Finance 5-7

A REIT must be owned by at least...?

100 investors

In order for a buyer to take over a seller's existing loan on the property, the loan must contain a/an...?

Assumption clause

Andrew obtained a loan from a local bank to purchase a new house. Under the deed of trust system, Andrew's bank is the...?

Beneficiary

The lender on the security of a note and deed of trust is known as the...?

Beneficiary

The lender on the security of a note and deed of trust.

Beneficiary

A REIT is managed by a...?

Board of Directors

A debt instrument that represents debt.

Bond

Which of the following are primarily considered interim loans...?

Construction loans Home improvement loans Manufactured housing loans

This is a legal document by which a borrower pledges certain real property or collateral as guarantee for the repayment of a loan...?

Deed of trust

An acceleration clause granting the lender the right to demand full payment of the mortgage upon a sale of the property.

Due on Sale Clause

Exists when a landowner has no access to roads and is landlocked.

Easement by Necessity

An unlawful intrusion onto another's adjacent property by improvements to real property is known as a/an...?

Encroachment

Absolute ownership of real property; a person has this type of estate where the person is entitled to the entire property with unconditional power of disposition during the person's life and descending to the person's heirs or distributees.

Fee Simple Estate

Which of the following refers to an absolute ownership of real property...?

Fee Simple Estate

A lien on all the property of a debtor.

General Lien

The percentage of a sum of money charged for its use. Rent or charge paid for use of money, expressed as a percentage per month or year of the sum borrowed.

Interest Rate

A lien imposed against property without consent of an owner (ex: taxes, special assessments, federal income tax liens, etc..).

Involuntary Lien

A trust that cannot be modified or terminated without the permission of the beneficiary.

Irrevocable Trust

A trust that cannot be modified or terminated without the permission of the beneficiary is known as a/an...?

Irrevocable trust

A contract for deed is also known as a...?

Land contract

A freehold estate created for the duration of the life or lives of certain named persons; a non-inheritable estate.

Life Estate

Which of the following is a freehold estate created for the duration of the life or lives of certain named persons...?

Life Estate

A mortgage REIT primarily earns their income from which of the following...?

Mortgage interest Fees associated with originating mortgages Selling mortgages

This is a legal claim against a mortgaged property, which must be paid when the property is sold...?

Mortgage lien

Which of the following liens often takes the highest priority...?

Mortgage lien

Credit unions were created under the...?

NCUA

The charge payable to a lender by a borrower under the terms of the loan agreement if the borrower pays off the outstanding principal balance of the loan prior to its maturity.

Prepayment Penalty

The charge payable to a lender by a borrower under the terms of the loan agreement if the borrower pays off the outstanding principal balance of the loan prior to its maturity is known as a...?

Prepayment penalty

Following a loan commitment from the lender, the borrower signs a note, promising to repay the loan under stipulated terms. The promissory note establishes personal liability for its payment. The evidence of the debt.

Promissory Note

Which of the following establishes personal liability for the payment of a debt...?

Promissory note

A business trust which deals principally with interest in land, generally organized to conform to the IRS is known as a...?

REIT

A business trust which deals principally with interest in land, generally organized to conform to the Internal Revenue Code.

Real Estate Investment Trust (REIT)

The standard provisions of a mortgage includes which of the following...?

Recording information Note of attachment Granting clause

A stipulation that upon the payment of a specific sum of money to the holder of a trust deed or mortgage, the lien of the instrument as to a specifically described lot or area shall be removed from the blanket lien on the whole area involved.

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 of the instrument as to a specifically described lot or area shall be removed from the blanket lien on the whole area involved...?

Release clause

A trust which can be altered or canceled dependent on the grantor.

Revocable Trust

A trust which can be altered or canceled dependent on the grantor is known as a/an...?

Revocable trust

Junior financing loans are also referred to as a...?

Second mortgage

A home equity line of credit is typically ..............to a first mortgage?

Subordinate

To make subject to, junior or inferior to.

Subordinate

A mortgage broker does NOT service loans...?

T (True)

A mortgage is a secured note...?

T (True)

Subordinate loans are riskier than first mortgages...?

T (True)

Which of the following liens takes top priority over other liens...?

Tax lien

One who holds property in trust for another to secure the performance of an obligation. Third party under a deed of trust.

Trustee

The third party under a deed of trust is known as a...?

Trustee

In a deed of trust, the buyer serves as the...?

Trustor

Mark recently obtained a loan from a local bank to purchase a new house. Under the deed of trust system, Mark is the...?

