Chapter 15 Exercise

Indicate whether each statement is True or False. 3. Illinois is considered a title theory state.

False

Indicate whether each statement is True or False. 7. Lenders are legally prohibited from selling a note to a third party.

False

Indicate whether each statement is True or False. 8. The basic components on a mortgagor's monthly payment are PITI: principal interest, taxes, and index payment.

False

Indicate whether each statement is True or False. 1. The mortgagee is the lender or creditor who loans money to a mortgagor.

True

Indicate whether each statement is True or False. 10. A short sale is when a sale where the lender agrees to accept less than the amount owed on the property at closing.

True

Indicate whether each statement is True or False. 2. In lien-theory states, the mortgagee does not hold legal title to the encumbered property, but rather just has a lien on the property.

True

Indicate whether each statement is True or False. 4. Hypothecation is when a mortgagor retains possession and control of real estate while the creditor receives an equitable right in the underlying property.

True

Indicate whether each statement is True or False. 5. Lenders may charge prepayment penalties if mortgagors pay more than the minimum monthly payment in order to pay off the loan faster than scheduled.

True

Indicate whether each statement is True or False. 6. If a mortgagor defaults on a loan, the lender can accelerate the loan and declare the entire debt due immediately.

True

Indicate whether each statement is True or False. 9. In a judicial foreclosure state, such as Illinois, a foreclosure lawsuit must be filed in order to foreclose the real estate.

True