national interactive study group
TRANSCRIPT
UNIT 8:
BOBRA TAHAN
HOWARD HARRIS
NATIONAL INTERACTIVE STUDY GROUP
1
Study Group Information
Please refer to your dashboard for the following:
Link to calendar of discussion topics
Links to discussion questions
Use this button on the Learning Management System tab to access your dashboard:
2
Contact Information
Bobra Tahan and Howard Harris both have access to this account:
Please include the STATE where you will be taking your exam anytime you reach out to us so we can
find the best resources for you.
3
Setting up the room4
Setting up the room5
Unit 8:
TOPICS TO BE DISCUSSED:
Your questions
Mortgage and deed of trust terms
FHA and VA mortgages
Fair Housing
Capital gains
6
MORTGAGE
A mortgage is a two-party instrument
Borrower = mortgagor
Lender = mortgagee
7
MORTGAGE6
TRUST DEED/DEED OF TRUST
Three-party instrument
Borrower = trustor
Lender = beneficiary
Third party = trustee
Property is conveyed by borrower to a third party (trustee) as security for loan
9
DEED OF TRUST/TRUST DEED
Conveys “Bare Legal Title”(Trustor)receives the money
Holds Beneficial Interest(Beneficiary)lends the money
Trustee holds Bare Legal Title, with Power of Sale for the Benefit of the lender
8
QUESTION
FHA loans are assumable but VA loans are not:
True
False
11
KEY POINTS-FHA/VA LOANS
FHA and VA loans are always assumable (no due-on-sale clause). The conditions depend on the date of loan origination.
The lender’s approval is required for assumption of FHA loans originated since 1989.
The lender’s approval is required for assumption of VA loans originated since 1988.
An assumption will not need an appraisal.
12
QUESTION
If the market value of the property is higher then the debt this best defines:
A. Market price
B. Equity
C. Assessed value
D. Market value
13
QUESTION
A fee that increases the yield a lender will receive on a loan is:
A. Loan origination fee
B. Discount point
C. Prorated rents
D. Closing costs
14
QUESTION
Two borrowers purchased a property for $90,000 with 10% down. They decided to buy the interest rate down by paying two points at closing. If the down payment and points are the only closing costs, how much will the buyers bring to closing?
A. $10,620
B. $10,800
C. $11,000
D. $ 9,000
15
QUESTION
In what mortgage would the mortgagee make payments to the mortgagor?
A. Interest only
B. Partially amortized
C. Reverse
D. FHA
16
QUESTION
The buyer was unable to qualify for a new loan on a house they had made an offer on. The seller agreed to carry the buyers loan for fifteen years using a contract for deed. In this form of owner carry:
A. The buyer will not receive possession until the final payment is made.
B. At closing both title and possession will pass to the buyer.
C. During the loan period the seller will retain equitable title of the property.
D. The seller holds the deed, the buyer has possession and will receive title upon final payment on the loan.
17
QUESTION
An umbrella term for unfair and illegal lending practices is:
A. Subprime loan
B. Predatory lending
C. Unsecured lending
D. Overseer lending
18
FEDERAL FAIR HOUSING
A federal law enacted in 1968 and subsequently amended, Title VIII of the Civil Rights Act is called the federal Fair Housing Act, which declared a national policy of providing fair housing throughout the U.S.
Discrimination is illegal when based on race, color, sex, familial status, handicap, religion or national origin in connection with the sale or rental of most dwellings and any vacant land offered for residential construction or use. (Does not cover commercial or industrial properties.)
19
QUESTION
What was the acronym for the federal fair housing protected classes?
A . Garden fresh
B. Freshman
C. Corn bread
D. Fresh Corn
20
QUESTION
A broker owns a four unit apartment and lives in one unit. She does not rent to families with children. This is allowed under fair housing exemptions:
True
False
21
QUESTION
Which if any law protects against discrimination against an individual only because of their race?
A. Federal Fair Housing Act of 1968
B. Post-Civil War 1866 antidiscrimination law
C. Federal Fair Housing Act as amended in 1972
D. None of the above
22
QUESTION
Under the Older Persons Act of 1995, housing for older persons is exempt from the familial status if the building is occupied solely by those 62 years of age or older or at least 80% of the dwellings are occupied by at least one person 55 years or age or older.
True
False
23
QUESTION
George Smith is considered “handicapped” and protected under the 1988 amendment to the Federal Fair Housing Act if he is an active illegal drug user.
True
False
24
QUESTION
A married couple has sold their primary home and made a profit of $700,000. They lived there 2 out of the last 5 years. How much profit is subject to capital gains tax?
A. $700,000
B. $500,000
C. None since is the primary residence
D. $200,000
25
QUESTION
A tax advantage an investor may use to diminish the impact of federal income taxes is;
A. A 1031 exchange
B. No capital gain on sales below $500,000
C. Reinvestment within 120 days with 0 taxes
D. A 1040 deferral
26
1031 EXCHANGES
It is rare to find two properties of equal value and equity; therefore, to balance the equities, one party usually also pays some money or assumes a larger amount of underlaying debt. If anything of value is received in an exchange it is called BOOT and you will be taxed up to that amount and the balance will be deferred. The person paying the BOOT will add that amount to their book value or (adjusted basis for IRS tax purposes.
27
BOOT
Property 1. $200,000 Value
160,000 Debt
Property 2. $200,000 Value
140,000 Debt
Property 1 in the exchange receives $20,000 in debt
relief which would be considered BOOT and taxable.
28
CONTACT INFORMATION
Any questions I missed or that you still have?
Remember if you think of something after class you can reach both Bobra Tahan and Howard Harris at:
29