Chapter 13, Consuming Activity

1.  A mortgage whose periodic payments are only sufficient to cover the interest due. The loan is paid
    off at maturity with a single payment called a balloon payment.
     A. Interest only Mortgage              B. Partially amortizing mortgage
     C. Graduated payment mortgage   D. Adjustable rate mortgage

2.  A mortgage payment scheme with periodic payments structured to include interest plus some
     principal reduction that is insufficient to fully amortize the loan when due. The balance remaining
     at maturity is paid off with a balloon payment.
      A. Interest only Mortgage              B. Partially amortizing mortgage
      C. Graduated payment mortgage   D. Adjustable rate mortgage
3.  A variable rate or payment mortgage that periodically adjusts to a specified index.
      A. Interest only Mortgage              B. Partially amortizing mortgage
      C. Graduated payment mortgage   D. Adjustable rate mortgage
4.  Origination Fee is that loan charges designed to cover the lender's costs of processing the
     application and loan.
      A. T
      B. F
5.  Points is that loan charges designed to boost the lender's effective rate of return. Also known as
     discount points.
      A. T
      B. F
6.  Annual percentage rate is that the lender's true yield once points and other fees are considered. It is
     the lenders IRR assuming the borrower holds 
       A. T
       B. F
7.  Commensurability is that when making a choice between options, if for any given option, a
     weakness in some characteristics can be compensated for by strengths in other characteristics, the
     characteristics are said to exhibit commensurability
      A. T
      B. F
8.  Reverse annuity mortgage is a mortgage product designed to meet the needs of elderly
     homeowners by providing an annuity or line of credit secured by a mortgage to be paid off when
     the house is sold or refinanced or the estate probated.
       A. T
       B. F

Answer A. B. D. A. A. A. A. A.
     

Diane Ray - Chapter 13 M/C and T/F

Chapter 13 MC/TF

1.         A mortgage product designed to meet the needs of the elderly with an annuity or line of credit is called what? 

            a.         Federal Housing Administration (FHA) 

            b.         Adjustable rate mortgage (ARM)

            c.         Reverse annuity mortgage (RAM)

            d.         None of the above    

 2.         Once points and fees are calculated, the Annual Percentage Rate (APR) is what the lender       measures as their bottom line return.

            a.         True

            b.         False

3.         An advantage of discount points for the lender is to increase their effective rate of return.

a. True
b. False

4.         A Reverse annuity mortgage product is overseen by the Federal Housing Administration

            a.         True

            b.         False

5.         What is the expression used for a mortgage type where the monthly payments pays only        the interest on the loan.

            a.         “Annuity Due Payment”

            b.         “Graduated Payment”

            c.         “Interest Only Payment”

            d.         “Balloon Payment”

 Answers:         1) c  , 2) a  , 3) a  , 4) a , 5) c

Diane Ray - Chapter 11 M/C and T/F

Chapter 11 MC/TF Questions

 1.         What type of use is considered a legal exception to the current zoning law?

            a.         Legal non-conforming

            b.         Special use permit

            c.         Conditional use permit

            d.         Both A and C

2.         What legislative body is primarily responsible for the long term general plan of a cohesive          and equitable living space for all citizens within a community?

            a.         County Board of Supervisors

            b.         Planning Commission

            c.         Planning and Development Services

            d.         Parks and Recreation Department

 
3.         What public organization receives their principal source of revenue from property taxes?

            a.         Federal government

            b.         Local governments and school districts

            c.         State government

            d.         All of the above

4.         Which type of local government zoning control permits limitations on property rights?

            a.         Building codes

            b.         Taxation

            c.         Police Powers

            d.         None of the above

5.         Property taxes are the primary source of revenue for local governments and school districts

            a.         True

            b.         False

6.         The Building Code is the public construction standard used to protect the health, safety and       welfare of its citizens.

            a.         True

            b.         False

7.         Ad valorem value is considered the assessor’s estimate of a property’s market value for          taxation purposes.

            a.         True

            b.         False

       Answers:         1)  d,  2) b, 3) b, 4) c, 5) a, 6) a, 7)  a

Chapter 13 Consuming Activity

1. (ARM) stands for Adjustable rate mortgage

A. True
B. False

2.  Points; is a loan charge designed to boost the lender’s effective rate of return. Also know as discount points.

A. True
B. False

3. (RAM) is a loan charge designed to cover the lender’s costs of processing the application and loan.

A. True
B. False

4. (APR) stand for Adjustable percentage rate.

A. True
B. False

5. One of critical concerns people have when selecting a home is school district

A. True

B. False

6.                   A mortgage product designed to meet the needs of elderly homeowners by providing an annuity or line of credit secured by a mortgage to be paid off when the house is sold or refinanced or the estate probated.

A. Points
B. Adjustable rate mortgage
C. Reverse annuity mortgage
D. None of the above

7.                   A mortgage whose periodic payments are only sufficient to cover the interest due. There is no periodic amortization. The loan is paid off at maturity with a single payment called a balloon payment.
A. ARM
B. APR
C. RAM
D. None of the above

8. _____ The increase in the outstanding mortgage balance that arises in some ARM and GPM when periodic payments are less than the interest due for the period and the shortfall is added to principal balance.

