Texas Law of Contracts - Chapter 8
Promissory note
A borrower's personal promise to pay a debt according to the agreed terms is known as the...? Promissory note Mortgage Deed of trust All of the above
Land contract
A contract used in a sale of real property whereby the seller retains title to the property until all or a prescribed part of the purchase price has been paid is referred to as a...? Land contract Seller financing contract Listing contract Mortgage
Deed-in-lieu of foreclosure
A deed to real property accepted by a lender from a defaulting borrower to avoid the necessity of foreclosure proceedings by the lender is known as a...? Quitclaim deed Deed of trust Deed-in-lieu of foreclosure Warranty deed
Deed of trust
A legal document by which a borrower pledges certain real property or collateral as guarantee for the repayment of a loan is referred to as a...? Title Survey Deed of trust Warranty deed
Home equity loan
A loan against the equity in a home is referred to as a...? Purchase money mortgage Home equity loan FHA-insured loan Unconventional loan
A lien on the property
A mortgage creates which of the following...? An easement on the property A cloud on title A lien on the property All of the above
Purchase Money Mortgage
A mortgage given by a buyer to a seller to secure payment of all or part of the purchase price is known as a...? Conforming Mortgage Purchase Money Mortgage Unconventional Mortgage Reverse Annuity Mortgage
FHA-insured loan
A mortgage loan in which payments are insured by the Federal Housing Administration is known as a...? Conventional loan Non-conforming loan FHA-insured loan Straight loan
Conventional loan
A mortgage securing a loan made by investors without governmental underwriting is referred to as a/an...? Conventional loan Unconventional loan FHA loan Home equity loan
Lender
A mortgagee is typically the...? Lender Borrower Buyer Seller
Borrower
A mortgagor is also referred to as a...? Creditor Borrower Lender Seller
All of the above
A non-judicial foreclosure proceeding may occur with which of the following...? Seller financing Deed of trust financing Land contract All of the above
Foreclosure
A procedure whereby property pledged as security for a debt is sold to pay the debt in event of default in payments or terms is known as...? Alienation Condemnation Eminent domain Foreclosure
Assignment
A transfer by a person of that person's rights under a contract is known as a...? Alienation Acceleration Release Assignment
Straight loan
An interest only loan is also known as a/an...? Adjustable rate loan Straight loan Balloon loan Fixed rate loan
Redemption
Buying back one's property after a judicial sale is known as...? Rescission Redemption Short sale Foreclosure
Subsidy buydown
Funds provided usually by the builder or seller to temporarily reduce the borrower's monthly principal and interest payment is known as a...? Credit Voucher Subsidy buydown Reduction
12
How many geographical districts are included in the federal reserve system...? 12 18 21 50
Non-judicial foreclosure
In a Deed of Trust State, the lender can obtain the property through which of the following means...? Non-judicial foreclosure Short sale Judicial foreclosure Modified foreclosure
Judicial foreclosure
In a mortgage State, the lender must go through ......................... in order to obtain the property? Non-judicial foreclosure Short sale Judicial foreclosure Modified foreclosure
The borrower
Judicial foreclosure favors which of the following...? The Trustee The lender The broker The borrower
Conforming loans
Loans processed on uniform loan forms according to FNMA/FHLMC guidelines are referred to as...? Conforming loans Non-conforming loans Unconventional loans Equity loans
All of the above
Mark recently obtained a mortgage and signed a promissory note with the lender. Which of the following is most likely included in Mark's promissory note...? The time and method of payment of the debt The interest rate of the loan All of the above The amount of the debt
The lender
Non-judicial foreclosure favors which of the following...? The lender The broker The Trustee The borrower
Mortgagee
One to whom a mortgagor gives a mortgage to secure a loan or performance of an obligation is referred to as a...? Grantor Grantee Mortgagor Mortgagee
Trustor
One who borrows money from a trust deed lender is referred to as the...? Beneficiary Grantor Trustor Trustee
Mortgagor
One who gives a mortgage on his or her property to secure a loan or assure performance of an obligation is referred to as a...? Mortgagor Mortgagee Grantor Grantee
