P3-104 quiz

1. Question

What does a fidelity bond protect an employer against?

A) Economic loss caused by dishonest acts of its employees
B) Losses from market interest rate changes
C) Property damage caused by natural disasters
D) Borrower default on mortgage loans

2. Question

Who is considered a fiduciary in a real estate or financial transaction?

A) Any third-party vendor hired by the lender
B) Someone in a position of trust or confidence with respect to another person
C) Any party who signs the sales contract
D) A government regulator overseeing the transaction

3. Question

What does Fannie Mae’s final project acceptance indicate for a condo, PUD, or co-op project?

A) That construction has been completed on time
B) That the project meets all local zoning requirements
C) That only FHA loans may be made in the project
D) That the project’s physical characteristics and marketability are acceptable and loans on units may be delivered to Fannie Mae

4. Question

Under the Uniform Commercial Code, what is the purpose of a financing statement?

A) To transfer title to real property from seller to buyer
B) To record a mortgage on a one-to-four family residence
C) To give public notice of a lender’s security interest in personal property collateral
D) To set the maximum interest rate allowed on a loan

5. Question

What is a firm commitment in mortgage lending?

A) A lender’s agreement to make a loan to a specific borrower on a specified property
B) A preliminary rate quote that is not binding
C) An appraisal report used to value the collateral
D) A borrower’s promise to accept any loan terms offered

6. Question

What did FIRREA (Financial Institutions Reform, Recovery, and Enforcement Act of 1989) accomplish in part?

A) Eliminated all federal thrift regulations
B) Created FHA mortgage insurance programs
C) Established federal flood insurance requirements
D) Modified federal thrift and bank regulation laws and included real estate appraisal reform

7. Question

Which lien generally has first priority against a property?

A) A mechanic’s lien recorded after construction
B) A first lien, such as a tax lien that takes priority over all other liens
C) A junior lien recorded before the first mortgage
D) A leasehold interest held by a tenant

8. Question

What is a first mortgage?

A) Any mortgage on commercial property
B) A home equity line of credit
C) A real estate loan that creates a primary lien against real property
D) A second lien used for down payment assistance

9. Question

What is a fiscal year for a business or institution?

A) The calendar year from January 1 to December 31 only
B) Any six-month reporting period for taxes
C) The period between federal elections
D) Any 12‑month period used for financial reporting and statements

10. Question

Which statement best describes a fixed rate mortgage?

A) A mortgage that provides for only one interest rate for the entire term of the loan
B) A mortgage whose rate changes every year with the market
C) A mortgage that starts fixed and always converts to an ARM
D) A mortgage whose rate is renegotiated monthly

11. Question

When is flood insurance typically required by lenders?

A) For all loans regardless of location
B) In areas designated as potential flood areas by federal authorities
C) Only when the borrower requests it
D) Only for properties located in coastal states

12. Question

What is a flood plain?

A) Any land located above sea level
B) A man‑made drainage system for storm water
C) A federally owned buffer zone along rivers
D) Land adjoining a river that would flood if the river overflowed its banks

13. Question

What is foreclosure in the context of mortgage lending?

A) The voluntary payoff of a loan before maturity
B) The borrower’s right to redeem property after sale
C) A procedure by which the lender applies the property to payment of a defaulted debt under the mortgage or deed of trust
D) A reduction in the mortgage interest rate

14. Question

Which situation best illustrates fraud in a contract?

A) A borrower misunderstanding a disclosed term
B) A lender charging a higher interest rate than a competitor
C) An appraiser giving an opinion of value that later proves inaccurate
D) A willful misrepresentation of a material fact that induces someone to enter a contract to their detriment

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