chapter 9 mortgage and note quiz

35) when the amount received from a foreclosure sale is insufficient to pay off the mortgage loan and the other expenses of the sale, the lender May sometimes secure an? A. Deficiency judgment. B. Mechanic's lien. C. Estoppel lien. D. Statutory lien.

A lender May request a deficiency judgement against any other property of the mortgagor as a means of recovering the amount due on a loan

33) the period of Equitable Redemption given to a borrower? A. begins when the loan is made B. ends when the property is sold at foreclosure. C. ends within a year after the sale. D. is useful during the life of the loan

Equitable Redemption begins when the loan is in default, and ends when the property is sold at a foreclosure sale

18) if all or part of a mortgaged property is taken by eminent domain, the condemnation Clause requires that? A. Any money received be used to reduce the balance owed on the Note. B. The entire loan balance to be paid in full. C. The borrower is relieved of further financial responsibility. D. Government must pay the note in full before condemnation.

The Condemnation clause and a mortgage requires that any money received from a sale under eminent domain be used to reduce the balance owed on the Note.

26) a mortgage which is lower and lien property than another mortgage on the same property is known as a? A. First mortgage. B. Junior mortgage. C. Senior mortgage. D. Promissory note.

a Junior mortgage is any mortgage that is lower in priority than the first or senior mortgage on a property.

29) a real estate borrower who is behind in his loan payment will first take which of the following steps? A. Sell the property before the next loan payment is due. B. Wait for the lender to accelerate the loan. C. Wait for the statutory Redemption period. D. Meet with the lender as soon as possible.

a borrower who is behind in mortgage payments should first meet with the lender as soon as possible.

42) mortgages which are secured by personal property. A. Are known as chattel mortgages. B. must be foreclosed by judicial foreclosure. C. Are called first mortgages. D. Are not allowed in most States.

a mortgage secured by personal property is a chattel mortgage. Judicial foreclosure is not required.

32) a mortgagee informs the public of a pending foreclosure auction by recording a note of? A. Acceleration. B. Lis pendens. C. estoppel. D. Subordination.

a notice of Lis Pendens is a public notice of pending legal action, filed and the public records of the jurisdiction of the mortgage property.

20) L hypothecated the title to two equally valued properties as collateral for a $50,000 loan. When he repaid $25,000 of the principal amount, one of the properties was removed from the mortgage obligation by means of a? A. Mortgage satisfaction. B. partial release. C. defeasance. D. release of mortgage

a partial release is used to release one or more properties from the obligations of a blanket mortgage.

21) E so his home to W, subject to an existing mortgage loan. W later defaulted on the loan. Which of the following statements is correct? A. The lender has recourse to the assets of w for the balance due. B. W is jointly responsible for the loan balance. C. the mortgagee can look to E for the loan balance. D. E was relieved of liability for the loan balance when W except title subject to the existing loan.

a person who takes property "subject to" is not personally liable to the lender or the seller.

1) evidence of the amount and terms of a borrower's debt to A lender is provided by the means of a? A. Mortgage. B. Promissory note. C. Deed of trust. D. first mortgage

a promissory note is evidence of the borrower's debt to the lender. The mortgage provides collateral for the debt.

10) regarding the use of a mortgage, which of the following statements is correct? A. A mortgage is evidence of a borrower's debt to A lender. D. a mortgage hypothecreate property as collateral for the loan. C. a mortgage must reference an earnest money agreement when serving as collateral for a loan. D. an owner may not occupy mortgage property

a promissory note is evidence of the borrower's debt, and a mortgage hypothecates property as collateral for a loan

4) a promissory note which fails to state that it is to be secured by a mortgage or deed of trust is? A. A personal obligation of the borrower. B. a secured obligation of the borrower. C. unenforceable. D. May not be assigned or sold

a promissory note which does not specify that it is to be secured by a mortgage or deed of trust is both a personal obligation and an unsecured obligation of the borrower

23) when a loan is assumed, the? A. Seller can be relieved of liability by Novation. B. Seller need not to verify the loan balance with the lender. C. Seller can avoid liability by selling subject to the mortgage D. buyer can avoid liability through Novation

a seller can be relieved of liability for an assumed loan by the Novation, the substitution of the purchaser for the seller as the mortgage or under the original note and mortgage

