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MI Michigan Real Estate Test

Instructions:

Answer 50 questions in 15 minutes.
If you are not ready to take this test, you can study here.
Match each statement with the correct term.
Don't refresh. All questions and answers are randomly picked and ordered every time you load a test.

This is a study tool. The 3 wrong answers for each question are randomly chosen from answers to other questions. So, you might find at times the answers obvious, but you will see it re-enforces your understanding as you take the test each time.

1. Vackage mortgage
Second mortgage
A registered trademark of the National Associaton of REALTORS*; its use is limited to members only.
One in which personal property as well as real property s pledged to secure payment of the note.
A federal prohibition on discrimination in the sle - rental - or financing of housing on the basis of race - color - religion - sex - or national origin

2. Stipulation
The violations and fines or penalties - which the department and the licensee have agreed upon.
The transfer of mortgage obligations to purchaser of the mortgaged property.
A financial charge imposed on a borrower for paying a mortgage prior to expiration of the full mortgage term.
Purchaser

3. Pur autre vie
A law in effect in all states requiring certain contracts to be in writing to be valid.
No two parcels of land are identical
A life estate based on the life of another
One in which the interest rate changes according to changes in a predetermined index.

4. Balloon payment
Coalition of private - nonprofit fair housing groups that has joined with federal and state government fair housing enforcement agencies to substantially improve fair housing enforcement activities.
One in which the scheduled payment will not fully amortize the loan over the morgage term; therefore - to fully satisfy the debt - it requires a final payment called a balloon payment - larger than the uniform payments.
Anything of value - as recognized by law - offered as an inducement to contract.
A leasehold estate that automatically renews itself for consecutive periods until terminated by notice by either party; also called estate from period to period or periodic tenancy

5. Budget mortgage
A history of title and the current status of a title based on a atitle examination
The lender requires one-twelfth of the estimated cost of the annual property taxes and hazards insurance on the mortgaged property in addition to paying monthly priincipal and interest
Provides that if the lender amends the loan contract and blends the rate for the buyers assuming the loan - the seller still retains liability on the note and the mortgage. It applies to Michigan state-chartered lenders only
Organization established in 1929 by license law officials on the state commissions to assist one another in creating - administering - and enforcing license laws.

6. Voidable contract
A form of insurance coverage required in high loan-to-value ratio conventional loans to protect the lender in case the borrower defaults in loan payment.
An agreement that may be voided by the parties without legal consequences.
Latin meaning "let the buyer bewar"; applies to "sales talk" and not to statements of material facts.
Should an individual borrower default on a loan - the Rural Housing Service will pay the private financier for the loan

7. Sub agent
A licensee who is empowered to act for another broker in performing real estate brokerage tasks for a principal - and who owes the same duties to the principal as the agent of the principal.
The actual effective rate of interest charged on a loan expressed on a yearly basis; not the same as simple interest rate
Expenses seller owes on the day of closing but for which the buyer will take responsibility (such as property taxes)
A promise in a deed that the title causes no encumbrances except those set forth in the deed.

8. Express agency
The lender in a mortgage loan - who receives a mortgage from the borrower (mortgagor).
The limited warranty deed limits the potential liability of the seller and does not hold him liable for any encumbrances against the property prior to his ownership.
An agency relationship created by oral or written agreement between principal and agent
A court judgment obtained by a mortgagee for the amount of money a foreclosure sale proceeds were deficient in fully satisfying the mortgage debt.

9. Term mortgage
One in which the federal government does not insure or guarantee payment to the lender.
A statement in a listing contract protecting the broker's commission entitlement for a specified period of time after the contract expires; also called extender clause.
Any property acquuired by one spouse during marriage by gift or inheritance or purchased with the separate funds of a husband or wife.
Interest only loan (e. g. - construction loan--you are only paying interest - no principal)

10. Parol evidence rule
A concept allowing that oral explanations can support the wrtten words of contract but cannot contradict them.
An agreement between competent parties upon legal consideration (e. g. money - property - promise - etc. ) to do - or abstain from doing - some legal act.
The borrower is granted the right to pay the debt plus accrued interst and costs in full after the foreclosure sale - and thereby recover the property
A statement in a mortgage or deed of trust entitling the lender to declare the entire principal balance of the debt iimmediatley due and payable if the borrower sells the property during the mortgage term. Also known as due on-sale-clause.

