Benchmark – Strategic Planning: Action Plan

structionsResources for questions about Dime and the Simon Property Grouphe Simon Property Grouphttps://www.sec.gov/ix?doc=/Archives/edgar/data/1022344/000155837021001700/spg-20201231x10k.htmDime Community Bancshareshttps://www.sec.gov/ix?doc=/Archives/edgar/data/846617/000084661721000014/dcom-20201231x10k.htm
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 Question Completion Status: QUESTION 1

  1. A mortgage loan is a loan secured by real property.

 True

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 False

1.6129 points   QUESTION 2

  1. A 5/1 adjustable rate mortgage has affixed rate period for five years and then the rate can adjust once every year.

 True

 False

1.6129 points   QUESTION 3

  1. Adjustable-rate mortgages, or ARMs, have monthly payments that can move up and down as interest rates in the market fluctuate.

This is a risk to the borrower.

 True

 False

1.6129 points   QUESTION 4

  1. Base your answers to the following questions on data from:

If your credit score is 600 and you are trying to finance a $300,000 home in the zip code 11210 with a down payment of $60,000 the offers are 4% per year by lenders submitting quotes to Zillow..

https://www.zillow.com/mortgage-rates/#/vaEligible

Loan Purpose

Purchase

Zip Code

11210

Purchase Price

$300,000

Down Payment

20%

Credit Score

600

Military Veteran

No

Property Type

Single Family Home

How is home used

Primary Residence

First Time Buyer

Yes

Desired Loan Program

30 Year Fixed

Points

0

 True

 False

1.6129 points   QUESTION 5

  1. Base your answers to the following questions on data from:

If your credit score is 760 and you are trying to finance a $300,000 home in the zip code 11210 with a down payment of $60,000 the lender fees you must pay will be less than $500.

https://www.zillow.com/mortgage-rates/#/vaEligible

Loan Purpose

Purchase

Zip Code

11210

Purchase Price

$300,000

Down Payment

20%

Credit Score

760

Military Veteran

No

Property Type

Single Family Home

How is home used

Primary Residence

First Time Buyer

Yes

Desired Loan Program

30 Year Fixed

Points

0

 True

 False

1.6129 points   QUESTION 6

  1. Base your answers to the following questions on data from:

 http://www.freddiemac.com/pmms/

The rates on 5/1 ARMs are currently higher than the rate on a 30 year fixed rate mortgages.

 True

 False

1.6129 points   QUESTION 7

  1. Base your answers to the following questions on data from:
https://www.zillow.com/mortgage-rates/#/vaEligible

As a persons credit score declines; his/her ability to secure mortgage credit will become more difficult and the cost of credit he/she does secure will increase.

Loan Purpose

Purchase

Zip Code

11210

Purchase Price

$300,000

Down Payment

20%

Credit Score

  700-719 vs 760 and above

Military Veteran

No

Property Type

Single Family Home

How is home used

Primary Residence

First Time Buyer

Yes

Desired Loan Program

30 Year Fixed

Points

0

 True

 False

1.6129 points   QUESTION 8

  1. I am not able to make my mortgage payments. The amount I owe the lender is more than the value of my home.  I ask the lender if I can do a short sale of my home. The lender agrees. The proceeds from the short sale are used to pay the lender. In some cases, this can be a less costly resolution to default than foreclosure for both the borrower and lender.

 True

 False

1.6129 points   QUESTION 9

  1. If a borrower would like to lower his/her monthly mortgage payments he/she can make a larger initial down payment.

 True

 False

1.6129 points   QUESTION 10

  1. If you buy a home all of your mortgage payments you make will increase the value of your equity in the home by that same amount.

 True

 False

1.6129 points   QUESTION 11

  1. If you issue a thrifty year fixed rate mortgage to finance the purchase of a home you are locked into this rate for thirty years even if interest rates decline over time. You have know way out of this contract other than default.

 True

 False

1.6129 points   QUESTION 12

  1. If your home’s value drops below your outstanding loan balance, you have negative equity.

 True

 False

1.6129 points   QUESTION 13

  1. In New York State, once you miss a single mortgage loan payment the lender has the right to immediately seize your property and sell it.
https://www.nycourts.gov/CourtHelp/pdfs/Foreclosureflowchart.pdf

 True

 False

1.6129 points   QUESTION 14

  1. Inflation reduces the real interest rate a borrower pays of the mortgage is a fixed rate mortgage.

 True

 False

1.6129 points   QUESTION 15

  1. Interest payments due on a fixed rate mortgage increase over time.

 True

 False

1.6129 points   QUESTION 16

  1. Interest payments due on a fixed rate mortgage increase over time.In other words the interest you owe in year one will be greater than the interest you owe in year 15 assuming your mortgage term is 30 years.