38) bidders pay more at a foreclosure sale if the property is located in a state which? A. Has a shortly statutory Redemption period. B. Has a lengthy statutory Redemption period. C. Permits the mortgagee to occupy the property during the statutory Redemption period. D. gives title and possession to the highest bidder immediately following the Foreclosure auction.

a successful bidder who receives title and possession immediately following the Foreclosure sale will tend to be willing to pay more for the property than in circumstances where the title and possession will be delayed

41) by voluntarily giving the a deed in lieu oh foreclosure, a delinquent borrower? A. can avoid foreclosure proceedings. B. Is still responsible for possible deficiency judgment. C. Cannot avoid foreclosure proceedings. D. Will have to make several additional payments as a prepayment penalty.

a voluntary deed in lieu of foreclosure avoid foreclosure proceedings and possible deficiency judgment.

17) the clause which gives the lender the right to call in the note if the mortgaged property is sold or otherwise conveyed by the borrower is known as the? A. Acceleration clause. B. alienation clause. C. defesance clause. D. Foreclosure clause

an alienation clause permits the lender to demand immediate replacement of the note if the mortgage property is old or otherwise conveyed

24) when a lender wants to sell a loan to another investor, the borrower May sometimes be asked to verify the loan balance by means of? A. A certificate of Novation. B. An estoppel certificate. C. a certificate of reduction. D. A subordination certificate

an estoppel certificate is used to secure verification from the borrower of the outstanding balance on a loan when the loan is being sold by a mortgagee or note holder.

43) when an installment contract to buy real estate goes into default, the? A. vendee can resend the contract. B. contract can be judicially foreclose. C. vindor will have little legal bias to respossess the property D. vendee may be liable for a possible deficiency judgment.

an installment contract in default maybe to judicially foreclosed. the vendee may not resend the contract.

9) normally, which other instrument associated with a mortgage loan is recorded in the public records? A. Promissory note. B. Mortgage. C. Purchase contract. D. Bill of sale.

customarily, a mortgage is recorded but a promissory note is not.

31) in a foreclosure auction, the lender ask the court for a judgement directing that the? A. mortgageor's interest in the property be cut off. B. probably be sold at public auction. C. lenders claim to be paid from the sale proceeds. D. all the above be done.

d

34) when a real estate mortgage is foreclosed, unpaid real estate tax liens against the property? A. are cut off. B. Become a lien on the personal property of the delinquents mortgagor. C. remain in force against the property. D. are added to the purchase price at the Foreclosure sale

foreclosure of a mortgage does not eliminate real estate tax liens. They remain in force against the property.

11) a Bowers property serves as collateral while the borrowers retains the right of possession and uses of it by the process of? A. alienation. B. hypothecation. C. amortization D. acceleration

hypothecation is the process by which a borrower's property serves as collateral for a debt without the borrowers giving up possession of the property.

2) to be accepted as valid evidence of a borrower's debt, a note must do all of the following except? A. Be in writing, between parties having contractual capacity. B. State the borrowers promise to repay a certain sum of money. C. Show the terms of payment. D. Be recorded in the public records

it is not necessary for a note to be recorded in the public records in order to be valid evidence of a borrower's debt.

40) judicial foreclosure May sometimes be advocated by? A. Invoking the acceleration clause. B. The trustee who acts as an intermediary between the beneficiary and trustor C. Power of sale and entry and possession. D. Beneficiary petitioning for a reconveyance soup

judicial foreclosure May sometimes be avoided by power of sale or by entry and possession.

28) most mortgage foreclosures are the result of the Borrowers? A. Violation of mortgage Covenants. B. Failure to make loan payments on time. C. Non-compliances with and it's the terms of the mortgage agreement. D. violation of the alienation clause

most mortgage foreclosures are the result of borrowers failure to make loan payments on time.

30) given a choice of foreclosure methods, in a simple and straightforward case, A lender will usually prefer which method of loan foreclosure? A. Judicial. B. Non-judicial. C. partitions suit D. reconveyance suit

non-judicial foreclosure is normally less expensive and faster than judicial foreclosure, so will usually be the lenders preference when a choice is permitted.

3) in order to be enforceable, a promissory note must be signed by the? A. Borrowers. B. Lender. C. Agent. D. Trustee.

only the borrower needs sign a note for it to be enforceable.

15) all the following covenants will appear in a mortgage except? A. To pay taxes and insurance. B. Against removal. C. against encumbrances. D. Of good repair.

the Covenant against encumbrances appears in a general warranty deed, not in a mortgage.

