REA 380 Exam 1 Study Guide

REA 380 Exam 1 Study Guide - REA 380 Exam 1 Study Guide 50...

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REA 380 Exam 1 Study Guide – 50 questions Syllabus – 2 questions Housing Market Overview - 4 questions Risky financing; subprime mortgages Reasons for price increases in 2004-2005 o Housing was affordable o Interest rates were low o Stock market was down o International liquidity o Investors drawn to Phoenix o Unconventional financing: o Option ARMs o Alt A (Zero down payment) o “No doc” loans (no documentation) o New mortgage securities – Wall Street Securitization Option ARM mortgages o Adjustable Rate Mortgage o The interest rates change yearly due to the housing market and the payment options Magnitude of the Foreclosure problem o Fannie Mae and Freddie Mac hold or insure $6 trillion in mortgages o Two million ARMs estimated to reset to higher payments in 2008 and 2009 o Possibly 5.5 million loan defaults by the end of 2009; 50% losing their homes Housing and Economic Recovery Act of 2008 o Support Fannie Mae and Freddie Mac
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Unlimited line of credit through 2009 o Raise conforming loan limit to $625,000 o Allow FHA to refinance mortgages o High mortgage debt ratio (31%+) o Must not be behind on payments o 90% of current appraised value o $300 billion; may prevent 400,000 foreclosures o Voluntary on part of lenders o Split appreciation 50% with FHA o $7,500 tax credit for first-time home buyers o Must repay within 15 years o Prohibits sellers from paying buyer’s down payment (October 1) Chapter 2 – 2 questions Rectangular survey Metes and bounds Subdivision plat Chapter 4 – 5 questions Full cash value o The most probable price which property would bring in a competitive and open market under all conditions requisite for a fair sale Limited property value Calculation of individual tax bill Zoning police power, no compensation o As a result of the exercise of police powers (zoning), property owners receive: a) Fair market value compensation b) Just compensation c) Cost adjusted compensation
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d) None of the above Planning related to value General plan, official map o The comprehensive or general plan: a) Does not need to be prepared for municipalities with a pop. Below 5,000 b) Is prepared based on the official map c) Is the justification for assigning individual parcels their zoning classifications d) None of the above Eminent domain, 5 th amendment Kelo vs. New London
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REA 380 Exam 1 Study Guide - REA 380 Exam 1 Study Guide 50...

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