Glossary - Mortgage Terms - Page 2 Quiz

21 Questions | Total Attempts: 51

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Glossary - Mortgage Terms - Page 2 Quiz

Terms & Definitions from Glossary Terms page 2


Questions and Answers
  • 1. 
    Which choice best defines ESCROW?
    • A. 

      A fee paid to the investor to avoid paying taxes and insurance with the regular monthly mortgage payment.

    • B. 

      Documents or something else of value, often money, held by a neutral third party in order to be used at a later date to fulfill an obligation.

    • C. 

      A separate account paid into by the borrower and held by the lender for payment of taxes, homeowner's insurance and other expenses.

  • 2. 
    Which choice best defines ESCROW WAIVER FEE?
    • A. 

      A fee paid to the investor to avoid paying taxes and insurance with the regular monthly mortgage payment.

    • B. 

      Documents or something else of value, often money, held by a neutral third party in order to be used at a later date to fulfill an obligation.

    • C. 

      A separate account paid into by the borrower and held by the lender for payment of taxes, homeowner's insurance and other expenses.

  • 3. 
    Which choice best defines ESCROW ACCOUNT?
    • A. 

      A fee paid to the investor to avoid paying taxes and insurance with the regular monthly mortgage payment.

    • B. 

      Documents or something else of value, often money, held by a neutral third party in order to be used at a later date to fulfill an obligation.

    • C. 

      A separate account paid into by the borrower and held by the lender for payment of taxes, homeowner's insurance and other expenses.

  • 4. 
    Which choice best defines FACT ACT?
    • A. 

      Enacted in 1996, this act exercises control over the Credit Report Agencies.

    • B. 

      A quasi-governmental agency that buys and sells mortgages that meet their guidelines.

    • C. 

      Enacte4d in 2003, this act requires various amendments and addendums to the Fair Credit Reporting Act and primarily affects the Consumer Reporting Agencies.

  • 5. 
    Which choice best defines FAIR CREDIT REPORTING ACT?
    • A. 

      Enacted in 1996, this act exercises control over the Credit Report Agencies.

    • B. 

      A quasi-governmental agency that buys and sells mortgages that meet their guidelines.

    • C. 

      Enacte4d in 2003, this act requires various amendments and addendums to the Fair Credit Reporting Act and primarily affects the Consumer Reporting Agencies.

  • 6. 
    Which choice best defines FANNIE MAE (The Federal National Mortgage Association)?
    • A. 

      Enacted in 1996, this act exercises control over the Credit Report Agencies.

    • B. 

      A quasi-governmental agency that buys and sells mortgages that meet their guidelines.

    • C. 

      Enacte4d in 2003, this act requires various amendments and addendums to the Fair Credit Reporting Act and primarily affects the Consumer Reporting Agencies.

  • 7. 
    Which choice best defines FEE SIMPLE?
    • A. 

      A form of ownershop where the lessee has rights to hold or use the property for a specific period of time.

    • B. 

      A charge against the property making it security for the payment of the loan.

    • C. 

      Private ownership of real estate in which the owner has the right to control, use, and transfer the property at will.

  • 8. 
    Which choice best defines DISCOUNT POINTS?
    • A. 

      Interest, paid in advanced at closing, to reduce the finance cost over the term of the loan.

    • B. 

      The fee charged by either the lender or third party to cover the cost of preparing the closing documents.

    • C. 

      A fee charged by the escrow agent to hold and disburse funds.

  • 9. 
    Which choice best defines ESCROW FEE?
    • A. 

      Interest, paid in advanced at closing, to reduce the finance cost over the term of the loan.

    • B. 

      The total charges, as defined in regulation Z, imposed by the lender as a condition of the extension of credit, and paid by the borrower.

    • C. 

      A fee charged by the escrow agent to hold and disburse funds.

  • 10. 
    Which choice best defines FINANCE CHARGE?
    • A. 

      Interest, paid in advanced at closing, to reduce the finance cost over the term of the loan.

    • B. 

      The total charges, as defined in regulation Z, imposed by the lender as a condition of the extension of credit, and paid by the borrower.

    • C. 

      A fee charged by the escrow agent to hold and disburse funds.

