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P4-44 Quiz

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Question 1 of 9

1. Question

How should government bonds be valued when used as a source of funds to close?

A. At their current market value only
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B. At their redemption value only
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C. At their purchase price unless the redemption value can be determined and verified, with receipt of funds verified
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D. At the lowest value between purchase price and market value
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Question 2 of 9

2. Question

What documentation is required to verify the value of stocks used as funds to close?

A. A verbal confirmation from the borrower
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B. A prior year tax return showing stock ownership
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C. A current statement from the stockbroker or a stock certificate with a dated newspaper stock list, and verification of receipt of funds
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D. Only a screenshot of the borrower’s online trading account
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Question 3 of 9

3. Question

When may funds from a trust account be used to satisfy cash-to-close requirements?

A. When the borrower is listed as a beneficiary
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B. When the borrower has access to the funds and that access can be verified
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C. Only when the trust is revocable
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D. Only after funds are distributed
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Question 4 of 9

4. Question

How is cash-on-hand treated as a source of funds for down payment or closing costs?

A. Acceptable with a written explanation
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B. Acceptable if deposited prior to closing
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C. Acceptable for closing costs only
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D. Not an acceptable source of funds
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Question 5 of 9

5. Question

Under what condition may a property seller accept a borrower’s existing property as trade equity for a down payment?

A. When the borrower provides no cash down payment
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B. When the borrower provides a 5% cash down payment and the equity contribution reflects true value
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C. When the trade value exceeds the appraised value
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D. When the lender waives appraisal requirements
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Correct

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Question 6 of 9

6. Question

What additional documentation is required when trade equity is used toward a down payment?

A. A verbal confirmation from the seller
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B. A broker price opinion only
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C. A separate written appraisal and a land records search to verify ownership and liens
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D. Only a settlement statement
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Correct

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Question 7 of 9

7. Question

When may excess rent payments be applied toward a borrower’s down payment?

A. When the lease term is at least six months
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B. When the rental payment exceeds market rent and there is a valid rental/purchase agreement with a minimum 12-month lease and documented payments
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C. When the borrower provides canceled checks for three months
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D. When the seller agrees verbally
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Question 8 of 9

8. Question

How is sweat equity treated by Fannie Mae and Freddie Mac?

A. Accepted by both agencies without restriction
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B. Not accepted by either agency
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C. Accepted by Fannie Mae but not Freddie Mac
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D. Not accepted by Fannie Mae, but permitted by Freddie Mac with a 5% cash investment
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Question 9 of 9

9. Question

When may borrowed funds be used as funds to close?

A. Only when unsecured
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B. Only when repayment is included in qualifying ratios
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C. When the funds are secured by an asset and represent a return of equity
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D. Only when borrowed from a family member
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