HUD Housing Counselor Module 4.1 & 4.2 (GRADED A) Questions and Answer Elaborations

.pdf
HUD Housing Counselor Module 4.1 & 4.2 (GRADED A) Questions and Answer Elaborations A potential homebuyer with a minimal savings for a down payment and a low credit score is most likely to qualify for which mortgage? - United States Department of Agriculture (USDA) - Federal Housing Administration (FHA) - Fannie Mae - Freddie Mac Federal Housing Administration (FHA) Which is the most significant benefit of using a real estate agent? - Marketing the home online - Obtaining a home inspection - Paying the sales commission - Negotiating the sale Negotiating the sale Which statement most accurately describes a member of the home buying team? - A real estate agent or broker is typically an attorney or works for an escrow company. S/he oversees the final transaction in property purchase, at which time the title is transferred from the seller to the buyer - The lender requires an assessment of the home by a
home inspector before loan approval - An insurance agent is also known as a settlement agent - A home inspector is generally paid by the buyer A home inspector is generally paid by the buyer Which piece of advice would you give to clients as they begin the process of obtaining financing? - Never speak with lenders before setting on a home - Have all potential lenders pull credit within a 30-day window - Mortgages with adjustable rates are always best - Choose whichever lender is most prompt in returning your phone calls Have all potential lenders pull credit within a 30-day window All of the following is information necessary for your client to gather in preparation for filing out the URLA, except: - Figures related to income from child support - Figures related to student loans - The year the home was built - Referrals of past landlords Referrals of past landlords
All of the following statements describe working with an appraiser during the "obtaining financing" step of purchasing a home, except: - It is improper for an appraiser to consider the racial or religious background of a neighborhood's residents to determine the value of a home - Lenders hire appraisers - Home buyers can cancel the offer contract if the contract includes a contingency clause - Home buyers rarely are allowed to see the appraisal information and for that reason are encouraged to get a home inspection Home buyers rarely are allowed to see the appraisal information and for that reason are encouraged to get a home inspection A client is shopping for a loan and submits a loan application to a lender with an accepted contract at 123 Maple St. The client asks for information about possible settlement costs, but the lenders says that he needs to see the purchase contract in order to move forward with the process. The lender should have provided which item? - Uniform Residential Loan Application (URLA) - Ability to Pay & Qualified Mortgage Rule (ATR/QM) - Loan Estimate - Closing Disclosure Loan Estimate A client spoke with five lenders. Four of the five lenders quoted interest rates between 4.1% and 4.6%. One lender mentioned a 3.1% interest rate if she signed for it within the next 36 hours. She was very interested in this loan, so she asked for more information (conditions and fees). The lender provided
some information about the loan, but nothing included the APR. Which regulation deems this practice unlawful? - Equal Credit Opportunity Act (ECOA) - Real Estate Settlement Procedures Act (RESPA) - Truth in Lending Act (TILA) - Home Ownership and Equity Protection Act (HOEPA) Truth in Lending Act (TILA) A certain mortgage company encourages all its clients to use a specific appraiser. The appraisers give the mortgage company $100 for every one of its clients who comes to them. if the mortgage company does not tell clients about the payment it receives for referrals, this is a breach of which regulation? - Equal Credit Opportunity Act (ECOA) - Real Estate Settlement Procedures Act (RESPA) - Truth in Lending Act (TILA) - Home Ownership and Equity Protection Act (HOEPA) Real Estate Settlement Procedures Act (RESPA) A twenty-eight year old single women was denied a loan. When she asked for the reason, she was told that the lender had given loans to women her age in the past and no longer would. he found that within a few years ,they were not able to make their monthly payments because they had children and stopped working or cut back to part-time work. Which regulation deems this practice unlawful? - Equal Credit Opportunity Act (ECOA) - Real Estate Settlement Procedures Act (RESPA) - Truth in Lending Act (TILA) - Home Ownership and Equity Protection Act (HOEPA) Equal Credit Opportunity Act (ECOA)
