unit 12 exam
In which of the following situations is a lender prohibited from enforcing an alienation clause?
A transfer between parent and child
Suzy has lost her job and wasn't able to make last month's mortgage payment. How is her lender most likely to help Suzy stay in her home?
Agreeing to modify her loan
When a buyer takes over the seller's original loan with the lender's permission, this is called ______.
An assumption
How is a loan assumption documented?
The buyer and seller both sign an assumption agreement.
Which of the following statements about an assumption is NOT true?
The seller's credit score may improve although he's not making any mortgage payments.
When is a loan modification considered?
When a borrower has missed payments but still has some financial security
Which of the following is one a way a loan may be modified when a borrower is having difficulty making payments?
Extend the amortization schedule.
Stephanie was having trouble making her mortgage payments. Now her payments are lower than they were, and she's able to pay them each month. This is because her lender ______.
Gave her a loan modification
Which of the following situations would make a borrower ineligible for a loan modification?
Borrower has filed for bankruptcy
Denzel's loan payments have been reduced because his lender agreed to extend the amortization schedule stated on his note. This is the result of a ______.
Loan modification agreement
Maggie has a neighbor, Jim, who is facing foreclosure. She likes Jim and wants to help him out, so they agree to do a "subject to" purchase. What does this mean?
Maggie will take over Jim's loan payments without telling his lender she's doing so.
Leslie has applied for a loan modification. As part of the process, her lender will likely ______.
Perform a title search
Violet purchased a house from Nick, and assumed the existing loan. Nick wants to make sure he isn't liable if Violet ever defaults. What can he do to remove his name from the loan agreement?
Request a novation
When a buyer takes over payments on a loan without telling the lender, this is called a purchase ______.
Subject to existing financing
A homeowner was having financial trouble and was worried about having enough money to pay the mortgage. Instead of falling behind, the homeowner met with a representative from the mortgage company servicing the loan. As a result, the mortgage payments are lower, and the homeowner is no longer at risk of missing a payment. Which one of the following options could be a reason the payments are now lower?
The lender modified the homeowner's loan terms.
Ronald is having his existing loan modified. During the application process, why will Ronald's lender perform a title search on his property?
The lender wants to ensure that an existing lien won't take priority over the modified loan.
Which one of the following statements is true for a sale that's subject to an existing mortgage lien?
The seller's credit score may improve although he's not making any mortgage payments.
