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Real Estate Licensing Virginia-Real-Estate-Salesperson Exam
Virginia Real Estate Salesperson (Page 8 )

Updated On: 7-Feb-2026
Page 5 of 25
PDF with 120 Questions

Harry, an agent, transfers some money from an escrow account into his personal savings accounts.
What is he doing and is it legal or illegal?

  1. This is commingling, and it is legal.
  2. This is conversion, and it is illegal.
  3. This is commingling, and it is illegal.
  4. This is conversion, and it is legal.

Answer(s): B

Explanation:

Commingling occurs when a licensee mixes clients' escrow funds with their own funds in the same account. This is prohibited but usually involves "mixing," not directly taking the money.

Conversion occurs when a licensee uses or transfers client funds for personal use, such as Harry moving money from an escrow account to his personal account.

Conversion is considered a serious violation of Virginia license law and is illegal.


Reference:

Virginia Code §54.1-2108.1 (Maintenance and management of escrow accounts)



A partially amortizing loan will include:

  1. a balloon payment
  2. non-refinancing clauses
  3. multiple lenders
  4. equal monthly payments that contribute to both principal and interest until the entire loan is paid

Answer(s): A

Explanation:

A partially amortizing loan requires regular monthly payments covering interest and some principal, but the loan is not fully paid off at the end of the term.

At maturity, a balloon payment (lump sum of the remaining balance) is due.

Other options:

(B) Non-refinancing clause ­ not a defining feature.

(C) Multiple lenders ­ irrelevant.

(D) Equal monthly payments until fully paid ­ that describes a fully amortizing loan, not partial.


Reference:

Virginia Real Estate Finance Principles ­ Loan types

National exam content outline (Amortization & balloon loans)



A form of insurance that protects the policyholder by covering any losses they might incur as a result of theft or fraud by specified individuals is:

  1. a risk management bond
  2. a liability bond
  3. a security bond
  4. a fidelity bond

Answer(s): D

Explanation:

A fidelity bond is a type of insurance that protects employers or organizations against losses caused by theft, fraud, or dishonesty of employees or other specified individuals.

Other options are distractors:

(A) Risk management bond ­ not a recognized insurance product.

(B) Liability bond ­ would cover liability for damages, not theft/fraud.

(C) Security bond ­ general term, but not the correct insurance product here.


Reference:

Virginia Real Estate Practice Text ­ Risk management and insurance section

Real Estate Board CE Curriculum ­ Brokerage risk & trust account protections



In Virginia, how many years do records need to be kept for?

  1. three years
  2. five years
  3. two years
  4. one year

Answer(s): A

Explanation:

Virginia requires brokers and firms to retain all financial, transactional, and escrow records for three years.

This includes contracts, disclosures, closing statements, and escrow records.

The three-year period usually begins from the date of closing or termination of the transaction.


Reference:

Virginia Code §54.1-2108 (Broker records retention requirements)



Why do lenders need liquidity?

  1. so loans can be packaged together to create MBSs
  2. so they have the funds to originate more loans
  3. so they can put their money in long-term assets
  4. to qualify for FHA insurance

Answer(s): B

Explanation:

Liquidity is a lender's ability to quickly convert assets into cash.

When lenders sell loans on the secondary mortgage market or securitize them into mortgage-backed securities (MBSs), they regain capital.

This liquidity allows lenders to issue more loans to new borrowers.

Other options:

(A) MBSs are a method to create liquidity, not the purpose.

(C) Investing in long-term assets would reduce liquidity.

(D) FHA insurance does not require liquidity.


Reference:

Fannie Mae & Freddie Mac guidelines

Virginia Real Estate Finance Principles ­ Secondary Mortgage Market section



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