Which type of coverage would a consumer file a claim with when...a family must rent an apartment for one month while their home is being repaired after a windstorm - Personal Liability Coverage - Structural Coverage - Medical Payment Coverage - Loss of Use Coverage Loss of Use Coverage Which type of coverage would a consumer file a claim when...A gutter system is destroyed in a hailstorm and must b e repaired. - Personal Liability Coverage - Structural Coverage - Medical Payment Coverage - Loss of Use Coverage Structural Coverage Which type of coverage would a consumer file a claim when...A guest gets carbon monoxide poisoning from a home that has a gas leak an no carbon monoxide detector and sues the homeowner - Personal Liability Coverage - Structural Coverage - Medical Payment Coverage - Loss of Use Coverage Personal Liability Coverage
Which type of coverage would a consumer file a claim when...A guest at a home slips on a wet floor and breaks a bone. S/he does not sue the homeowner - Personal Liability Coverage - Structural Coverage - Medical Payment Coverage - Loss of Use Coverage Medical Payment Coverage During a pre-purchase counseling session, a client mentions that he wants to make an offer on a home situated near a stream that historically floods in heavy rain storms. Which statement would be an appropriate response for a housing counselor to give him? - I recommend that you purchase homeowners' insurance because it will cover damage done to your home if flooded by water from the nearby stream - It is important that you get medical payment coverage if you are going to live near a stream. Children could get injured playing in or near the s stream - I would advise you to purchase earthquake insurance if you decide to close on that house. Earthquakes can often cause massive waves in bodies of water, which could flood nearby homes. With earthquake insurance, any damage done by these types of floods will be covered. - Before you close on the home, it may be wise to
factor in the cost of flood insurance. Since your home will be next to a stream, flood insurance could be critical; however, the added annual expense of flood insurance may make the home an unaffordable option for you. Before you close on the home, it may be wise to factor in the cost of flood insurance. Since your home will be next to a stream, flood insurance could be critical; however, the added annual expense of flood insurance may make the home an unaffordable option for you. Which best describes the home inspection and closing process - Not all closing costs are due at closing - There is no value in having a real estate attorney or housing counselor review the agreement of sale before clogging - Home inspectors estimate the value of a home and make certain it is marketable - Your clients will receive the keys and the title when they give the seller their earnest money Not all closing costs are due at closing Which items is critical to consider when working with a client to prepare a household system maintenance plan? - Finance Rate - Target Replacement Date - Local Tax Codes - Cost of Original Item
Target Replacement Date Which strategy most effectively increases a home's energy efficiency? - Use ground fault indicator outlets - Install an automatic garage door opener - Increase attic insulation - Cover windows with permanent storm shutters Increase attic insulation Which best describes the ENERGY STAR program? - A mandatory program that helps individual save money and protect the climate through superior energy efficiency - A voluntary program that helps individuals save money and protect the climate through superior energy efficiency - A voluntary program that helps businesses and individuals save money and protect the climate through superior energy efficiency - A mandatory program that helps businesses and individuals save money and protect the climate through superior energy efficiency A voluntary program that helps businesses and individuals save money and protect the climate through superior energy efficiency
Which action would most likely increase the energy efficiency of a home? - Keep electrical cords in good condition and positioned appropriately - Repair caulking on windows - Repair cracks in driveways and walkways - Clean chimneys Repair caulking on windows Which should a housing counselor recommend that a client include in a household maintenance plan? - Ratings for energy efficiency resources - Limits of homeowner's insurance coverage - Coverage for home warranty - Strategist for financing a home improvement loan Coverage for home warranty Under which condition would most down payment assistance programs approve a waiver of the home ownership education requirement? - most will not waive the home ownership education requirement - When the home buyer has a verifiable disability or handicap - When the home buyer has successfully passed a home ownership exam
- When the home buyer has completed four years of college most will not waive the home ownership education requirement Delinquency on which type of payment can cause a lien to be placed on a client's property? - Home warranty payments - Homeowners association dues - Mortgage insurance payments - Homeowners insurance payments Homeowners association dues Which is a possible outcome for member residents if a homeowner's association (HOA) imposes a community assessment? - Residents would be provided the HOA's annual report, including an evaluation of the community - Residents would be required to pay a share of expenses related to capital improvements to the common areas - Residents would be requested to complete a community assessment survey about property management performance - Residents would be required to complete a community survey assessing community-wide activities and programs
