Quiz 8

13. The trustor is also known as the: a. escrow. b. third party. c. borrower. d. Iender.

c (p.232)

18. With what type of clause does the entire balance of the loan become due and payable when an owner is alienating, transferring, or conveying a property? a. Alienation clause b. Conveyance clause c. Transfer clause d. None of the above

a (p.222)

5. A clause in a financial instrument that allows a lender to demand immediate payment of the entire note balance is known as a(n): a. acceleration clause. b. damage clause. c. assumption clause. d. demand clause.

a (p.222)

8. What provision in an instrument of finance would permit a change in the priority of liens on a property? a. Subordination clause b. Acceleration clause c. Alienation clause d. MPR provision

a (p.222)

16. Impound accounts are NOT used to pay: a. interest. b. property taxes. c. fire insurance. d. all of the above.

a (p.223)

17. The nominal interest rate is: a. stated in the note. b. compounded daily. c. the current interest rate. d. the effective interest rate.

a (p.223)

10. What type of fixed interest loan has payments that start out lower and gradually increase? a. Graduated payment mortgage b. Adjustable rate mortgage c. Fixed rate mortgage d. Reverse annuity mortgage

a (p.227)

20. A lender charges an origination fee, which includes points. One "point" is equal to: a. 1% of the loan amount. b. .01% of the loan amount. c. 10% of the loan amount. d. 100% of the loan amount.

a (p.227)

6. What do we call a borrower who secures a loan through a trust deed? a. Trustor b. Trustee c. Beneficiary d. Holder in due course

a (p.232)

9. Which of the following is NOT a party to a trust deed? a. Grantor b. Beneficiary c. Trustee d. Trustor

a (p.232)

14. The trustee issues a reconveyance deed when the promissory note is: a. paid in full. b. in default. c. recorded. d. expired.

a (p.235)

4. A person who takes a negotiable instrument from another with no knowledge of defect is called a(n): a. assignee. b. attorney-in-fact. c. holder in due course. d. Iimited note holder.

c (p.222)

11. Should the trustor default, the trustee may have to sell the property for the: a. trustor. b. trustee. c. beneficiary. d. title insurance company.

c (p.232)

12. Another term for the trustee is: a. borrower. b. lender. c. third party. d. escrow company.

c (p.232)

7. What document does a trustee record after being notified by the lender of the trustor's nonpayment? a. Request for Notice b. Notice of Foreclosure c. Notice of Default d. Notice of Deficiency

c (p.236)

1. The practice of purchasing real estate using a small amount of your own money and a large portion of borrowed funds is known as: a. hypothecation. b. Ieverage. c. amortization. d. alienation.

b (p.217)

2. The basic instrument used to evidence an obligation or debt is a: a. trust deed. b. promissory note. c. Iand contract. d. mortgage.

b (p.219)

15. Which of the following is FALSE concerning the APR? a. It is expressed as an annual rate. b. It is expressed as a weekly rate. c. It is expressed as a percentage rate. d. It includes all credit costs.

b (p.247)

19. The 1% loan fee on FHA loans is usually paid by the: a. lender. b. broker. c. buyer. d. seller.

d (p.228)

3. Which of the following liens are NOT eliminated by a foreclosure sale? a. Federal tax liens b. State, county, or city assessments c. State, county or city taxes d. All of the above

d (p.240)