 True

 False

1.6129 points   QUESTION 17

  1. Payments are negative! Make sure you use the “-“sign. The minus sign. In Excel payments are negative numbers. Think of he money flowing away from you. Do not use the “$” sign. Just numbers no symbols. For example -6,234.16 is the way to answer. 

Please find the payments a borrower owes based on the following data:

Use the PMT function. You must round to two decimal places.

rate3%
nper10
PV$200,000
FV0
Type0

1.6129 points   QUESTION 18

  1. Payments are negative! Make sure you use the “-“sign. The minus sign. In Excel payments are negative numbers. Think of he money flowing away from you. Do not use the “$” sign. Just numbers no symbols. For example -6,234.16 is the way to answer. 

Please find the payments a borrower owes based on the following data:

Use the PMT function. You must round to two decimal places.

rate3%
nper30
PV$400,000
FV0
Type0

1.6129 points   QUESTION 19

  1. Payments are negative! Make sure you use the “-“sign.The minus sign. In Excel payments are negative numbers. Think of he money flowing away from you. Do not use the “$” sign. Just numbers no symbols. For example -6,234.16 is the way to answer. 

Please find the payments a borrower owes based on the following data:

rate5%
nper30
PV$200,000
FV0
Type0

Use the PMT function. You must round to two decimal places.

1.6129 points   QUESTION 20

  1. Principal payments due on a fixed rate mortgage decline over time.

 True

 False

1.6129 points   QUESTION 21

  1. The APR or Annual Percentage Rate includes fees and points that a borrower must pay. This is why the APR is higher than the mortgage interest rate.

 True

 False

1.6129 points   QUESTION 22

  1. The bank offers to finance your home. The bank will lend you $200,000 for thirty years. The loan will be collateralized by the home you are buying. You are mortgaging your home in order to raise the $200,000. This is what is known as a mortgage loan. If you default the bank will have the right to foreclose on your property.  The interest rate on your loan is 10%. Payments are made once a year at the end of the year.

Remember that payments are a negative number when working with Excel. If the PV is positive then the PMT will be negative. After thirty years the 30 year fixed rate mortgage is paid off whcih means that the future value is zero.

Do not use dollar signs. You can use the minus sign to denote a negative number.

What is your annual mortgage payment.

Use the PMT function in Excel.

1.6129 points   QUESTION 23

  1. The one-year treasury rate is never used as an index for an adjustable rate mortgage because the interest rate that the government pays never changes.

 True

 False

1.6129 points   QUESTION 24

  1. When a borrower misses a mortgage payment they have defaulted. They have broken the financial contract between themselves and the lender. This gives the lender the right to begin foreclosure proceedings. This could lead to the lender taking possession of the borrower’s home and selling it on the open market.  

 True

 False

1.6129 points   QUESTION 25

  1. You are going to buy a home for $500,000. You are trying to decide between a issuing a 30 year fixed rate mortgage or a 15 year fixed rate mortgage to finance 80% of the price. Your objective is to have lower montlhy payments. The interest rate on the 30 year loan is 4.24% and on he 15 year loan the interest rate is 3.365%.  You should choose the 15 year loan.

Use the following mortgage calculator

https://fm.fanniemae.com/homeownership/resources/financial-calculators/mortgage-calculator

 True

 False

1.6129 points   QUESTION 26

  1. A major market for Dime Community Bank is multifamily residential, commercial real estate lending.

 True

 False

1.6129 points   QUESTION 27

  1. A major source of funds for Dime Community Bancshares is core deposits.

 True

 False

1.6129 points   QUESTION 28

  1. Although The Dime Savings Bank of Williamsburg is a New York City based financial institution most of its loan portfolio consist of secure real estate loans issued to finance real estate in New Jersey.

 True

 False

1.6129 points   QUESTION 29

  1. Approximately 83% of Dime Community Bank’s loans are secured by real estate located in the NYC boroughs of Brooklyn, Queens and Manhattan as of December 31, 2018.

 True

 False

1.6129 points   QUESTION 30

  1. An important source of funds for Dime Savings Bank of Williamsburg is the sale of mortgages in the secondary market.

 True

 False

1.6129 points   QUESTION 31

  1. Bank managers at Dime Community Bancshares consider commercial real estate loans as riskier assets than both one-to-four family and multifamily residential real estate loans. This is partially because the borrower’s ability to repay the loan depends on the success of the commercial tenants who rent the property.

 True

 False

1.6129 points   QUESTION 32

  1. Bank managers at Dime Community Bancshares require a higher ratio of rental income to debt service for commercial real estate loans than multifamily loans.

 True

 False

1.6129 points   QUESTION 33

  1. Bank managers at Dime Community Bancshares require a property to generate sufficient rental income to cover a multiple of the debt service.

 True

 False

1.6129 points   QUESTION 34

  1. Dime Community Bancshares classifies a building as commercial real estate if less than 80% of the rental income is received from residential tenants.

