In which of the following scenarios would it be appropriate to conduct an appraisal using a cost approach?

In which of the following scenarios would it be appropriate to conduct an appraisal using a cost approach? The answer is an appraisal is done on a new home being built for a first-time homebuyer. The cost approach is generally used on new home construction (among other reasons).

Under which of the following situations would an appraiser use the income approach to appraise a property?

Under which of the following situations would an appraiser use the income approach to appraise a property? The answer is the new buyer is going to use the property as a rental property.

Which of the following real estate appraisal approaches considers the value of the property and any improvements made?

The cost approach can be used to appraise all types of improved property. It is the most reliable approach for valuing unique properties. The cost approach provides a value indication that is the sum of the estimated land value, plus the depreciated cost of the building and other improvements.

When would it be ethical for a mortgage broker to offer a loan with a rate higher than the best rate available to the borrower?

546,300-510,400 = 35,900. It is ethical for a mortgage broker to offer a loan at a rate higher than the best rate available to the borrower: The answer is if the borrower chooses the rate in order to secure a borrower credit for closing costs.

Which of the following is not permitted for a Hoepa loan?

Which of the following is not permitted for a HOEPA loan? The answer is making a loan solely based on the collateral value of the property. Under HOEPA, you may not make a loan solely based on the value of the borrower's collateral without considering his/her ability to repay the loan.

Cost Approach Real Estate | Real Estate Exam Prep Videos

What is allowed under HOEPA?

Under the 2013 HOEPA rule, most types of mortgage loans secured by a consumer's principal dwelling1, including purchase money mortgages, refinances, closed-end home-equity loans, and open-end credit plans (i.e., home equity lines of credit (HELOCs), are potentially subject to HOEPA coverage.

Which of the following is permitted when servicing or originating a HOEPA loan?

Which of the following is permitted when servicing or originating a HOEPA loan? Answer: c) HOEPA loans may include pre-payment penalties as long as the pre-payment penalty occurs within the first five years (other conditions also apply). Increasing the rate after default is never permitted.

Which of the following is true regarding a lender's ability to collect an appraisal fee?

Which of the following is true regarding a lender's ability to collect an appraisal fee? This is allowed as long as the borrower has received the Loan Estimate and expressed an intent to proceed.

Which of the following is not true about the financial responsibility of a mortgage loan originator?

Answer and Explanation: The incorrect option is D. A mortgage loan originator must always have his or her surety bond in an amount that reflects the dollar value of loans... See full answer below.

Which of the following best describes the importance of ethics in the mortgage industry?

Which of the following best describes the importance of Ethics in the mortgage industry? (A) If a mortgage agent or company behaves unethically, it is not only the reputation of that agent or company that is harmed, but also the reputation of the mortgage industry as a whole.

Which of the following real estate appraisal approaches considers the value of the property?

The sales comparison approach is the most commonly used approach in real estate appraisal practice for determining the value. In this approach to value, the property which is being appraised is compared to recently sold properties which are of similar types.

What are appraisals used for?

Key Takeaways

An appraisal is an unbiased professional opinion of a home's value and is used whenever a mortgage is involved in buying, refinancing, or selling that property.

Which of the following is an approach used by appraisers to determine the value of a property?

The most frequently-used and accepted approach to determining value in real estate appraisal practice is the sales comparison approach. This approach to value bases its opinion of value on what similar properties (otherwise known as “comparables”, or “comps”) in the vicinity have sold for recently.

Under what circumstances would an appraiser consider the cost approach to be the best valuation method?

When to Use the Cost Approach. The ideal stage to utilize the cost approach is when constructing or proposing a new property. Given that construction expenses associated with erecting a new building should be readily available to the appraiser, these costs are often the best indicator to determine a property's value.

What are the 3 appraisal approaches?

What are the three types of appraisals?

There are three primary types of real estate appraisals that may be used, including the "cost approach," the "sales comparison approach," and the "income capitalization approach."

Which of the following would not be required if a mortgage company wishes to utilize electronic signatures on required disclosures?

Which of the following would NOT be required if a mortgage company wishes to utilize electronic signatures on required disclosures? The answer is the company must record the IP address from which the documents were accessed.

Which of the following is a lender unable to consider during the qualification process?

Which of the following is a lender unable to consider during the qualification process? According to ECOA, a lender may not consider a borrower's age for the purposes of credit qualification.

Which of the following best describes the fiduciary duty that a loan originator owes to a consumer?

Which of the following best describes the fiduciary duty that a loan originator owes to a consumer? The answer is it is imposed by state law and means that the agent (the loan originator) must act in the best interests of the principal (the borrower).

Under which of the following circumstances would the lender on a conventional loan be required to drop the mortgage insurance?

Under which of the following circumstances would the lender on a conventional loan be required to drop the mortgage insurance? The answer is the loan reaches 78% LTV based on the original purchase price. Generally, a conventional loan of up to 80% of the property's value will be made without private mortgage insurance.

What must be done for a fee to be considered acceptable under RESPA?

According to RESPA Section 8(c), acceptable payments and arrangements include attorney fees for services that were actually performed, fees paid by a title company covering services that were actually performed and fees paid by a mortgage lender covering services that were actually performed.

Which of the following loans would be subject to the Truth in Lending Act?

Which of the following loans would be subject to the Truth in Lending Act? The Truth in Lending Act applies to consumer loans. It doesn't cover loans for business, commercial, or agricultural purposes, or loans to corporations or other organizations.

Which of the following statements describes a lending practice that is prohibited by HOEPA and its implementing regulations?

Which of the following statements describes a lending practice that is prohibited by HOEPA and its implementing regulations? making a lending decision based solely on the amount of equity in a loan applicant's home.

Which of the following rules outlines the regulations for HOEPA?

The Home Ownership and Equity Protection Act (HOEPA), as implemented by Federal Reserve Regulation Z, Section 32, imposes additional disclosure requirements on these types of loans and prohibits certain acts and practices in connection with mortgage lending.

Which of the following is not a threshold that the Home Ownership Equity Protection Act HOEPA has established to identify loans as high cost mortgages?

Which of the following is not a threshold that the Home Ownership Equity Protection Act (HOEPA) has established to identify loans as high-cost mortgages? The answer is subprime interest rate threshold. HOEPA uses APR, points and fees, and prepayment penalty thresholds to identify high-cost mortgages.