Primary mortgage market
The activity of lenders making mortgage loans to individual borrowers is known as the...? Federal mortgage market Primary mortgage market Secondary mortgage market Government mortgage market
Principle
The amount of money borrowed, or the amount of the loan is known as the...? Balance Interest Mortgage Principle
Secondary mortgage market
The buying and selling of existing deeds of trust and promissory notes occurs in the...? Federal mortgage market Primary mortgage market Secondary mortgage market Government mortgage market
Federal Reserve System
The federal banking system of the United States is known as the...? Nation Reserve System United Reserve System Federal Reserve System American Reserve System
Equal Credit Opportunity Act
This Act prohibits discrimination in granting or arraigning credit on the basis of race, color, religion, national origin, sex, marital status, or age...? ADA Equal Credit Opportunity Act TILA Equal Opportunity Housing Act
VA loan
This is a loan made to qualified veterans for the purchase of real property wherein the Department of Veteran's Affairs guarantees the lender payment of the mortgage...? FHA loan Conventional loan Straight loan VA loan
Negative amortization
This occurs when monthly installment payments are insufficient to pay the interest accruing on the principal balance, so that the unpaid interest must be added to the principal due...? Deflation Amortization Negative amortization Inflation
Alienation clause
This refers to a clause in a contract giving the lender certain rights in the event of a sale or other transfer of mortgaged property...? Assumption clause Alienation clause Release clause Reserve clause
Acceleration clause
This refers to a condition in a real estate financing instrument giving the lender the power to declare all sums owed the lender immediately due and payable upon the happening of an event...? Acceleration clause Alienation clause Release clause Assignment clause
Balloon mortgage
This refers to a mortgage in which the scheduled payment will not amortize the loan over the mortgage term; therefore, for the debt to be fully satisfied, a final payment larger than the uniform payments is required...? Balloon mortgage Straight mortgage Adjustable rate mortgage Fixed term mortgage
Release clause
This refers to a stipulation that upon the payment of a specific sum of money to the holder of a trust deed or mortgage, the lien on the property shall be removed...? Alienation clause Acceleration clause Release clause Assumption clause
Mortgage
This refers to an instrument recognized by law by which property is hypothecated to secure the payment of a debt or obligation...? Deed Mortgage Title Bill of Sale
Usury
This refers to an interest rate on a loan that is greater than that permitted by law...? Novation Inflation Marker Usury
Beneficiary
When a deed of trust is used, the lender is referred to as the...? Beneficiary Trustor Trustee Grantor
Trustee
When a deed of trust is used, who serves as a neutral third party to the borrower and lender...? Beneficiary Grantor Trustor Trustee
At the sale of the property
When is an acceleration clause typically executed...? At the sale of the property When the property is taxed When the property is leased At the assignment of mortgage
Interest
Which of the following is a charge for the use of money...? Principal Interest Tax Insurance
PITI
Which of the following is an acronym used to describe the components of a mortgage payment...? CADDL PETE OLD CAR PITI
Refusing to lend to a minor
Which of the following is not considered a violation of the ECOA...? Refusing to lend to an Asian-American Refusing to lend to a Catholic Refusing to lend to a minor Refusing to lend to a married couple
All of the above
Which of the following operates in the secondary mortgage market...? Freddie Mac Fannie Mae Ginnie Mae All of the above
The buyer and seller
Which of the following parties are included in a land contract...? The seller and beneficiary The buyer and seller The buyer and bank The seller and bank
RESPA
Which of the following refers to a federal law requiring the disclosure to borrowers of settlement (closing) procedures and costs by means of a pamphlet and forms prescribed by HUD...? ADA PITI TILA RESPA
Seller financing
Which of the following will most likely warrant the highest interest rate...? Seller financing Conventional mortgage Unconventional mortgage FHA loan