 True

 False

1.6129 points   QUESTION 35

  1. Dime Community Bancshares lending activities consist solely of the origination of adjustable multifamily residential (generally buildings possessing a minimum of five residential units) and commercial real estate loans.

 True

 False

1.6129 points   QUESTION 36

  1. Dime Community Bancshares originates both adjustable-rate mortgages (“ARMs”) and fixed-rate loans.

 True

 False

1.6129 points   QUESTION 37

  1. Dime Community Bancshares specializes in making loans with very high loan to value ratios. Most of the loans originated by the bank will have loan to value ratios of 90%.

 True

 False

1.6129 points   QUESTION 38

  1. Dime Community Bancshares will not finance “mixed-use” properties. They are too risky.

 True

 False

1.6129 points   QUESTION 39

  1. Dime Savings Bank of Williamsburg makes loans secured by mixed-use properties. These loans are either classified as residential mixed use or commercial mixed use based upon the percentage of the property’s rental income received from its residential as compared to its commercial tenants. 

 True

 False

1.6129 points   QUESTION 40

  1. Generally, the interest rate on the commercial real estate loans originated by Dime Community Bancshares is equal to the 5-year Federal Home Loan Bank of New York advance rate.

 True

 False

1.6129 points   QUESTION 41

  1. Loan officers of Dime Savings Bank of Williamsburg consider only the future value of a property when deciding whether or not to make a loan.

 True

 False

1.6129 points   QUESTION 42

  1. Managers of Dime Community Bank have a policy of generally initiating foreclosure proceedings on real estate loans when a loan enters non-accrual status based upon non-payment.

 True

 False

1.6129 points   QUESTION 43

  1. The business of Dime Community Bank is insulated from changes in real estate values because it only makes variable rate loans.

 True

 False

1.6129 points   QUESTION 44

  1. The competitive advantage of Dime Community Bank is the willingness of its managers to originate loans to subprime borrowers.

 True

 False

1.6129 points   QUESTION 45

  1. The general range of commercial real estate loans on the balance sheet of Dime Community Bancshares is the is between $1.0 million to $5.0 million.

 True

 False

1.6129 points   QUESTION 46

  1. The multifamily residential loans on the balance sheet of Dime Community Bancshares typically carry shorter average terms to maturity than one-to-four family residential loans.

 True

 False

1.6129 points   QUESTION 47

  1. The principal business of Dime Community Bank is gathering deposits from customers within its market area and via the internet, and investing them primarily in money market securities.

 True

 False

1.6129 points   QUESTION 48

  1. The value of The Dime Savings Bank of Williamsburg is insulated from changes in the value of real estate.

 True

 False

1.6129 points   QUESTION 49

  1. While Dime Community Bank is based in Brooklyn; management has decided to focus its lending activity in New England which they believe is a much more conservative market area.

 True

 False

1.6129 points   QUESTION 50

  1. The Simon Property Group does not own malls it only manages malls.

 True

 False

1.6129 points   QUESTION 51

  1. As of December 31, 2020, the Simon Property Group rented from mall owners 203 income-producing properties in the United States, which consisted of 99 malls, 69 Premium Outlets, 14 Mills, four lifestyle centers, and 17 other retail properties in 37 states and Puerto Rico.

 True

 False

1.6129 points   QUESTION 52

  1. The Simon Property Group only makes equity investments in real estate it will not make secured loans backed by real estate.

 True

 False

1.6129 points   QUESTION 53

  1. The Simon Property Group relies on debt to finance real estate acquisitions and real estate development projects.

 True

 False

1.6129 points   QUESTION 54

  1. The Simon Property Group invests in employee development. Management believes that the success of Simon Property Group depends on their ability to retain the best talent.

 True

 False

1.6129 points   QUESTION 55

  1.  

The compensation scheme of the Simon Property Group is designed to attract specifically MBA graduates from IVY league schools in order to minimize the need to train and offer on the job training and development.  

 True

 False

1.6129 points   QUESTION 56

  1. The performance of the Simon Property Group is linked to the commercial performance of their tenants.

 True

 False

1.6129 points   QUESTION 57

  1. The performance of the Simon Property Group is affected by both macro and micro economic conditions.

 True

 False

1.6129 points   QUESTION 58

  1. The performance of the Simon Capital Group is insulated from its cost of capital because the company does not borrow.

 True

 False

1.6129 points   QUESTION 59

  1. The Simon Capital Group insulates its operations from the performance of its tenants by buying commercial insurance to cover all defaults on leases.

 True

 False

1.6129 points   QUESTION 60

  1. Insurance premiums are a cost for the Simon Property Group.

 True

 False

1.6129 points   QUESTION 61

  1. A risk that the Simon property Group has to consider is that consumers will avoid traveling for shopping due to a heightened level of concern for safety in public places.

 True

 False

1.6129 points   QUESTION 62

  1. The Simon Property Group expects 30% of their anchor leases to expire in 2026. This is a result of poor management and poses a critical risk to the company.

 True

 False

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