Closings

11 July 2024
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The following statements refer to RESPA regulations except which one? Good faith estimate Residential transactions financed by federal related mortgage loans Discrimination of race info booklet regarding closing costs
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Discrimination because of race is not allowed. Discrimination is not a part of RESPA.
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A standard title insurance policy offers protection to
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The Grantee. The correct answer is "Grantee", better know as the "Buyer". The Seller purchases the insurance to protect the beneficiary, the Buyer from lawsuits against the title.
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Which deed usually coveys residential property in Colorado?
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General Warranty Deed
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An out of state investor sells a property in Colorado. The closing entity must withhold up to 2 percent of the
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Selling price as possible income tax liability. The law is that the closing entity must withhold 2% OR the entire net amount whichever is less at closing for possible income tax liability when the person selling has an out of state address.
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On a real estate closing transaction involving an exclusive-right-to-sell listing, the commission would be a debit to the:
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Seller. On a real estate closing the real estate commission is a debit to the seller.
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The individual responsible for the proper closing of the transaction and settlement statement is:
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the individual who has personally established a relationship with the buyer or seller. The individual, who attends the closing, shares the responsibility for accuracy of documents with the individual who establishes a relationship with the client.
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To close in escrow means:
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title, all paperwork, and funds are held in an escrow account until all documents are received by the closing agents and reviewed by the brokers.
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The Real Estate Settlement Procedures Act provides:
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that the mortgagor must be given an estimate of closing costs. RESPA requires the disclosure within three days of loan application, of the good faith estimate of closing costs.
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A real estate broker is legally responsible for:
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preparation of the settlement statements. The Title Company searches the title records and handles the wire transfer; it is the broker who is responsible for the preparation of the legal documents; the Title Company acts only as a scrivener for the broker.
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Based on the contract to buy and sell loan discount points:
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May be paid by either party or a combination of both. Whatever is agreed upon in the contract, determines who will pay for the discount points.
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Escrow's for sales transactions are opened for the protection of the:
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buyer and seller.
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The tax agreement signed by the buyer and the seller at closing stipulates that the:
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buyer and seller are reaching a final settlement at time of closing, and no further adjustments will be made in the future. The tax agreement is a final settlement, no adjustments will be made.
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RESPA applies to the activities of:
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lender's financing the purchase of a borrower's residence.
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General property taxes must be paid-
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Not later than June 15 in arrears.
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The documentary fee appears on a closing statement as a:
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Credit to the broker. The documentary fee is collected from the buyer by the Title Company (broker) and is sent to the county assessor to assist him in determining the true value of the property.
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Lender required addons (called endorsements) to the Title insurance endorsements appear on a closing statement as a:
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Debit to the buyer. Buyers pay for the extended policy (sometimes-called mortgagee policy or title insurance endorsements) naming the lender as beneficiary. On the 6 column worksheet this is shown as Debit Buyer and Credit Broker (so that the closer gets a check written to the title company for providing the insurance.
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In a new loan closing, sometimes a lender may make some of the payouts, such as recording fees, survey and reserve taxes before the closing. When these amounts are taken out of the loan, the remaining balance is the amount sent to the closing table and is called the Net Loan Proceeds. The Net Loan Proceeds are entered on the settlement worksheet:
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As a debit to the broker, single entry- "The lender does not want to send the entire loan amount to the closing and wait for a check back to cover the money they are owed, they instead take their money out of the loan up front and send the remaining balance called Net Loan Proceeds to the closer."
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On a new loan closing, the settlement worksheet entry for a tax reserve indicates that the new lender is-
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Withholding this amount from loan proceeds to start the escrow account for the next tax payment- Lenders have the right to take sums of money from the buyer and place it into a Tax Reserve escrow account to ensure there is enough money availabe to make the next tax payment. Lenders are sensitive to this as unpaid taxes automatically become the most senior obligation should the buyer default on the loan.
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Title insurance endorsements appear on a closing statement as a:
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Credit to the broker.
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RESPA requires the use of:
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A uniform settlement statement.
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Title insurance protects the buyer against:
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All liens of record that are not listed in the schedule of exceptions.
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Earnest money appears on a settlement statement as a:
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Credit to the buyer. Earnest money is applied to the buyer's purchase price. "Short answer for those with A.D.D. - Buyer gets credit for earnest money and broker has to depoist it into the escrow account. Credit Buyer Debit Broker"
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In Colorado "good funds" include a
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A teller's check from a savings and loan.
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The Certificate of Taxes Due is used to calculate:
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the proration of taxes for the final tax agreement.
