P3-101 quiz

1. Question

What does the effective age of a property represent in appraisal?

A) The number of years since the property was first listed for sale.
B) The legal date when title to the property was first recorded.
C) The age of the property based on its physical condition, which may differ from its chronological age.
D) The average remaining economic life of all properties in the neighborhood.

2. Question

What does effective gross income (personal) generally include?

A) Normal annual income including overtime that is regular or guaranteed, which may come from more than one stable source.
B) Only base salary from a single employer, excluding all other income sources.
C) Irregular income such as occasional gifts or lottery winnings.
D) Projected future bonuses that are not yet guaranteed.

3. Question

In real estate, what does the term egress refer to?

A) The right to install utilities across adjoining land.
B) The right to occupy a dwelling unit for a specified term.
C) The right of a lender to foreclose on a property after default.
D) The right to go out from or exit a property, usually paired with ingress as access rights.

4. Question

What is electronic imaging in the context of mortgage documentation?

A) A method of electronically signing loan documents.
B) A method of reproducing a facsimile of a document or photograph with a computer or other electronic device.
C) A process for encrypting borrower data for security purposes.
D) A digital platform for submitting online loan applications.

5. Question

What is eminent domain?

A) The right of a lender to seize property after a borrower defaults.
B) The authority of a homeowners association to enforce deed restrictions.
C) A private company’s power to condemn property for commercial use.
D) The power of government to appropriate private property for public use or for the public welfare.

6. Question

Which situation best illustrates an encroachment?

A) A recorded easement allowing a neighbor to cross the property.
B) A mortgage lien recorded against the property.
C) An improvement that intrudes illegally onto another person’s property.
D) A restriction in a deed limiting how the property may be used.

7. Question

What is an encumbrance on real property?

A) Anything that affects or limits the fee simple title, such as mortgages, leases, easements, or restrictions.
B) Any document that conveys full fee simple title.
C) Only unpaid real estate taxes on the property.
D) A temporary lease of personal property attached to the land.

8. Question

In mortgage financing, what is an end loan?

A) A short-term loan used only during construction.
B) A bridge loan used to purchase a new home before selling the current one.
C) A loan that automatically converts to a construction loan at closing.
D) The final or permanent mortgage loan made to a borrower, as distinguished from construction or development loans.

9. Question

What is an endorsement in the context of negotiable instruments or insurance?

A) A verbal agreement to modify the terms of a note.
B) A writing on or notation added to an instrument that assigns, transfers, or changes its terms, or modifies insurance coverage.
C) A government guarantee of repayment on a private loan.
D) A court order requiring repayment of a defaulted loan.

10. Question

What is the purpose of an environmental impact report?

A) To establish zoning classifications for undeveloped land.
B) To determine the maximum mortgage amount for a proposed project.
C) To certify that a property is free of all environmental hazards.
D) To report the probable effect of a development on the surrounding area, prepared to governmental guidelines.

11. Question

In real estate, what does a homeowner’s equity represent?

A) The total amount of principal and interest paid over the life of the loan.
B) The total of all closing costs paid at settlement.
C) The difference between the property’s fair market value and the current indebtedness against it.
D) The original loan amount when the mortgage was first made.

12. Question

What is equity of redemption in the foreclosure context?

A) The lender’s right to redeem the property after foreclosure.
B) The mortgagor’s common law right to redeem property during foreclosure and, in some states, a statutory right after foreclosure.
C) The right of junior lienholders to increase their lien amounts before foreclosure.
D) The right of tenants to remain in the property after foreclosure.

13. Question

What does errors and omissions coverage typically insure against?

A) Losses that occur because of an error or neglect by an employee who was assigned a specific responsibility.
B) Physical damage to the property caused by natural disasters.
C) Losses caused by intentional fraud on the part of the borrower.
D) Any loss resulting from fluctuations in market interest rates.

14. Question

When does property typically escheat to the state?

A) When the owner sells the property without recording the deed.
B) When the owner fails to pay property taxes for one year.
C) When the property is condemned for public use.
D) When the owner dies intestate and without heirs, causing the property to revert to the state.

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