house in Cook County and a weekend retreat in Sangamon County, both in illinois. He also owns investment property in Montana. If one of his creditors sues him in a Cook County court and a judgment is issued against him and is recorded in both Cook and Sangamon counties, which of these is TRUE?
- the judgment becomes a lien on the weekend retreat, the man’s speedboat, and all other items of real and personal property in Sangamon county
- The judgement becomes a lien on the property located in both Cook and Sangamon counties.
- The judgment becomes a lien on all of the man’s real and personal property, wherever located.
- The judgment becomes a lien on the Cook County town house only.
A
The judgement becomes a lien on the property located in both Cook and Sangamon counties.
19
Q
Which of these statements is TRUE of the successful bidder on property offered at an annual tax sale?
- She may obtain a tax deed if the property is not redeemed within the redemption period
- She owns the property after paying the oustanding taxes
- She bids the highest percentage of interest she will accept f the property is redeemed
- She received a tax deed at the time of the sale
A
She may obtain a tax deed if the property is not redeemed within the redemption period
20
Q
The first installment of the tax bill for all counties except Cook is due on
- September 1
- June 1
- The first business day in March
- The day after the actual amount of the current year’s tax is determined
A
June 1
21
Q
A charge of three discount points on a $120,000 loan equals
- $450
- $4,500
- $3,600
- $116,400
A
$3,600 (Page 285)
22
Q
A prospective buyer needs to borrow money to buy a house. The buyer applies for an obtains a real estate loan from a mortgage company. The buyer then signs a note and a mortgage. In this example, the mortgage company is the
- mortgagor
- beneficiary
- vendor
- Mortgagee
A
mortgagor
23
Q
The borrower under a deed of trust is called the
- trustee
- trustor
- beneficiary
- vendee
A
trustor
24
Q
In a land contract, the vendee
- Is not responsible for the real estate taxes on the propriety
- does not pay interest and principal
- obtains legal title at closing
- Has possession during the term of the contract
A
Has possession during the term of the contract
25
A borrower has defaulted on a loan. Which of these BEST describes the rights of the lender in this situation?
* The acceleration clause in the note gives the lender the right to have all future installments due and payable immediately on default.
* The escalation clause in the note allows the lender to collect all future interest due on the load should a buyer default
* The defeasance clause in the note stipulates that the lender may begin foreclosure procedures to collect the remaining mortgage balance
* the alienation clause in the note allows the lender to convey the morgage to a buyer at the foreclosure sale
The escalation clause in the note allows the lender to collect all future interest due on the load should a buyer default
26
After a mortgagor makes final payment to the mortgagee, the mortgagee would give the mortgagor a
* release deed
* deed of trust
* satisfaction of mortgage
* mortgage estoppel
satisfaction of mortgage
27
under a typical land contract, when does the vendor give teh deed to the vendee?
* at the closing
* When the contract is fulfilled and all payments have been made
* Whrn the contract for deed is approved by the parties
* After the first year's real estate taxes are paid
When the contract is fulfilled and all payments have been made
28
If a borrower must pay $2,700 for points on a $90,000 loan, how many points is the lender charging for this loan?
* 3
* 2
* 5
* 6
3
29
Pledging property for a loan without giving up possession of the property itself is called
* Defeasance
* alienation
* novation
* hypothecation
Hypothecation
30
Although the homeowners have located a buyer for their home, the buyer's offer is less than what the homeowners owe. In this situation, if the lender agrees to accept an amount less than owed, the lender has greed to a
* short sale
* friendly foreclosure
* Deed in lieu of foreclosure
* Waiver of redemption
Short sale
31
Discount points on a mortgage are computed as a percentage of the
* selling price
* Closing costs
* Down payment
* Loan amount
Loan amount
32
In illinois, mortgage foreclosures may be obtained only through a court proceeding. This means illinois is characterized as a
* Judicial foreclosure state
* Strict forefloxure state
* Foreclosure-by-lawsuit state
* intermediate mortgage theory state
judicial foreclosure state
33
In illinois, when may a mortgagor in default exercise the right of reinstatement?
* At any time before the foreclosure sale
* Up to six months after the foreclosure sale
* up to 90 days after service of summons
* up to 90 days after the payments become delinquent but before summons
up to 90 days after service of summons
34
In illinois, when must a release be delivered to a mortgagor or trustor once the mortgage or deed of trust has been fully satisfied?
* Within 48 hours of full payment and satisfaction
* within one month after full payment and satisfaction
* Within five business days after full payment and satisfaction
* within 90 days after full payment and satisfaction
within one month after full payment and satisfaction
35
The successful bidder at a foreclosure sale in Illinois immediately received a
* Sheriff's deed
* Certificate of sale
* Deed of foreclosure
* certificate of foreclosure
Certificate of sale
36
According to the mortgage escrow account act, an individual who has owned his home for 12 years and reduced his mortgage balance to 65% of its original amount may
* Receive a 50% rebate from the lender on his escrow account
* earn the statutory interest rate on his escrow account deposit
* terminate his escrow account
* obtain a second loan with only a token down payment
terminate his escrow account
37
What is the illinois usury ceiling for loans secured by real property?
* 8%
* none of these
* 9.5%
* A fluctuating rate based on the quarterly federal reserve rate
none of these (page 284)
38
Which of these is included in the definition of mortgage contained in the Illinois Mortgage Foreclosure Law?