11. Condition concurrent
A form of foreclosure that does not require court action to conduct a foreclosure sale; also called foreclosure under power of sale.
.A contract of sale and a financing insturment wherein the seller agrees to convey title when the buyer completes the purchase price installment payments; also called installment land contract - contract for deed - and conditional sales contract.
When the parties are to exchange performances at the same time.
The refusal of lending institutions to make loans for the purchase - construction - or repair of a dwelling because the area in which the dwelling is located is integrated or populated by minorities

12. Commission Paid to Sales Associates

13. Reality of consent
The seller's broker makes a false statement to the buyer about the property - and the broker does not know whether the statement is true or false
Permission to assume the mortgage at an interest rate prevailing at the time of assumption
An error of material fact by both parties
Mutual agreement between the parties to a contract; meeting of the minds; to exist and be free of duress - fraud - undue influence - and misrepresentation.

14. Rescission
Mutual agreement between the parties to a contract; meeting of the minds; to exist and be free of duress - fraud - undue influence - and misrepresentation.
Another term for escrow account
Cancellation of a contract when another party is in default
A type of land descripton utilizing townships and sections

15. Fannie Mae (FNMA)
Lender's estimate of borrower's settlement costs - required by RESPA to be furnished to borrower at time of loan application
The statement in a deed containing words of conveyance
one that is subordinate to a subsequent mortgage (e. g. - a second mortgage)
The shortened name for the Federal National Mortgage Association (FNMA) - a privately owned corporation that purchases FHA - VA - and conventional mortgages

16. Valuable consideration
Anything of value agreed upon by parties to a contract. Includes a promise.
Provides ample time for buyer and seller to effect a mutually beneficial purchase and sale without undue pressure or urgency
One in which the scheduled payment will not fully amortize the loan over the morgage term; therefore - to fully satisfy the debt - it requires a final payment called a balloon payment - larger than the uniform payments.
A federal law prohibiting discrimination in consumer loans

17. Multiple listing service (MLS)
A form of foreclosure that does not require court action to conduct a foreclosure sale; also called foreclosure under power of sale.
An organized method of sharing or pooling listings by member brokers. (electronic)
Nonfreehold estate; of limited duration - providing the right of possession and control but not title.
A buyer of property who relies on the records and is unaware of an unrecorded prior document

18. Federal Housing Administration (FHA)
The borrower's right to redeem the title pledged or conveyed in a mortgage or deed of trust after default and prior to a foreclosure sale by paying the debt in full - accrued interest - and lender's costs.
One with full authority over one property of the principal - such as a property manager
The U. S. agency that insures mortgage loans to protect lending institutions.
Interest only loan (e. g. - construction loan--you are only paying interest - no principal)

19. Arrears
Delinquency in maeeting an obligation; or - paid at the end of a period (e. g. - at the end of the month) for the previous period; payments in arrears include interest for using the money during the previous period.
Allows lender to sell mortgage at any time and obtain money invested rather than wait for completion of loan term.
A broker/salesperson's representing both buyer and seller in the same transaction (Mention at each of the first meetings with buyer and seller)
Neighborhoods that are made up of similar properties

20. Deed of trust
The aggregate of rights - powers - and priveleges conveyed with ownership of real estate
A form of mortgage wherein there is a third party - who is called a trustee
An east-west line in the rectangular method of property description
Title insurance that protects contract buyer against defects in contract seller's title.

21. Customer
Allows certain parcels of property to be removed from the mortgage lien if the loan balance is reduced a specified amount
A one-mile-square area of land described by the rectangular survey system - consisting of 640 acres
The third party in a real estate transaction
Provides that if the lender amends the loan contract and blends the rate for the buyers assuming the loan - the seller still retains liability on the note and the mortgage. It applies to Michigan state-chartered lenders only

22. Convey
To pass to another (as in title)
A contract whereby aproperty owner employs a real estate broker to market the property described in the contract
Cash sales - New financing
Mandates that the seller complete a disclosure form regarding the condition of the property

23. Settlement
The right for property to descend to the heirs of the owner as set out by will or by intestate succession.
A person authorized by a state to take oaths and acknowledgments
Consummation of a real estate contract; also called closing.
A white couple enters a racially restrictive covenant with a neighborhood. A black family - moved into this neighborhood. The white family brought it to court to enforce the contract and kept winning. Shelley appealed up to the Supreme Court. Raciall

24. Liquidated damages
The instrument that legally establishes a condominium; also called condominium declaration
The substitution of the title insurance company in the place of the insured for filing a legal action.
Leaseholds; estates with a length determined by agreement or statute; establishes possession of land as oppposed to ownership in fee.
Money to be paid and received as compensaton for a breach of contract.

