Unit 5 Quiz- Chapters 15 & 16

a deed in lieu of foreclosure

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

Lender

A borrower has secured an FHA insured loan. This means that the FHA will insure which of the following against a possible loss?

A partially amortized loan

A borrower obtained a $7,000 second mortgage loan for five years at 6 percent interest per annum. Monthly payments were $50. The final payment included the remaining outstanding principal balance. What type of loan is this?

Blanket mortgage

A developer had a mortgage loan on his entire housing development. When he sold a lot to a buyer, he was able to deliver title to that lot free of the mortgage lien by obtaining a partial release. What type of loan did the developer have?

title insurance.

A lender may protect its interest in a mortgage loan by obtaining additional security from

gives the mortgage

A mortgagor is the one who

personally responsible for paying the principal balance.

A person who assumes an existing mortgage loan is

an amortized loan.

A real estate loan payable in periodic installments that are sufficient to pay the principal in full during the term of the loan is called

A reverse mortgage

A seventy-year-old homeowner has owned her house for over 50 years. It has fallen into disrepair but, because she lives on a fixed income, she does not have the money to make the needed repairs. She has a considerable amount of equity in the house. What type of loan would probably best suit her needs?

Any qualified lending institution

An FHA-insured mortgage loan would MOST LIKELY be obtained from which of the following?

sale of real property under an option agreement.

An articles of agreement for deed (land contract) provides for the

satisfaction of mortgage.

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

purchase money mortgage

An extension of credit from a seller to a buyer to allow the buyer to complete the transaction is called a

A mortgage broker generally offers which of the following services?

Bringing the borrower and the lender together

usury

Charging more interest than is legally allowed is called

purchasing existing mortgage loans.

Fannie Mae and Ginnie Mae have the common purpose of

Judicial foreclosure

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

A commercial lender

From which of the following would a borrower most likely obtain a residential real estate mortgage loan?

Fannie Mae buys FHA loans

How is Fannie Mae involved with FHA loans?

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 for the points at closing?

a deficiency judgment.

If a property sold as a mortgage foreclosure does not sell for an amount sufficient to satisfy the outstanding mortgage debt, the mortgagor may be responsible for

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

Intermediate

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

pay into an impound (escrow) account.

Mortgage lenders want assurance that future real estate taxes will be paid. The most common way to do this is to require the borrower 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 by a new purchaser is a

a loan origination fee.

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

Sale and leaseback

The grantor becomes the lessee and the grantee becomes the lessor under which financing arrangement?

equity.

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

cap.

The maximum amount for payments in an adjustable-rate mortgage is set by the

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

equitable title.

The seller agrees to sell the house to the buyer for $200,000. The buyer was unable to qualify for a mortgage loan 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

package mortgage.

The type of mortgage loan that uses both real and personal property as security is a

open-end mortgage.

The type of real estate loan that allows the lender to increase the outstanding balance of a loan up to the original sum in the note while advancing additional funds is the

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

There is no ceiling

mortgagor

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

Acceleration clause

What is the clause in a note, mortgage or trust deed that permits a lender to declare the entire unpaid sum due should the borrower default?

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

The entire principal is due at the end of the term.

Which of the following is true about a term mortgage?

A buyer does not have to be a veteran to assume a VA loan.

Which of the following statements is TRUE?

Assumable mortgages

Which of the following, standing alone, would not trigger additional advertising rules by the Truth in Lending Act?

One percent prepayment penalty

Which would NOT be associated with a VA loan?

In a sale-and-leaseback arrangement the

buyer becomes the lessor.

A promissory note

is the primary evidence of a debt.

In a graduated payment loan

mortgage payments increase