* Installment contracts payable over at least five years, with a 20% down payment
* installment contracts payable over a maximum of five years
* Assignments of beneficial interest in living trusts
* Deeds in trust
Installment contracts payable over at least five years, with a 20% down payment
39
Which of these describes the theory of the mortgagor/mortgagee relationship in illinois
* Title theory
* Lien theory
* conventional theory
* Intermediate mortgage theory
Intermediate mortgage theory
40
A buyer purchased a residence for $195,000. She made a down payment of $25,000 and agreed to assume the seller's existing mortgage, which had a current balance of $123,000. The buyer financed the remaining $47,000 of the purchase price by executing a mortgage and note to the seller. This type of loan by which the seller becomes the mortgagee is called a
* Purchase money mortgage
* wraparound mortgage
* Package mortgage
* balloon note
Purchase money mortgage
41
A buyer purchased a new residence for $175,000. he made a down payment of $15,000 and obtained a $160,000 mortgage loan. the builder of the house paid the lender 3% of the loan balance for the first year and 2% for the second year. This represented a total savings for the buyer of $8,000. What type of mortgage arrangement is this?
* wraparound
* buydown
* package
* blanket
Buydown
42
Which of these is NOT a participant in the secondary market?
* Fannie Mae
* Ginnie Mae
* Freddie Mac
* credit unit
Credit unions
43
A buyer purchased a home for cash 30 years ago. Today, the buyer receives monthly checks from a mortgage lender that supplement her income. The buyer MOST likely has obtained
* A shared appreciation mortgage
* an adjustable rate mortgage
* A reverse mortgage
* an overriding deed of trust
A reverse mortgage
44
Which characteristsic of a fixed rate home loan that is amortized according to the original payment schedule is TRUE?
* The loan cannot be sold in the secondary market
* The monthly payment amount will fluctuate each month
* The interest rate change may be based on an index
* The amount of interest to be paid is predetermined
The interest rate change may be based on an index
45
When teh Fed raises it's discount rate, which is likely to happen?
* The buyer's points will decrease
* mortgage money will become plentiful
* interest rates will rise
* The percentage of ARMs will decreas
interest rates will rise
46
In a loan that requires periodic payments that do not fully amortize the loan balance by the final payment, which term BEST describes the final payment
* Adjustment
* Acceleration
* Variable
* Balloon
Balloon
47
A developer received a loan that covers five parcels of real estate and provides for the release of the mortgage lien on each parcel when certain payments are made on the loan. This type of loan arrangement is called a
* purchase money loan
* Package loan
* blanket loan
* wraparound laon
Package loan
48
Funds for FHA loans are usually provided by
* The federal housing administration
* The federal reserve system
* The seller
* qualified lenders
Qualified lenders
49
a home is purchased using a fixed-rate, fully amortized mortgage loan. Which statement regarding this mortgage is TRUE?
* each mortgage payment amount is the same
* A balloon payment will be made at the end of the laon
* Each mortgage payment reduces the principal by the same amount
* The principal amount in each payment is greater than the interest amount
*each mortgage payment amount is the same
50
Which of these BEST defines the secondary market?
* Lenders who deal exclusively in second mortgages
* where loans are bought and sold after they have been originated
* The major lender of residential mortgages and deeds of trust
* The major lender of FHA and VA loans
where loans are bought and sold after they have been originated
51
The primary activity of Freddie Mac is to
* Guarantee mortgages with the full faith and credit of the federal government
* act in tandem with Ginnie Mae to provide special assistance in times of tight money.
* buy and pool blocks of conventional mortgages
* buy and sell VA and FHA morgages
buy and pool blocks of conventional mortgages
52
A borrower obtains a $100,000 mortgage loan for 30 years at 7.5% interest. If the monthly payments of $902.77 are credited first to interest and then to principal, what will be the balance of the principal after the borrower makes the first payment
* $99,097.32
* $99,772.00
* $100,000.00
* $99,722.23
$99,722.23
53
A buyer borrowed $85,000 to be repaid in monthly installments of $823.76 at 11.5% annual interest. How much of the buyer's first month payment was applied to reducing the principal amount of the loan
* $8.15
* $91.80
* $9.18
* $814.58
$9.18
54
If a lender agrees to make a loan based on an 80% LTV ratio, what is the amount of the loan if the property appraises for $114,500 and the sales price is $116,900?
* $91,600
* $83,200
* $91,300
* $92,900
$91,600
55
A borrower wants to negotiate a $113,000 loan. Which of these loan terms would he need to accept to pay the least amount of interest over the life of the loan?
* 7% amortized over 30 years
* 8% amortized over 20 years
* 10% amortized over 25 years
* 9% amortized over 15 years
9% amortized over 15 years
56
Which of these is the difference between the market value and any mortgages the borrower has on the property?
* Equitable interest
* equitable title
* Equity
* Equitable lien
Equity
57
Which law requires that all advertising that references mortgage financing terms contain certain disclosures?
* Equal Credit Opportunity Act
* Truth in Lending Act
* Community Reinvestment Act
* Fair Housing Act
Truth in Lending Act
58
Which statement is TRUE regarding the Truth in Lending act (TILA)?
* If a borrower is refinancing, TILA states that the borrower has five days to rescind the transaction by merely notifying the lender
* Finance charges that must be disclosed include loan fees, service charges, and discount points
* If an advertisement discloses the interest rate, then it has met truth in lending requirements
* for the purpose of TILA, a creditor is a person who extends consumer credit more than five times each year
Finance charges that must be disclosed include loan fees, service charges, and discount points
59
In order to assist prospective buyers who lacked a down payment on their property, a married couple agreed to "take back paper" at the closing for a part of the purchase price. The document MOST likely used would be a
* Reverse annuity mortgage
* Package mortgage
* Shared appreciation mortgage
* Purchase money mortgage
Purchase money mortgage
Real Estate
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