Residents would be required to pay a share of expenses related to capital improvements to the common areas A new homeowner purchased home four months ago and received a notice that he owes $3,000 in two weeks for special assessment. Client does not have $3,000 to spare. What will happen if client does not pay it? All of the following are accurate except: - Yes, assessments are always difficult to pay because they are always announced just a few weeks before the funds are due - Special assessments are funds collected to pay for large projects such as repairing the roof of a condominium complex - The possible consequence of late payment or non- payment are similar to that of property taxes and HOA fees - The previous homeowner should have disclosed information regarding pending assessments before you purchased the home Yes, assessments are always difficult to pay because they are always announced just a few weeks before the funds are due To complete an effective maintenance plan for a household system, all of the following would be critical for a client to research, except: - Items covered by a home warranty or a product
warranty - Estimated life of home television - Savings for purchasing a refurbished system rather than a new system - Upkeep techniques that may extend the life of a system Estimated life of home television Which items should be included in an emergency preparedness plan? - Purchase a safety deposit box at a bank - Obtain identification bracelets for all family members - Store 30 days worth of food - Identify a meeting location outside the immediate area Identify a meeting location outside the immediate area A client with limited financial resources wants to improve safety in the home to prepare for natural disasters. Which his the best resource for the client to use in researching this topic? - Ready.gov - HUD.gov - Energy.gov - NOAA.gov Ready.gov
Which would be the best location to identify in a household emergency preparedness plan as a safe place to meet in the event of an evacuation? - The nearest police station - The family's home - A local hospital - A motel in a neighboring community A motel in a neighboring community All of the following are critical components of an emergency plan, except: - A home escape route - Meeting location outside the immediate area - Safe room - Identification bracelets for each family member Identification bracelets for each family member Client wants to complete a project over the course of a year. She plans to purchase materials herself and wants to buy them in phases, buying only what she needs for each project phase at the time that it begins. She will be hiring an architect to draw up the project plans. She expects the project will cover over $25,000 and would like a lengthy period of time to pay off the expenses Which financing option would the housing counselor recommend to the client? - Home Equity Loan - Home Equity Line of Credit (HELOC) - Streamlined 203k Loan - Title 1 Loan
Home Equity Line of Credit (HELOC) A client wants to remodel basement over next 12 months. Project should cost under $24,000 and wants to borrow money at a very low interest rate that can be paid off over a longer period of time. Which financing option would work best? - FHA 203K Loan - Home Equity Line of Credit (HELOC) - Home Equity Loan - Energy Efficient Mortgage (EEM) Home Equity Line of Credit (HELOC) Client intends to purchase a home that needs major structural repairs and will make those repairs with funding rolled into a mortgage loan Which financing option would the housing counselor recommend to the client? - FHA 203K Loan - Cash Out Refinance - Home Equity Loan - Streamlined 203k Loan FHA 203K Loan Client is considering refinancing her home. All the following would be beneficial for client, except:
- She will pay a monthly mortgage payment that is $20 less than her initial payment - She will have a fixed-rate loan rather than an adjustable-rate loan that had a low initial rate - She is required to pay for mortgage insurance on her original loan and owes 72% of the home's value - She will have a significantly lower interest rate She will pay a monthly mortgage payment that is $20 less than her initial payment Which of the following is true about the process of selling a home? - The seller should disclose the property's repair history - The seller can always trust real estate agents to protect his/her best interest - The home buyer cannot negotiate to have any repair work completed on the home - The seller must hire a real estate agent or broker to sell the home The seller should disclose the property's repair history
Uploaded by EarlSummer12127 on coursehero.com