25. Subrogation of rights
The substitution of the title insurance company in the place of the insured for filing a legal action.
Allows the broker employed to market the seller's property for a given period of time.
A right of title to land
Regulates the licensing and registration of persons who make - broker - or service one- to four-family residential first mortgage loans secured by Michigan property.

26. Contract remedies
Substitution of a new contract for a prior contract.
A law adding to the Fair Housing Act provisions to prevent discrimination based on mental or physical handicap or familial status
An accurate legal description of land
1. Specific performance - 2. Rescission - 3. Compensatory Damages 4. Liquidated Damages

27. impound account
A promise in ta deed assuring the grantee that the grantor has the title being conveyed.
The portion of a deed that contains the grantor's and witnesses' signatures and the acknowledgment (notary).
A written instrument transferring an interest in real property when delivered to the grantee.
Another term for escrow account

28. Due on sales clause
A statment in amortgage or deed of trust entitling the lender to declare the entire principal balance of the debt immediately due and payable if the borrower sells the property during the mortgage term. Also known as due on sale clause.
A fee paid by a realtor to a brokerage out of the area for a buyer listing
The shortened name for the Federal National Mortgage Association (FNMA) - a privately owned corporation that purchases FHA - VA - and conventional mortgages
A gift of personal property by will.

29. Open listing
A listing given to one or more brokers wherein the broker procuring a sale is entitled to the commission but imposes no commission obligation on the owner in the event the owner sells the property to someone who was not interested in the property by
A leasehold estate that may be terminated at the desire of either party
The U. S. agency that insures mortgage loans to protect lending institutions.
Mortgage allowing elderly homeowners to borrow against the equity in their homes to help meet living expenses.

30. Credit
A person authorized to act on behalf of another
In a closing statement - money to be recieved or credit given for money or an obligation given.
The seller's broker makes a false statement to the buyer about the property - and the broker does not know whether the statement is true or false
A type of land descripton utilizing townships and sections

31. Right of first refusal
An agreement based on mutual promises that provide the consideration. (A "done deal" both parties have fulfilled promises)
A form of mortgage wherein there is a third party - who is called a trustee
A statement in a lease or condominium articles of association that provides for a lessee or an association to have the first opportunity to purchase the property before it is offered to anyone else.
A listing given to one or more brokers wherein the broker procuring a sale is entitled to the commission but imposes no commission obligation on the owner in the event the owner sells the property to someone who was not interested in the property by

32. Disclosure statement
The amount of money (usually the loan amount) on which interest is either paid or recieved.
An estimate of value of a particular property - at a particular time for a specified purpose.
An accounting of all financial aspects of a mortgage loan required of lenders to borrowers in residential mortgage loans by Regulation Z of the Federal Reserve Board.
The seller's broker makes a false statement to the buyer about the property - and the broker does not know whether the statement is true or false

33. Savings Banks (S&L's)
A major source of funds for financing residential real estate.
A right of title to land
The prompt and total communication to the principal by the agent of any information that is material to the transaction for which the agency is created.
A federal law regulating activities of lending institutions in making mortgage loans for housing.

34. Mortgage
A written instrument used to pledge a title to real property to secure payment of a promissory note.
Provides ample time for buyer and seller to effect a mutually beneficial purchase and sale without undue pressure or urgency
A physical or mental impairment that substantially limits one or more of the major life activities of a person
Make good loans to qualified borrowers ( e. g. Rural Development loans)

35. Independent contractor

36. Sherriff's deed
A white couple enters a racially restrictive covenant with a neighborhood. A black family - moved into this neighborhood. The white family brought it to court to enforce the contract and kept winning. Shelley appealed up to the Supreme Court. Raciall
Replaced the 1968 Michigan Fair Housing Act in prohibiting discrimination in the sale - rental - or lease of housing accommodation.
A policy that insures a mortgagee against defects in a title pledged by a morgagor to secure payment of a mortgage loan.
A deed issued to the buyer of property that was sold under court order to pay off a debt.