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When reconciling a 6 column worksheet for a closing - after totaling up the debits and credits, the closing agent needed to add a $30,000 Debit to the Seller Debit column to make it equal to the Seller Credit column. What does this Seller Debit represent?
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A $30,000 check the Seller will receive from this closing.
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Loan discount fees are paid by:
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seller or buyer.
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Recording fees may appear on a closing statement as a: Debit buyer Debit Seller Credit broker all of above
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All of above-
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In the sale of new construction, builders usually use contracts that are:
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prepared by their own attorney.
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The title company may be hired by the listing broker:
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to act as scrivener for the transaction.
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Of the following; who is responsible for for an accurate and complete closing statement?
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real estate broker attending closing.
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What fee will ALWAYS show as a credit on the sellers closing statement?
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Sales Price. CREDIT-SELLER
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For a VA loan - how will the Buyer's Loan Processing Fee be shown on a settlement sheet
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Debit Seller.
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The seller agrees to pay $1500 of the buyer's closing costs, this is shown on the settlement sheet as:
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Debit Seller. Credit Buyer. EZ.
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Interest in arrears is charged to the:
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Seller.
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The payoff of an existing loan appears on a closing statement as a:
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Credit to the Seller.
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A $175 water bill is paid on June 1 for three months, the home is sold and the closing is August 25. How is this shown on the settlement statement?
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13.31 Credit seller. Debit to buyer Seller already paid bill. Buyer owes money to seller for days left. DO THE MATH.
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Title insurance endorsements are provided by the:
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Buyer for protection of the lender. Seller buys title insurance for protection of grantee (buyer). Buyer pays for endorsements for protection of lender.
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The IRS requires which of the following documents to be completed by the seller at the time of closing?
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1099-S "Proceeds from Real Estate Transactions"
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Title insurance endorsements appear on a closing statement as a:
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Debit to the seller.
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What is the debit/credit entry when a buyer assumes a loan from the seller?
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Debit broker, Credit Buyer
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Interest on the loan assumed is shown as:
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Credit to Seller Prior to loan assumed, seller responsible for built up interest.
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Real estate commissions appear on a closing statement as a:
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Debit seller.
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A house is closed on May 15. HOA dues are $108 per month and are due and payable on the first day of each month. The HOA dues will appear on the closing statement as a:
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$59 debit to the seller
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Broker attends client closing. What must he/she do with signed closing documents?
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Deliver immediately to Employing Broker.
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Real estate closing fees customarily appear on a settlement statement as a: Charge that is shared equally by the buyer and seller in the case of a conventional loan. Charge to the seller in the case of a VA loan. Charge that may be shared equally by the buyer and seller in the case of an FHA loan.
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All the above.
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In the sale of new construction, builders usually use contracts that are:
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prepared by their own attorney.
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Broker Bill has several agents in his employ. Agent Smith, an "S-Corporation" himself, has his commission checks written out to his "S-Corporation." Because of this, Broker Bill is:
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managing broker over Agent Smith.
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On a new loan tax reserves appear on a closing statement as a:
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Credit to buyer.
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Closing March 15, next payment due April 1. How many months of escrow can lender take for taxes?
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3.
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Standard title insurance charges appear on a closing statement as a:
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Credit to the broker.
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On a purchase contract, which of the following are considered to be parties to the transaction?
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Buyer, Seller. Listing contract is separate
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The seller agrees to pay $1500 of the buyer's closing costs, this is shown on the settlement sheet as:
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debit to the seller, credit to the buyer.
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If the closing is March 15, and last years taxes of $1127 were not paid; how is this shown on the settlement sheet?
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$1127 debit to the seller, credit to the broker.
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A Flood Certificate is required for the purposes of:
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verifying for the lender that the property does not lay in a flood zone.
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After the Sellers columns on a Settlement sheet have been subtotaled, to balance the two debit and credit columns, a credit to the Seller and a debit to the broker would represent:
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Money owed by the Seller. 6 column worksheet always upside down, Debit seller column means Seller makes money- If credit column is unbalanced, Seller must bring money (debit) to balance.
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After the Sellers columns on a Settlement sheet have been subtotaled, to balance the two debit and credit columns, a credit to the Seller and a debit to the broker would represent:
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The selling price as a possible income tax liability if the seller is from out-of-state.
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An inaccurate county tax certificate failed to indicate the correct taxes due. Additional tax money due would be the responsibility of the:
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County Treasurer.
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According to the Conway-Bogue decision, it is a required practice for Colorado brokers to:
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Use standard and approved forms. Conway-Bogue decision gave real estate agents in Colorado the right to assist buyers and sellers in the legal aspect of real estate.