IREB - Illinois Real Estate Broker Examination

Question 21: A seller closes on a residential property in downstate Illinois outside of Chicago. The Illinois real estate transfer tax applies, and the seller customarily pays the state portion. Which of the following BEST identifies the state transfer tax rate under Illinois law?

Fifty cents per five hundred dollars of value

Three dollars seventy-five cents per five hundred dollars

Twenty-five cents per five hundred dollars of value

One dollar fifty cents per five hundred dollars

Question 22: The March 2024 "Bring Chicago Home" referendum proposed restructuring the Chicago Real Property Transfer Tax into a tiered system with higher rates on properties over one million dollars. Which of the following BEST describes the outcome of the referendum and the current Chicago tax structure?

Referendum passed; tiered structure now applies

Referendum failed; flat structure remains in effect

Referendum was withdrawn before any ballot vote

Referendum is still pending a future vote

Question 23: A buyer and seller close on a residential property in Naperville. The PTAX-203 transfer declaration is prepared for filing with the recorder. Which of the following BEST describes the role of the PTAX-203 form in an Illinois real estate transaction?

Application for property tax exemption claim

Tenant disclosure for short-term rental units

Declaration filed with the deed showing sale price and tax

Voluntary statement of construction value

Question 24: A seller in Lincoln Square plans to convey property to her adult son for no consideration as a gift. The transfer is exempt from Illinois transfer tax. Which of the following BEST describes what the parties must still do regarding the PTAX-203 declaration?

Skip the PTAX-203 because the transfer is exempt

Wait until the next tax cycle to file

Pay the tax and seek a refund afterwards

File the PTAX-203 with the exemption claimed

Question 25: A property in Chicago sells for five hundred thousand dollars. The buyer pays the city portion of the Chicago Real Property Transfer Tax and the seller pays the supplemental CTA portion. Which of the following BEST describes the combined Chicago transfer tax rate currently in effect?

Zero point five zero percent total combined

One point zero five percent total combined

Two point five zero percent total combined

Three point seven five percent total combined

Question 26: A borrower in Schaumburg secures a thirty-year fixed-rate mortgage from a local bank to purchase a single-family home. The bank later sells the loan to an investor in the secondary market. Which of the following BEST identifies the function of the secondary mortgage market?

Originates loans directly to consumers

Sets federal interest rate policy

Buys and sells existing mortgage loans

Approves lenders to do business

Question 27: A buyer pays two discount points on a four hundred thousand dollar mortgage to reduce the interest rate. Which of the following BEST describes the dollar amount the two discount points represent under standard real estate finance terminology?

Two percent of the purchase price

Two percent of the appraised value

A flat fee of two thousand dollars

Two percent of the loan amount

Question 28: A borrower applies for a mortgage on a home that has a contract price of three hundred thousand dollars but appraises at two hundred ninety thousand. The lender calculates the loan-to-value ratio for underwriting. Which of the following BEST identifies the figure the lender uses as the denominator?

The lesser of contract price or appraised value

The original list price of the property

The contract price agreed by the parties

The greater of contract price or appraised value

Question 29: A government-sponsored enterprise was chartered by Congress to provide liquidity in the conventional conforming mortgage market by purchasing loans from lenders and packaging them into mortgage-backed securities. Which of the following BEST identifies the institutions known as GSEs in U.S. mortgage finance?

Ginnie Mae as a direct federal agency

Fannie Mae and Freddie Mac entities

The Federal Reserve and Treasury Department

Veterans Affairs and FHA insurance funds

Question 30: A federal agency wholly owned by the United States government guarantees mortgage-backed securities that pool FHA, VA, and USDA loans. The guarantees carry the full faith and credit of the federal government. Which of the following BEST identifies this agency?

Federal Housing Finance Agency

Federal National Mortgage Association

Federal Home Loan Mortgage Corporation

Government National Mortgage Association

Question 31: A first-time buyer with a credit score of 580 wants to purchase a single-family home in Cicero with the lowest possible down payment among standard programs. The buyer also wants the most lenient credit standards. Which of the following BEST describes the appropriate loan program?

Conventional loan with twenty percent down

VA guaranteed loan with no down payment

FHA insured loan with three and a half percent down

USDA Rural Development loan with no down

Question 32: A conventional borrower has paid down her loan to a loan-to-value ratio of seventy-eight percent based on the original property value. The borrower wants to know when private mortgage insurance will automatically terminate under federal law. Which of the following BEST identifies the trigger?

When LTV reaches seventy-eight percent automatically

When LTV reaches eighty percent on borrower request

When the loan reaches a balance below the homestead exemption

When the lender voluntarily decides to cancel coverage

Question 33: A qualifying veteran applies for a VA guaranteed mortgage to purchase a home in Springfield. The veteran is making no down payment on a loan within the local conforming limit. Which of the following BEST describes the funding fee feature of a typical VA loan?

No funding fee applies to first-time VA loans

Funding fee is paid by the lender

Funding fee is paid only by surviving spouses

Borrower pays funding fee which may be financed

Question 34: A homeowner aged sixty-five wants to convert home equity to monthly cash payments without making monthly principal and interest payments on a Chicago condominium she has owned for decades. Which of the following BEST identifies the loan program designed for this purpose?

VA cash-out refinance loan for veterans

Conventional adjustable-rate mortgage with teaser

Home Equity Conversion Mortgage reverse mortgage

USDA Section 502 direct rural housing loan

Question 35: A borrower obtains an adjustable-rate mortgage with caps quoted as 2/2/5. Which of the following BEST describes the meaning of the three numbers in standard ARM cap notation?

Loan term, payment cap, balloon period

Initial cap, periodic cap, lifetime cap

Down payment, points charged, origination fee

Index, margin, prepayment penalty terms

Question 36: A borrower's mortgage contains a clause allowing the lender to demand immediate payment of the entire remaining principal balance upon default. Which of the following BEST identifies this clause?

Defeasance clause in the mortgage

Alienation clause restricting transfers

Prepayment clause permitting early payoff

Acceleration clause on borrower default

Question 37: A buyer assumes an existing mortgage when purchasing a Lincoln Park condominium without first obtaining the lender's consent to the transfer. The lender enforces a clause allowing it to demand payment of the full balance in response. Which of the following BEST identifies this clause?

Acceleration clause based on payment default

Alienation or due-on-sale clause

Subordination clause for junior liens

Escrow clause for tax payments

Question 38: Upon full payment of all mortgage obligations, the lender executes and records a document releasing the mortgage lien from the property. Which of the following BEST identifies the mortgage clause that obligates the lender to perform this release?

Acceleration clause on default

Subordination clause for liens

Defeasance clause on full payment

Power-of-sale clause in deeds of trust

Question 39: Illinois is a lien-theory state, and Illinois mortgage foreclosure proceeds judicially under the Illinois Mortgage Foreclosure Law. Which of the following BEST describes the borrower's right to reinstate a defaulted mortgage under Illinois law?

Reinstatement within ninety days after service of complaint

Reinstatement within thirty days of demand letter

Reinstatement within one year of foreclosure filing

No reinstatement available once foreclosure is filed

Question 40: Following entry of a foreclosure judgment on an owner-occupied residential property in Illinois, the borrower retains a right to redeem the property by paying the full amount due. Which of the following BEST describes the residential redemption period under Illinois law?

Sixty days from service of the complaint

Six months from filing of the lawsuit

One year from confirmation of the sale

Later of seven months from service or three months from judgment

IREB Illinois Real Estate Broker Examination - Set 2 - Part 2