P3-107 quiz

1. Question

Which federal agency is responsible for implementing and administering government housing and urban development programs, including FHA mortgage credit?

A) The Department of Housing and Urban Development (HUD)
B) The Federal Deposit Insurance Corporation (FDIC)
C) The Federal Reserve Board (FRB)
D) The Farm Service Agency (FSA)

2. Question

What is the primary purpose of inclusionary zoning?

A) To prohibit multifamily housing in certain areas
B) To limit all development to luxury housing
C) To require some new development be set aside for low and moderate income housing
D) To remove all zoning restrictions from new development

3. Question

What does an income and expense statement show?

A) Only the gross rental income for a property
B) The schedule of income and expenses showing net gain or loss over a specific period
C) Only the unpaid loan balance on a property
D) The appraised value compared to the listing price

4. Question

The income approach to value is based primarily on which factor?

A) The original construction cost of the property
B) Recent listing prices of nearby homes
C) The owner’s equity position
D) The market rent or income the property can be expected to earn

5. Question

Which of the following is the best description of income property?

A) Property that produces income directly, such as commercial property used in one’s trade or business
B) Owner-occupied residential property only
C) Vacant land held solely for speculative appreciation
D) Any property with a mortgage on it

6. Question

What do indemnification contracts in insurance typically cover?

A) Only speculative risks involving potential gains
B) Gambling losses on investment properties
C) Pure risks where there is a possibility of loss but no expectation of gain
D) Administrative penalties imposed by regulators

7. Question

An indemnity agreement primarily does which of the following?

A) Transfers title from one party to another
B) Provides that one party will secure another against loss or damage from a specified event
C) Guarantees a fixed rate of return on an investment
D) Sets the listing price for a property

8. Question

In real estate, what is an indenture?

A) A unilateral deed executed only by the grantor
B) A temporary lease agreement for less than one year
C) A simple promissory note
D) A sealed agreement or deed executed by two or more parties

9. Question

Which statement best describes an independent contractor?

A) A person in business for themselves who contracts to do a complete job and is responsible only for the finished product
B) An employee who is paid hourly and directed in day-to-day tasks
C) A salaried manager who supervises company staff
D) A temporary worker hired through an employment agency

10. Question

In the context of ARMs/GPARMs, what is an index?

A) The borrower’s gross monthly income
B) A number derived from a formula that serves as an indicator for determining interest rate changes
C) The lender’s internal operating margin
D) The original appraisal value of the property

11. Question

What does the term “index disclosed to the mortgagor” refer to in an ARM/GPARM?

A) The highest possible index value allowed during the loan term
B) The average of all index values over the past year
C) The value of the selected index that is given to the mortgagor at closing
D) The index value on the first adjustment date only

12. Question

What is an in-file credit report?

A) A handwritten summary of the borrower’s debts prepared by the loan officer
B) A full investigative report prepared after a site visit
C) A list of payments made on the current mortgage only
D) An objective, usually computer-generated, report of credit and legal information from a credit repository

13. Question

In real estate terms, what does ingress refer to?

A) The right or act of going in or entering a property
B) The right to exit a property only
C) The process of recording a deed
D) The calculation of loan-to-value ratio

14. Question

What is the initial interest rate on a mortgage?

A) The rate after the first adjustment on an ARM
B) The original interest rate of the mortgage at closing
C) The rate charged only during the last year of the loan
D) The rate used solely to calculate late fees

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