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🇺🇸 Real Estate Broker License Exam · flashcards
Real Estate Broker License Exam Trust Accounts and Real Estate Finance Management Flashcards
57 question-and-answer cards covering Trust Accounts and Real Estate Finance Management as it is examined in Real Estate Broker License Exam. 24 of them are printed below, taken from across the deck — no signup, no paywall on the preview.
24 sample cards from the Trust Accounts and Real Estate Finance Management deck
Sampled from the end of the deck, so these are different cards from the ones shown on the syllabus page.
What is the secondary mortgage market?
The market where existing mortgages are bought and sold among investors and agencies (e.g., Fannie Mae, Freddie Mac), providing lenders liquidity to make new loans.
What role does Fannie Mae (FNMA) play?
The Federal National Mortgage Association buys conventional mortgages from lenders in the secondary market and packages them into mortgage-backed securities, providing liquidity to lenders.
What role does Freddie Mac (FHLMC) play?
The Federal Home Loan Mortgage Corporation buys mortgages (originally from thrifts/savings institutions) in the secondary market and issues mortgage-backed securities, adding liquidity and stability.
What role does Ginnie Mae (GNMA) play, and how does it differ from Fannie/Freddie?
The Government National Mortgage Association is a government-owned corporation that guarantees mortgage-backed securities backed by government-insured loans (FHA/VA/USDA). Unlike Fannie/Freddie, it is fully government-owned and does not buy/sell loans itself.
What is the purpose of the Truth in Lending Act (TILA)?
To require lenders to disclose the true cost of credit—including the finance charge and APR—so consumers can compare loan terms and make informed borrowing decisions.
What is Regulation Z?
The Federal Reserve regulation that implements TILA, governing credit cost disclosures, advertising of credit terms, and the consumer's right of rescission.
What is the Annual Percentage Rate (APR)?
The total yearly cost of credit expressed as a percentage, including the interest rate plus certain finance charges/fees—allowing borrowers to compare loans on equal footing.
Under Reg Z, what is the 'right of rescission'?
For certain refinances or home-equity loans on a borrower's principal residence, the borrower has 3 business days to cancel the loan. (It does not apply to purchase-money loans.)
Under TILA/Reg Z advertising rules, what is a 'trigger term'?
A specific credit term (e.g., down payment amount, monthly payment, number of payments, or finance charge) that, if advertised, requires the ad to disclose additional terms such as APR and total terms of repayment.
What is the purpose of the Real Estate Settlement Procedures Act (RESPA)?
To protect consumers in residential real estate transactions by requiring disclosure of settlement costs and prohibiting kickbacks and referral fees that increase the cost of settlement services.
What does RESPA's Section 8 prohibit?
Kickbacks, referral fees, and unearned fees—paying or receiving anything of value for the referral of settlement-service business (e.g., title, escrow, lender referrals).
What are the two TRID disclosure forms, and when must each be provided?
The Loan Estimate (LE)—provided within 3 business days of application—and the Closing Disclosure (CD)—provided at least 3 business days before consummation/closing.
What does the TILA-RESPA Integrated Disclosure (TRID) rule accomplish?
It combined the older TILA and RESPA disclosure forms into two standardized forms—the Loan Estimate and Closing Disclosure—to make loan costs clearer and easier to compare.
What is the purpose of the Loan Estimate (LE)?
To give the borrower a good-faith estimate of loan terms, projected payments, interest rate, and closing costs shortly after application so they can shop and compare lenders.
What is the purpose of the Closing Disclosure (CD)?
To provide the borrower the final, actual loan terms and closing costs, allowing comparison against the Loan Estimate before the loan closes.
What does the Equal Credit Opportunity Act (ECOA) prohibit?
Discrimination in any aspect of a credit transaction based on race, color, religion, national origin, sex, marital status, age, or because income comes from public assistance.
Name common mortgage fraud red flags a broker should watch for.
Inflated/false appraisals, straw buyers, falsified income or employment documents, undisclosed kickbacks, last-minute changes to parties, and 'too good to be true' cash-back-at-closing arrangements.
What is a profit-and-loss (income) statement for a real estate business?
A financial statement summarizing revenue (commissions/income) minus operating expenses over a period to show net profit or loss.
In real estate, what is cash flow?
The money remaining after operating expenses and debt service are paid from income—positive cash flow means income exceeds expenses; negative means expenses exceed income.
What is the difference between operating expenses and reserves in a budget?
Operating expenses are recurring costs to run the business/property (utilities, maintenance, fees); reserves are funds set aside for future major repairs or unexpected costs/replacements.
When must a broker issue a Form 1099 to an independent-contractor agent?
When the broker pays an independent-contractor agent $600 or more in commissions during the tax year (reported on Form 1099-NEC for nonemployee compensation).
Why are most real estate agents classified as independent contractors for tax purposes?
Because they typically control their own hours/methods and are paid by commission; this means no income tax is withheld and they are responsible for their own self-employment taxes.
Give examples of deductible business expenses for a real estate agent.
Vehicle/mileage, marketing and advertising, MLS and license fees, professional dues, office supplies, business use of home, continuing education, and insurance.
What is the basic formula for net operating income (NOI) used in real estate finance?
NOI = Gross Operating Income (effective rental income plus other income) minus Operating Expenses, excluding debt service (mortgage payments) and income taxes.
What this deck covers
The Trust Accounts and Real Estate Finance Management deck follows the Real Estate Broker License Exam Trust Accounts and Real Estate Finance Management syllabus — 4 chapters and 19 topics — so questions land on material that is genuinely examinable rather than trivia around it. That works out to roughly 14.3 cards per chapter.
Answers are written to be recallable, not just readable — averaging about 176 characters, which is long enough to carry the reasoning and short enough to say out loud.
A deck like this earns its keep on the second and third pass. Read the syllabus first so you know the shape of the subject, then use the cards to find the specific facts that have not stuck.
Trust Accounts and Real Estate Finance Management flashcards FAQ
How many Trust Accounts and Real Estate Finance Management flashcards are in this Real Estate Broker License Exam deck?
57 cards. This page previews 24 of them, sampled evenly across the deck so you can judge the difficulty before installing anything.
Are these Real Estate Broker License Exam flashcards free?
Yes. The preview here is free to read with no signup, and the full 57-card deck is free inside the Examius app.
What do the Trust Accounts and Real Estate Finance Management cards cover?
They follow the Real Estate Broker License Exam Trust Accounts and Real Estate Finance Management syllabus — 4 chapters and 19 topics — so the questions track what is actually examinable.
How should I use these flashcards?
Read the syllabus first so you know the shape of the subject, then drill the deck. Examius schedules each card with spaced repetition, so cards you keep missing come back sooner and ones you know drift further apart.