37. Guaranteed Loan Program
Assures the absence of hazardous materials or problems relating to regulations of the EPA.
A formal statement before an authorized official (e. g. notary public) by a person who executed a deed - contract - or other document - that s was (is) his or her free act.
Should an individual borrower default on a loan - the Rural Housing Service will pay the private financier for the loan
A policy insuring an owner of real property against financial loss resulting from a title defect.

38. Granting clause
Finds someone to lend the $
A registered trademark of the National Associaton of REALTORS*; its use is limited to members only.
The statement in a deed containing words of conveyance
A form of ownership in which the purchsaser owns the property for a certain specified time interval.

39. Reverse annuity mortgage (RAM)
Mortgage allowing elderly homeowners to borrow against the equity in their homes to help meet living expenses.
A form of ownership of real property - recognized in all states - consisting of individual ownership of some aspects and co-ownership in other aspects of that property.
The legal procedure of enforcing payment of a debt secured by a mortgage or any other lien.
A wife's interest in her husband's real property

40. Nonfreehold estate
A person - such as an agent - placed in a position of trusted in relation to the person for whose benefit the relationship is created; essentially the same as a trustee
Leaseholds; estates with a length determined by agreement or statute; establishes possession of land as oppposed to ownership in fee.
A three-day right of rescission for certain loan transactions
A law in effect in all states requiring certain contracts to be in writing to be valid.

41. Negative amortization
A form of co-ownership limited to husband and wife - with the right of survivorship
When the loan payment amount is not sufficient to cover interest due - the shortfall added back into principal - causing principal to grow larger after payment is made
The portion of a deed that contains the grantor's and witnesses' signatures and the acknowledgment (notary).
The seller's broker makes a false statement to the buyer about the property - and the broker does not know whether the statement is true or false

42. Junior mortgage
The instrument that legally establishes a condominium; also called condominium declaration
An exaggeration of a property's benefits.
one that is subordinate to a subsequent mortgage (e. g. - a second mortgage)
One in which all affected parties are bound by the knowledge of a fact even though they have not been actually notified of such fact.

43. Accord and satisfaction
The duty of agents not to disclose any information about their clients.
One that does not impose a prepayment penalty.
A new agreement by contracting parties that is satisfied by full performance there by terminating the prior contract as well
A provision iin a mortgage or deed of trust that permits the lender to declare the entire principal balance of the debt immediately due and payable if the burrower is in default

44. Listing contract
A promise in a deed that the title causes no encumbrances except those set forth in the deed.
A contract whereby aproperty owner employs a real estate broker to market the property described in the contract
A form of organization that makes and services mortgage loans.
Legal purpose.

45. Agent's Responsibility to Third Persons

46. Shelley v. Kraemer
An agreement that has been fully performed.
A federal prohibition on discrimination in the sle - rental - or financing of housing on the basis of race - color - religion - sex - or national origin
A white couple enters a racially restrictive covenant with a neighborhood. A black family - moved into this neighborhood. The white family brought it to court to enforce the contract and kept winning. Shelley appealed up to the Supreme Court. Raciall
A law adding to the Fair Housing Act provisions to prevent discrimination based on mental or physical handicap or familial status

47. Mortgage assumption
Land and everything permanently attached to land
Failure - wthout legal excuse - to perform any proise that forms the whole or part of a contract.
Condominium unit composed of only vacant land with surface improvements or with air space within which a building is to be constructed.
The transfer of mortgage obligations to purchaser of the mortgaged property.

48. Client
The principal in a real estate transaction
A promise in a deed (or lese) that the grantee (or lessee) will not be distrubed in his or her use of the property because of a defect in the grantor's (or lessor's) title
One who takes over management of a property until the foreclosure process is complete
The borrower in a mortgage loan who executes and delivers a mortgage to the lender.

49. Tenants by the entirety
Consummation of a real estate contract; also called closing.
A threshold after which a realtor keeps all commissions and the broker keeps none
A form of co-ownership limited to husband and wife - with the right of survivorship
A temporary mortgage used to borrow money to contruct an improvement on land

50. Annual percentage rate (APR)
The actual effective rate of interest charged on a loan expressed on a yearly basis; not the same as simple interest rate
Occurs when a seller's broker conceals a defect in the property from the buyer or misrepresents the existence of a defect
The aggregate of rights - powers - and priveleges conveyed with ownership of real estate
An agreement that has no legal force or effect.