QUESTION: 6

----------------------------------- is a special variation on a second mortgage. In this form, the new lender assumes the original or first mortgage and has the responsibility of collecting all payments and remitting a portion of these payments to the first lender.

Conventional Residential Loan
FHA loan
Wrap-around loan
VA loan

Answer(s): C

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QUESTION: 7

Generally, residential loans are open to prepayment at any time without penalty. To protect against a deficiency, mortgage loans should not exceed the market value of the mortgaged property and in fact are usually made for:

No more than 80 percent of the value
Not less than 80 percent of the value
No more than 90 percent of the value
Not less than 70 percent of the value

Answer(s): A

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QUESTION: 8

Federal Housing Administration:

Agency does not make loans; it only insures them. For this protection, the borrower must pay an annual insurance premium to the FHA of 0.5 percent of the outstanding principal amount of the loan
Agency does not make loans; upon default, the lender has the option either of assigning the mortgage to the FHA and receiving cash and/or securities equal to the loan amount at the date of the default or of foreclosing on the mortgaged property
Establishes standards for property that cannot be insured and maximum terms, interest rates, and amounts for the insured loans
All of these

Answer(s): A,B

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QUESTION: 9

These are the loans in which:
Arrangement is usually called commitment
When the structure is completed and put in service, the loan is paid off from the proceeds of the long term financing, whatever its source Proper controls would require the lender to obtain documentation for the disbursed portion of the construction loan and be assured that the cost of the structure to date is equivalent to the disbursed portion of the construction loan. What are these?

Undeveloped Land Loans
Construction Loans
Development Loans
Residential Loans

Answer(s): D

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QUESTION: 10

______________allow investments to be made, up to a certain percent of invested or total admitted assets, in assets that do not otherwise meet regulatory requirements. If their domiciliary jurisdiction regulations have a this, a life insurer with a business purpose for doing so can make a limited amount of mortgage loans that do not meet regulatory requirements without a reduction in surplus. However, some jurisdictions do exercise some extraterritorial jurisdiction related to it.

Loan application
Basket clause
Underwriting agreement
None of these

Answer(s): D

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Free Financial AFE Exam Questions (page: 3)

QUESTION: 6

QUESTION: 7

QUESTION: 8

QUESTION: 9

QUESTION: 10

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