[Compliance with Laws and Regulations Fair Housing]A local bank refuses to make residential loans in a particular section of town because of the ethnic background of its residents. This is a discriminatory practice called:
Answer(s): C
Redlining refers to the illegal practice by lenders of denying loans or altering loan terms based on the racial or ethnic composition of a neighborhood. This violates federal fair housing laws and is discriminatory in nature. Blockbusting involves inducing sellers to sell by suggesting that a minority group is moving in; steering involves directing buyers to or from neighborhoods based on race; boycotting is an antitrust violation. Therefore, C is the correct answer.
[Broker's Authority and Duties Material Facts Disclosure] After taking a listing on a property, a broker learns of major highway changes in the are
North Carolina brokers are obligated to disclose all material facts to all parties in a transaction, regardless of representation. Planned infrastructure changes such as highway expansions may affect property value or desirability and are therefore material facts. The duty to disclose is not conditional on the buyer's inquiry or seller's permission. So the correct answer is C.
[Broker's Authority and Duties Record Retention Requirements] A North Carolina broker must maintain copies of all transaction files for at least _____ after the conclusion of a transaction?
According to the North Carolina Real Estate Commission, brokers must retain records related to a real estate transaction for a minimum of three years from the date of closing or termination of the transaction. These records include contracts, agency agreements, disclosures, and correspondence.Therefore, C is the correct answer.
[Offers and Negotiations Appraisal Adjustments]A comparable property sold for $300,000. It has a finished basement, while the subject property does not. The finished basement contributes $10,000 to value. What is the adjusted value of the comparable property?
Answer(s): A
In appraisal practice, when adjusting a comparable property to reflect differences from the subject property, the adjustment is always made to the comparable. Since the comparable has a finished basement worth $10,000 and the subject does not, we subtract $10,000 from the comparable's sale price to estimate what it would have sold for if it were more like the subject.$300,000 - $10,000 = $290,000.Therefore, the correct answer is A.
[Compliance with Laws and Regulations Mortgage Markets] Which of the following entities would participate in the primary market for mortgage lending?
The primary mortgage market is where loans are originated. Lenders such as commercial banks, credit unions, mortgage bankers, and savings institutions interact directly with borrowers. The Federal Home Loan Mortgage Corporation (Freddie Mac) and Federal National Mortgage Association (Fannie Mae) operate in the secondary market, purchasing existing loans. The Federal Housing Administration (FHA) insures loans but does not lend directly. Therefore, the correct answer is A.
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