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PA Fundamentals Test Bank Exam: 30 Hour Exam Questions and Answers, Exams of Management Fundamentals

A comprehensive test bank for a 30-hour pa fundamentals exam. It includes a series of questions and answers covering key concepts in pa fundamentals, such as loan terminology, foreclosure procedures, mortgage and deed of trust structures, and property management. Designed to help students prepare for their pa fundamentals exam by providing them with a comprehensive understanding of the subject matter.

Typology: Exams

2024/2025

Available from 03/09/2025

lenah-smith
lenah-smith 🇺🇸

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30 HOUR PA FUNDAMENTALS TEST BANK EXAM
ACCURATE EXAM QUESTIONS WITH DETAILED
VERIFIED ANSWERS (100% CORRECT
ANSWERS)/ALREADY GRADED A+
What is the loan balance called?
the principal
Charging interest in excess of this rate is called __________ or illegal interest.
usury
What is the total dollar amount of interest and points paid by a borrower at closing.
prepaid interest
What are a one-time fee paid at closing to increase the yield to the investor.
points
Points give the lender more money up-front so he will be encouraged to make a loan at a __________
interest rate.
lower
The lender is able to make lower interest rate loans, but the buyer must come up with the point money
in ___________ at the time of closing.
cash
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Download PA Fundamentals Test Bank Exam: 30 Hour Exam Questions and Answers and more Exams Management Fundamentals in PDF only on Docsity!

30 HOUR PA FUNDAMENTALS TEST BANK EXAM

ACCURATE EXAM QUESTIONS WITH DETAILED

VERIFIED ANSWERS (100% CORRECT

ANSWERS)/ALREADY GRADED A+

What is the loan balance called?

the principal

Charging interest in excess of this rate is called __________ or illegal interest.

usury

What is the total dollar amount of interest and points paid by a borrower at closing.

prepaid interest

What are a one-time fee paid at closing to increase the yield to the investor.

points

Points give the lender more money up-front so he will be encouraged to make a loan at a __________ interest rate.

lower

The lender is able to make lower interest rate loans, but the buyer must come up with the point money in ___________ at the time of closing.

cash

What is the principal of using other people's money to make investments?

leverage

The ratio of loan amount compared to the value of the property is called the __________.

Loan to Value Ratio

The value in a property held by the owner in excess of any liens against it is called __________.

equity

What is the cost per thousand that is required to create the principal and interest payment necessary to pay off the loan?

a factor

The longer the loan, the lower the __________.

interest rate

What is the order of payment in foreclosure? (4 things)

Cost of Sale - advertising, attorney fees, etc.

Special assessment and general taxes are paid after the costs of the sale.

The first mortgage, which is determined by the order of recording.

What is the promise to repay the debt and a negotiable instrument?

a promissory note (pledge)

What is a long-term note that is not secured by a specific property?

a debenture

The buyer of the property retains the right to use the property exclusively while it is subject to a __________ or __________.

Mortgage or Deed of Trust

Both create the collateral for a loan by promising the property in case of default by the borrower.

In a mortgage, the borrower is the __________, and the lender is the __________.

mortgagor

mortgagee

In a Deed of Trust, the trustor is the __________. The beneficiary is the __________. And the trustee is __________.

borrower

lender

anyone designated by the lender

Under a Deed of Trust, who holds the promise to repay (Promissory Note) from the borrower?

the beneficiary (lender)

Who holds the security (Deed of Trust) for the debt.

the trustee

Duties of the borrower in a mortgage or deed of trust: (4 things)

Payment of the debt in accordance with the terms of the note.

Payment of all real estate taxes on the property given as security.

Maintenance of adequate insurance and the property in good repair at all times.

Obtain lender authorization prior to making any major alterations to the property.

What clause applies to If a borrower defaults on the loan, the lender can call the entire balance due and payable immediately.

Acceleration Clause

Allows the interest rate to adjust over the life of the loan.

Escalation Clause

When does a "Budget Mortgage or Deed of Trust" occurs?

as a result of a lender requiring tax or insurance escrows

A monthly loan payment consists of what 4 things?

Principal

Interest

Taxes

Insurance

If recorded, where must a mortgage or deed of trust be recorded?

in the city, county or municipality where the property is located

What are second mortgages or deeds of trust called?

junior mortgages

The priority of junior liens is determined by what?

the date and time of recording

In an installment land contract, what type of title did the seller retain?

legal

Under an FHA graduated payment mortgage, which of the following fluctuates over the term of the loan?

monthly payments

Usury most nearly means __________.

illegal interest

An impound or reserve account most benefits whom?

the lender

A buyer assumes the mortgage. How is the owner relieved of the liability?

novation

The maximum permissible "loan to value ratios" are based on what?

sale price or appraised value, whichever is lower

A rescission clause in a contract provides a purchaser with rescission rights for how many days.

3 days

A mortgage company makes a number of loans to be assembled into one package and sold to permanent investors. This process is an example of interim financing to the mortgage company and is called what?

warehousing

Commercial real estate can be further subcategorized into what? (3 things)

office buildings

retail space

hotels/motels.

