A condominium in Brooklyn closes on September 15th. The annual property taxes of $8,760 were paid in advance by the seller for the entire year. Using the statutory year method (360 days), how much does the buyer owe the seller for the prepaid taxes?
Correct Answer
A) $2,190.00
Using 360-day year: Daily tax = $8,760 ÷ 360 = $24.33. From Sept 15 to Dec 31 = 15.5 days in Sept + 30 days each in Oct, Nov, Dec = 15.5 + 90 = 105.5 days, but buyer is responsible from Sept 15 onward = 90 days remaining. Buyer owes: 90 × $24.33 = $2,190.
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Predatory lending refers to unfair, deceptive, or abusive lending practices that impose unjustified terms on borrowers, often targeting vulnerable populations. It includes practices like excessive fees, inflated appraisals, and unnecessary refinancing.
RESPA is a federal law that requires lenders to provide borrowers with information about settlement costs, prohibits kickbacks and referral fees, and limits escrow account deposits. It applies to federally related mortgage loans.
The secondary mortgage market is where existing mortgage loans are bought and sold between lenders, investors, and government-sponsored enterprises (GSEs) like Fannie Mae, Freddie Mac, and Ginnie Mae.
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