  • 11. 
    Which choice best defines DOCUMENT PREPARATION?
    • A. 

      Interest, paid in advanced at closing, to reduce the finance cost over the term of the loan.

    • B. 

      The fee charged by either the lender or third party to cover the cost of preparing the closing documents.

    • C. 

      A fee charged by the escrow agent to hold and disburse funds.

  • 12. 
    Which choice best defines CREDIT SCORE?
    • A. 

      A number which indicates statistically how likely a potential borrower is to repay future debts.

    • B. 

      A report, issued by a credit bureau that indicates current outstanding debts and past payment history of a borrower.

    • C. 

      A score given by each of the Consumer Reporting Agencies representing a level of risk of default on a loan.

  • 13. 
    Which choice best defines CREDIT REPORT?
    • A. 

      A number which indicates statistically how likely a potential borrower is to repay future debts.

    • B. 

      A report, issued by a credit bureau that indicates current outstanding debts and past payment history of a borrower.

    • C. 

      A score given by each of the Consumer Reporting Agencies representing a level of risk of default on a loan.

  • 14. 
    Which choice best defines FICO CREDIT SCORE?
    • A. 

      A number which indicates statistically how likely a potential borrower is to repay future debts.

    • B. 

      A report, issued by a credit bureau that indicates current outstanding debts and past payment history of a borrower.

    • C. 

      A score given by each of the Consumer Reporting Agencies representing a level of risk of default on a loan.

  • 15. 
    Which choice best defines FLOOD HAZARD AREA?
    • A. 

      An area in a community that has been determined by the Federal Emergency Management Agency to have a high degree of risk for becoming damaged by flood.

    • B. 

      An insurance policy required by FEMA if the subject property lies within the 100 year flood plain. This policy will cover any damage to the property if flooding were to occur.

    • C. 

      A loan with an interest rate that does not change or adjust during the life of the loan.

  • 16. 
    Which choice best defines FLOOD INSURANCE PREMIUM?
    • A. 

      An area in a community that has been determined by the Federal Emergency Management Agency to have a high degree of risk for becoming damaged by flood.

    • B. 

      An insurance policy required by FEMA if the subject property lies within the 100 year flood plain. This policy will cover any damage to the property if flooding were to occur.

    • C. 

      A loan with an interest rate that does not change or adjust during the life of the loan.

  • 17. 
    Which choice best defines FIXED RATE MORTGAGE?
    • A. 

      An area in a community that has been determined by the Federal Emergency Management Agency to have a high degree of risk for becoming damaged by flood.

    • B. 

      An insurance policy required by FEMA if the subject property lies within the 100 year flood plain. This policy will cover any damage to the property if flooding were to occur.

    • C. 

      A loan with an interest rate that does not change or adjust during the life of the loan.

  • 18. 
    Which choice best defines FEDERAL HOUSING ADMINISTRATION (FHA)?
    • A. 

      A quasi-governmental agency that buys and sells mortgages that meet their guidelines.

    • B. 

      A section of the US Department of Housing that insures loans with the full faith and credit of the US Government.

    • C. 

      A quasi-governmental agency that buys and sells mortgages that meet their guidelines.

  • 19. 
    Which choice best defines FREDDIE MAC (The Federal Home Loan Mortgage Corporation)?
    • A. 

      A quasi-governmental agency that buys and sells mortgages that meet their guidelines.

    • B. 

      A section of the US Department of Housing that insures loans with the full faith and credit of the US Government.

    • C. 

      A quasi-governmental agency that buys and sells mortgages that meet their guidelines.

  • 20. 
    Which choice best defines DESKTOP UNDERWRITER (DU)?
    • A. 

      A complex computer program that uses historical information on millions of loans to determine if the facts presented on the loan application appear to meet the lender's or agency's requirements.

    • B. 

      The automated underwriting system created by Fannie Mae.

    • C. 

      The automated underwriting system created by Freddie Mac.

  • 21. 
    Which choice best defines DEED OF TRUST?
    • A. 

      The borrower promises to pay a specified amount, under specific terms and conditions and is paid in full by a certain date.

    • B. 

      A contract that the owner signs with the lender that pledges the property as security for the loan payment.

    • C. 

      A document which pledges real property to secure a loan.

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