Trustor

One who borrows money from a trust deed lender, then deeds the real property securing the loan to a trustee to be held as security until trustor has performed the obligation to the lender under terms of a deed of trust.

Trustor

Credit card debt is considered...?

Unsecured debt

A purchaser, buyer.

Vendee

The buyer is also known as the...?

Vendee

A seller

Vendor

REITs were legally allowed as of what year...?

1960

Credit unions were created in what year...?

1970

A REIT must be structured as which of the following...?

Corporation Association Trust

A legal document by which a borrower pledges certain real property or collateral as guarantee for the repayment of a loan. It differs from the mortgage in a number of important respects. For example, instead of their being two parties to the transaction there are three. There is the borrower who signs the trust deed and who is called the trustor. There is the third, neutral party, to whom trustor deeds the property as security for the payment of the debt, who is called the trustee. And, finally, there is the lender who is called the beneficiary, the one who benefits from the pledge agreement in that in the event of a default the trustee can sell the property and transfer the money obtained at the sale to lender as payment of the debt.

Deed of Trust

A REIT may consist of which of the following...?

Equity REIT Mortgage REIT Hybrid REIT

A lien imposed against property without consent of an owner is known as a/an...?

Involuntary lien

A legal claim on all of the property of a judgment debtor which enables the judgment creditor to have the property sold for payment of the amount of the judgment.

Judgment Lien

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.

Land Contract

Non-freehold estate; of limited duration, providing the right of possession and control but not title.

Leasehold Estate

Which of the following estate offers the right of possession and control, but not title...?

Leasehold Estate

Which of the following is a non-freehold estate...?

Leasehold Estate

Pension funds typically purchase which of the following...?

Mortgage backed securities Corporate stocks Government securities

Which of the following works for a bank and originates loans...?

Mortgage banker

Which of the following earns a placement fee...?

Mortgage broker

A loan provided by the seller of a property or business to the purchaser.

Seller Financing

A loan provided by the seller of a property or business to the purchaser is known as...?

Seller financing

A mortgage banker originates and ...........loans?

Services

A lien that attaches to one specific property only.

Specific Lien

A mortgage lien is an example of a...?

Specific lien

The seller is also known as the...?

Vendor

Any lien placed on property with consent of, or as a result of, the voluntary act of the owner.

Voluntary Lien

Any lien placed on property with consent of, or as a result of, the voluntary act of the owner, is known as a/an...?

Voluntary lien

How many parties are included in a deed of trust...?

3

An acceleration clause granting the lender the right to demand full payment of the mortgage upon a sale of the property is known as a...?

Due on sale clause

A right, privilege or interest limited to a specific purpose which one party has in the land of another is known as a/an...?

Easement

A right, privilege or interest limited to a specific purpose which one party has in the land of another.

Easement

A promissory note includes which of the following...?

Effective date of contract List of collateral Amount of debt

A lien on all the property of a debtor is known as a...?

General lien

A loan in which the borrower uses the equity in their home as collateral.

Home Equity Loan

A broker who arranges a mortgage loan between a lender and a borrower for a fee.

Mortgage Broker

An unlawful intrusion onto another's adjacent property by improvements to real property (ex: a swimming pool built across a property line).

Encroachment

According to lien theory, the lender retains equitable rights to the property, while the borrower retains...?

Legal rights

An instrument recognized by law by which property is hypothecated to secure the payment of a debt or obligation is known as a...?

Mortgage

This type of REIT purchases loans...?

Mortgage REIT

A right or interest in a property that is used by someone other than the owner is known as a/an...?

Encumbrance

A right or interest in a property that is used by someone other than the owner.

Encumbrance

The value of an asset minus the debt equals the...?

Equity

A form of encumbrance which usually makes specific property security for the payment of a debt or discharge of an obligation (ex: judgments, taxes, mortgages, deeds of trust, etc..).

Lien

A legal document by which a borrower pledges certain real property or collateral as guarantee for the repayment of a loan is known as a/an...?

Deed of trust

The value of an asset minus the debt.

Equity

Which of the following REITs directly invests in properties and earns income from rents and sales...?

Equity REIT

A loan in which the borrower uses the equity in their home as collateral is known as a...?

Home equity loan

This is a form of encumbrance which usually makes specific property security for the payment of a debt or discharge of an obligation...?

Lien

An instrument recognized by law by which property is hypothecated to secure the payment of a debt or obligation; a procedure for foreclosure in event of default is established by statute.

Mortgage

A legal claim against a mortgaged property, which must be paid when the property is sold.

Mortgage Lien

A Hybrid RETI combines the investment strategies of both equity REITs and...?

Mortgage REITs