Chapter 15 Quiz

a deed in lieu of foreclosure

A "friendly foreclosure" enables a mortagor to prevent the mortgagee from taking the property by statutory means. This can be accomplished by

obligation of the borrower to repay the funds

A deed of trust differs from a mortgage in all of the following EXCEPT the

satisfaction of mortgage

A homeowner has just made the final payment on her home mortgage to her lender. There will still be a lien on her property until the lender records a

conveyance of legal title at a future date

A land contract provides for the

simple interest

A man just purhcased his first home with a fixed-rate loan. The interest he will pay over the life of the loan is

$200

A mortgagee who fails to deliver a release within one month after full payment and satisfaction will be liable to pay the mortgagor or grantor a penalty of

gives the morgage

A mortgagor is the one who

personally responsible for paying the principal balance

A person who assumes an existing mortgage loan is

is the primary evidence of a debt

A promissory note

subordination agreement

An existing mortgage loan can have its lien priority lowered through the use of a

usury

Charging more interest than is legally allowed is called

Judicial foreclosure

For purposes of mortgage foreclosures, Illinois is classified as what type of state?

Strict

If a borrower defaults and the court simply awards the lender full legal title, what kind of foreclosure has taken place?

$6,000

If a buyer of an $185,000 home obtains a $150,000 mortgage with 4 points, how much will the lender charge at closing?

the mortgagor

If the amount realized at a sheriff's sale as part of a mortgage foreclosure is more than the amount of the indebtedness and expenses, then the excess belongs to

9 7/8 percent

If the yield on a 30-year loan is 10 1/4 percent and a mortgage lender charges 3 points, what is the interest rate on the mortgage note?

Intermediate

Illinois is most accurately referred to as what type of mortgage theory state?

8 percent

In Illinois, lenders may not charge a prepayment penalty on a loan secured by real estate if the loan's interest rate is greater than

that was recorded first

In absence of an agreement to the contrary, the mortgage having priority will be the one

pay into an impound account

Mortgage lenders want assurance that future real estate taxes will be paid. The most common way to do this is to require the borrow to

loan-to-value ratio

The amount of a loan expressed as a percentage of the value of the real estate offered as collateral is the

Acceleration

The clause in a deed of trust or mortgage that permits the lender to declare the entire unpaid balance immediately due and payable upon default is what clause?

due-on-sale clause

The clause in a mortgage instrument that would prevent the assumption of the mortgage

defeasance

The clause in a mortgage that BEST describes the requirement of the mortgagee to execute a satisfaction of mortgage when the note has been fully paid is

satisfaction of mortgage

The defeasance clause in a mortgage requires the mortgagee to execute a

a loan origination fee

The finance fee charged by the lender to make the loan is

equity

The interest in a property held by the owner in excess of any liens against it is called

Seek a deficiency judgment

The mortgagee foreclosed on a property after the borrow defaulted on the loan payments. At the foreclosure sale, however, the house sold for only $229,000. The unpaid balance of the loan at the time f the sale was $240,000. What must the lender do to recover the $11,000 the borrower still owes?

hypothecation

The pledging of property as security for payment of a loan is called

provide security for the loan

The purpose of a mortgage is to

redemption

The right a mortgagor has to regain the property by paying the debt after a foreclosure sale is called

equitable title

The seller agrees to sell the house to the buyer for $200,000. The buyer was unable to qualify for a mortgage lon for this amount so the seller and buyer enter into a contract for deed. The interest the buyer has in the property under a contract for deed is

mortgagor

Under the lien theory, the equitable title to the property is held by the

There is no ceiling

What is the Illinois statutory usury ceiling for real estate financing?

a satisfaction of mortgage is recorded

When a mortgage loan has been paid in full, it is important for borrowers to be sure that

is kept by the seller until the purchase price is paid according to the contract

When real estate is sold under an installment land contract and the buyer takes possession of the property, the legal title

Grantor

Which of the following would NOT be associated with a mortgage?

Remainder

Which of the following would NOT be associated with mortgage or deed of trust foreclosure?

The buyer is given possession

Which statement is TRUE about a land contract?