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10 Cards in this Set
- Front
- Back
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Although the terms are often used interchangeably, the technical difference between an escrow agent and a closing agent is that: |
The two terms are often used interchangeably, but technically the term "escrow agent" refers to a licensed escrow company. "Closing agent" refers to anyone providing escrow services ---a lawyer, an escrow company, a broker, a lender, etc. |
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Which of the following is not one of the steps in the inspection process? |
During the closing process, the initial inspection needs to be ordered, and then the inspection report must be approved or rejected by the buyer and/or the lender. If the seller makes repairs, a re-inspection will be necessary. (The appraisal is a separate matter, not part of the inspection process.) |
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When choosing a home inspector, a buyer should look for a firm that: |
Membership in the American Society of Home Inspectors requires actual experience, passing a written examination, inspection reviews, and continuing education |
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An HO-3 hazard insurance policy would cover damages resulting from: |
Floods and earthquakes are not covered by a typical hazard insurance policy, although supplemental coverage may be available. (Protection against encroachments would be provided by extended coverage title insurance, not by hazard insurance.) |
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If a home buyer is concerned about title problems that do not show up in the public record, he should: |
A homeowner's coverage title insurance policy will protect the buyer against problems that do not appear in the public record, such as an encroachment or adverse possession |
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On a settlement statement, the debits represent: |
Debits are cost that a party must pay at closing, either to the other party or to a third party. The buyer's debits increase the amount of money the buyer will need to pay at closing. The seller's debits decrease the seller's not proceeds |
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The good faith deposit is: |
The good faith deposit is applied toward the purchase price at closing; it's part of the buyer's downpayment. Because the buyer has already paid the good faith deposit, it is treated as a credit for the buyer on his settlement statement |
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Prepaid interest refers to: |
The buyer's first payment on a new loan is not due the first day of the month immediately after closing, but the first day of the month after that. To cover the interest that accrues during the reminder of the month in which closing occurs, the buyer must pay prepaid or interim interest at closing. |
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The seller customarily pays the fee for recording the: |
The seller would pay the fee for recording a deed of re-conveyance to release the property from the lien of a deed of trust. The recording fee for a document is generally paid by the party who benefits most from having that document recorded |
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A loan secured by a deed of trust on the home the buyer is purchasing will be considered a "federally related" loan if the: |
For RESPA, a loan is federally related if the lender is federally regulated, has federally insured accounts, is assisted by the federal government, makes loans in connection with a feral program, sells loans to Fannie Mae, Ginnie Mae, or Freddie Mac, or makes real estate loans that total more than $1,000,000 per year |