When the uses for one property are combined, it is referred to as a __________ development.

mixed-use

What are 4 important reasons why a business would choose to lease space rather than purchase the building?

more cost-effective than owning

owning reduces flexibility

maintenance/leasing activities distracting

business downsize requires selling/leasing

A particular building's potential for generating income depends on what two factors?

ability to attract tenants

expenses involved with operation

What is the term used for the net income produced by a specific property after all expenses have been deducted from the gross receipts?

Net operating income (NOI)

Net operating income is affected by what 3 things?

market rent

vacancies

both fixed and variable operating expenses.

Older office buildings that become obsolete frequently become available for __________ or ___________ use.

warehouse or light industrial

What type of lease is most often used in industrial complexes?

Net leases

What is a nonresidential property investment advantage?

There is little risk of any kind of rent control.

What can be defined as the administration of rental or other property by a person or a team of people who are acting for the owner?

Property management

Condominium and cooperative

The property manager's first responsibility is to realize the __________ on the property that is consistent with the owner's instructions.

maximum profit

A property manager should establish what three types of budgets for each rental project?

Operating

Capital reserve

Stabilized

A critical task for a property manager is the supervision of the property's maintenance. There are basically three types of maintenance:

Preventive maintenance

Corrective maintenance

Construction

The property manager must set up and maintain proper records, making regular reports, called __________ reports, to the owner that are easily understandable and that cover all operations.

property management

A property manager should provide the owner with: (2 things)

Monthly and annual account statements

Delinquent account reports

Which budget forecasts income and expenses that can be projected over a short period of time, usually five years?

a stabilized budget

The Institute for Real Estate Management (IREM) was created as a subsidiary group of __________.

National Association of REALTORS®

Managing brokers have a responsibility to comply with __________ laws.

fair housing

When did Fair Housing law first begin and what did it accomplish?

with the Civil Rights Act of 1866 which prohibited discrimination in housing based on race

The list of protected classes of the Federal Fair Housing Act are: (7 things)

Race

Religion

Color

National origin

Sex

Handicap

Familial status

What practice helps move low-income persons into previously-owned higher income owner properties?

Filtering Down

What is the deadline within which HUD must complete a discrimination investigation once a complaint is received?

100 days

Once the purchase offer has been accepted, the __________ process begins in which the buyers secure their financing, get whatever inspections they want and get a preliminary title report, and the sellers pay off any liens against the property, make or arrange for repairs and execute the deed.

closing

A seller is required to deliver a __________ at closing.

marketable title

Once the lender has qualified the property that will be used as collateral for the loan the lender is preparing to issue to the borrower, the loan officer will request and review a __________ on that property.

title search

Title insurance guarantees the __________ and __________ of the title search. Generally, the insurance policy that the title company issues will protect the policyholder against losses that arise from any number of "hidden" defects.

validity and accuracy

Who should have title insurance?

both the buyer and the lender

Insurance for the buyer ensures a clear title and protects his or her investment. Insurance for the lender protects the lender's interest in the property.

A(n) __________ title insurance policy may be issued to a lender only, a buyer only or jointly to lender and buyer.

standard

A(n) __________ coverage policy insures against many of the items excluded in the standard policy.

extended

Lenders require their mortgagee policies to be extended coverage policies.

__________ is defined as the process in which a disinterested third party holds all money and documents relating to a transaction until all of the terms and conditions of the escrow instructions have been satisfied.

escrow

Who oversees the preparation and recording of all the legal documents, prorates the settlement costs, prepares the settlement statements and does various other tasks?

a closing agent

Involving first or second mortgages

Financed by a federally-related loan

RESPA specifically prohibits any payment or receiving of fees or kickbacks when a service __________.

has not been rendered

RESPA requires lenders to use the __________ form to detail the costs that the buyer and seller will pay at closing.

Closing Disclosure

The settlement statement has a list of the __________ for both the buyer and the seller.

debits and credits

A debit is money that the buyer or seller __________ at closing.

needs to pay

A credit is money that the buyer or seller ____________ at closing, either because it was already paid, it's being reimbursed, or there is a promise to pay.

receives

Some expenses paid at closing must be __________ or divided proportionately between the buyer and the seller.

prorated

Any item that is prorated is shown on the settlement statement as a debit to one party and a credit to the other party for __________.

the same amount

After all the closing documents have been signed, the settlement agent arranges for the recording of the grant deed and security instrument. The title to the property has transferred when the __________.

deed is delivered and accepted by the buyer.

Escrow funds also go by the names:

impound or reserve funds

What is the real estate transfer tax based on?

sale price of the property

In what section of the Closing Disclosure would you find the names and addresses for both the borrowers and sellers and the lender's name?

Transaction Information

What is it called when a mortgage loan amount becoming larger than the original loan amount, resulting in a decrease of the equity the borrower has in the property?

Negative Amortization

Who is responsible for ordering the preliminary title report?