UNIT 8: BOBRA TAHAN HOWARD HARRIS

Transcription

1 NATIONAL INTERACTIVE STUDY GROUP 1 UNIT 8: BOBRA TAHAN HOWARD HARRIS

2 Study Group Information 2 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:

3 Contact Information 3 Bobra Tahan and Howard Harris both have access to this account: nationalleadinstructor@kaplan.com 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.

4 Setting up the room 4

5 Setting up the room 5

6 Unit 8: TOPICS TO BE DISCUSSED: Your questions Mortgage and deed of trust terms FHA and VA mortgages Fair Housing Capital gains 6

7 MORTGAGE A mortgage is a two-party instrument 7 Borrower = mortgagor Lender = mortgagee

8 MORTGAGE 6

9 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

10 DEED OF TRUST/TRUST DEED Conveys Bare Legal Title (Trustor) receives the money 8 Trustee holds Bare Legal Title, with Power of Sale for the Benefit of the lender Holds Beneficial Interest (Beneficiary) lends the money

11 QUESTION FHA loans are assumable but VA loans are not: 11 True False

12 KEY POINTS-FHA/VA LOANS FHA and VA loans are always assumable (no due-onsale clause). The conditions depend on the date of loan origination. 12 The lender s approval is required for assumption of FHA loans originated since The lender s approval is required for assumption of VA loans originated since An assumption will not need an appraisal.

13 QUESTION 13 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

14 QUESTION 14 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

15 QUESTION 15 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

16 QUESTION In what mortgage would the mortgagee make payments to the mortgagor? 16 A. Interest only B. Partially amortized C. Reverse D. FHA

17 QUESTION 17 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.

18 QUESTION An umbrella term for unfair and illegal lending practices is: 18 A. Subprime loan B. Predatory lending C. Unsecured lending D. Overseer lending

19 FEDERAL FAIR HOUSING 19 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.)

20 QUESTION 20 What was the acronym for the federal fair housing protected classes? A. Garden fresh B. Freshman C. Corn bread D. Fresh Corn

21 QUESTION 21 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

22 QUESTION Which if any law protects against discrimination against an individual only because of their race? 22 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

23 QUESTION 23 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

24 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. 24 True False

25 QUESTION 25 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

26 QUESTION A tax advantage an investor may use to diminish the impact of federal income taxes is; 26 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

27 1031 EXCHANGES 27 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.

28 BOOT 28 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.

29 CONTACT INFORMATION 29 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: nationalleadinstructor@kaplan.com