A.  Commensurability

B. Negative amortization
C. A&B
D. None of the above

Answers: 1) A, 2) A, 3) B, 4) B, 5) A, 6) C, 7) D, 8) A

Chapter 13: Consuming Activity

Chapter 13: Consuming Activity

1)      A mortgage whose periodic payments are only sufficient to cover the interest due is know as a interest-only mortgage.

a.       True

b.      False

2)      Graduated payment mortgage is a residential mortgage structure whose payments begin above the fixed rate.

a.       True

b.      False

3)      Adjustable rate mortgage is a variable rate or payment mortgage that periodically adjusts to a specified index.

a.       True

b.      False       

4)      Points are loan charges designed to boost the lender’s effective rate of return.

a.       True

b.      False

5)      An origination fee is the loan charges that are designed to cover the lender’s costs of processing the application and loan.

a.       True

b.      False

6)      The best mortgage type for a retired homeowner looking for income is known as a _________.

a. Adjustable rate mortgage      

b. Partially amortizing mortgage   

c. Reverse annuity mortgage     

d. None of the above

7)      The increase in the outstanding mortgage balance that arises in some ARMs and GPMs when periodic payments are less than the interest due for the period and the shortfall is added to the principal balance is know as _________.

a.       Negative amortization

b.      Partially amortizing mortgage   

c.       RAM

d.      APR

8)      The _______ is the lender’s true yield once points and others fees are considered.

a. Commensurability

b. APR

c. Point balance

d. None of the above    

Answers:   1)T   2)F   3)T    4)T     5)T     6)C     7)A      8)B

Chapter 13 Extra Credit

1)      Home ownership not only satisfies the need for space, but also provides economic and psychological benefits.

a.       True

b.      False

2)      Individual borrowers can optimize their interest rate-discount rate selection if they know the lender’s payoff assumption and are able to accurately anticipate their own payoff.

a.       True

b.      False

3)      All businesses need the same amount of real estate in order to be successful.

a.       True

b.      False

4)      Real estate can contribute to a corporation in three ways: as a trading base, as a cost of operation or a factor of production, and adds to the overall value of the corporation.

a.       True

b.      False

5)      A corporation should own all of its real estate to profit from the operational and strategic support of the space.

a.       True

b.      False

6)      ________ is a residential mortgage structure whose payments begins below the fixed-rate, fully amortized mortgage payment but are systematically increased on a predetermined basis until in later years they exceed the fully amortized payment.

a.       Interest-only mortgage

b.      Partially amortizing mortgage

c.       Graduated payment mortgage

d.      Reverse annuity mortgage

7)      A loan charge designed to cover the lender’s costs of processing the application and loan is called a _____.

a.       Points

b.      Origination fee

c.       APR

d.      Negative amortization

8)      For a given site, a weak score in one characteristic can be compensated for by a strong score in another characteristic. This is called ________.

a.       Location decision

b.      Corporate strategy

c.       Tenure decision

d.      Commensurability

Answers: 1)A   2)A   3)B   4)B   5)B   6)C   7)B   8)D

Chapter 11. Government Activity

1.  Who is a local government employee in a tax assessment office responsible for calculating and   
      maintaining and the tax digest?
   
     A. Tax assessment office  B. Tax assessor  C. Assessor's parcel number  D. Tax collector

2.  What is a use that was established before and does not meet current zoning requirements but is  
     legally allowed to continue?
     A. Grandfathered use  B. Legal nonconforming use  C. Special use permit  D. Zoning variance

3.  What is a required land donation to the municipality from the developer of land to be used for
     public services?
     A. Impact fee  B. Dedication  C. Subdivision regulation  D. mandatory dedication

4.  Tax Rate = (budget amount for fiscal year - anticipated fee collection ) / (Tax digest - total
     exemptions)
      A. T
      B. F
5.  Ad valorem value is the assessor's estimate of a property's market value for taxation purposes.
     A. T
     B. F
6.  Ad Valorem Value x Assessment Ratio = Assessed Value
     A. T
     B. F
7.  Conformity is a valuation principle that recognizes that property values are sustained or enhanced
     when a property conforms to its surroundings.
     A. T
     B. F
8.  Homestead exemption is a common assessed value deduction to permanent residents who use their
     property as their primary residence or homestead.
     A. T
     B. F

Answer ; 1, B. 2, A. 3, D. 4. A. 5, A. 6, A. 7, A. 8, A.

Chapter 11: Government Activity

Chapter 11: Government Activity

1)      Tax digest is the total amount of taxable property value of all taxable real estate within the country.

a.       True

b.      False

2)      A tax assessor is a non-governmental employee responsible for calculating and maintaining  the tax digest.

a.       True

b.      False

3)      An ad valorem value is the assessor’s estimate of a property’s market value for taxation purposes.

a.       True

b.      False       

4)      Taxable value is the assessed value after some applicable exemptions.

a.       True

b.      False

5)      The homestead exemption is a common assessed value deduction to permanent residents who use their property as their primary property residence or homestead.

a.       True

b.      False

6)      The ratio of the property tax to a property’s ______ or the market value.

a. Assessed value      

b. Ad valorem     

c. Assessment ratio      

d. None of the above

7)      The creation of geographic areas, or zones of similar land uses and density of land use is called ______.

a.       Geographical uses

b.      Best land use

c.       Zoning

d.      Effective land uses

8)      A valuation principle that recolonizes that property values are sustained or enhanced when a property conforms to its surrounds is called_______.

a. Building envelope

b. Best value of land use      

c. Best land use     

d. Conformity      

Answers:   1)T   2)F   3)T    4)F  5)T    6)B    7)C    8)D