8) should a borrowor fail to make payments when due, the lender May demand immediate payment of the entire balance under the terms of the? A. Prepayment clause. B. defeasance clause. C. accelerated clause. D. Hypothecation clause

the acceleration clause in a note permits the lender to demand immediate payment of the entire balance due.

7) under a note secured by a mortgage, the obligor is the? A. lender. B. Bauer. C. Note holder. D. Mortgagee.

the borrower is the obligor under a note secured by a mortgage. the note is the borrowers obligation

39) a borrower who feels mistreated by the power of sale foreclosure can? A. Obtain a Judicial foreclosure. B. appeal the issue to the courts. C. obtain a judgment. B. obtaining a lean.

the borrower whose loan has been foreclosed by power of sale can appeal the issue to the courts, but not obtain a Judicial foreclosure.

14) a mortgage becomes null and void when the note is paid in full under the terms of the? A. defesance clause. B. prepayment clause. C. Alienation clause. D. Hypothecreation Claus.

the defeasance Clause states that a mortgage becomes null and void when the note is paid in full.

12) under the terms of a mortgage, the mortgagee is the? A. Obligor under the promissory note. B. lender. C. Trustee. D. Marker of the note.

the lender is both the mortgagee under the terms of the mortgage and the obligee under the terms of the promissory note

5) the purpose of putting the location of the execution on a promissory note is to? A. Establish applicable state laws. B. tell the borrower where to send the payments. C. allow the lender to sell the note out of state. D. Create a negotiable instrument

the location of the execution of a note is stated on the Note in order to establish with States law govern the note.

16) N wishes to purchase W's house for $100,000, giving her a $20,000 cash down payment in a note and mortgage for the remaining $80,000. N can expect the hypothecreate with all the following with a mortgage? A. Lot and house. B. House, but not the lot. C. Lot, but not the house. D. N's other real estate holdings

the mortgage will hypothecate the house and lot on which it is located, but not other real estate holdings of the mortgagor

36) the deed given to the purchaser at foreclosure by the sheriff or other officer of the Court usually takes the form of a? A. General warranty deed. B. Quit claim deed. C. Special warranty deed. D. Bargain and sale deed.

the purchaser at foreclosure will usually receive a special warranty deed signed by the officer of the Court who handled the Foreclosure sale

22) who may be held responsible for mortgage loan repayment when a loan is assumed as part of a real estate sale? A. Purchase only. B. Seller only. C. Both the purchaser and the seller. D. Agent, only if there is default

the purchaser is responsible to the seller, and the seller to the lender when a loan is assumed.

19) when the owner paid off his mortgage loan in full, the lender gave him a satisfaction of mortgage document. Should this instrument be recorded in the public records? A. yes, because recordation is required by state law. B. Yes, because the records would otherwise indicate the obligation was still outstanding. C. no, because the mortgage was terminated by the defeasance Clause wants the debt was paid. D. no, because the note was not recorded in the public records

the satisfaction mortgage should be recorded in the public records in order to give public notice that the debt has been satisfied.

37) the period of time set by state law after a foreclosure sale, during which the mortgagor may redeem the property is known as the period of? A. Equitable Redemption. B. Legal Redemption. C. Voluntary Redemption. D. Statutory Redemption.

the statutory Redemption period begins at the time of the Foreclosure sale, and terminates upon expiration of the statutory period in the jurisdiction.

6) the words "or order" in a promissory note makes it? A. Impossible for the lender to transfer the right to collect the note to another party. B. A negotiable instrument. C. A debt which can be assumed by another party. D. Difficult for the lender to foreclose.

the words or order in a promissory note makes it a negotiable instrument, thus giving the lender the right to transfer collection rights to another party.

25) the lien property of mortgages is determined by the? A. Date of the mortgage instrument. B. Date of the promissory note. C. Language of the mortgage instrument. D. Order of recordation

under the so-called racial statutes, the priority of a mortgage lien is determined by the order of recordation

13) in the states which subscribe to the title theory of mortgages, the? A. Mortgage Deeds title of the mortgaged property to the lender. B. Borrower forfeits the rights of possession and use of the property. C. Mortgage is considered a lien on the property. D. Title is transferred to the lender only if the borrower defaults

under the title theory of mortgages, the mortgage deed titles to the property to the lender but allows the borrower the use of the property.