Texas Real Estate Finance - Chapter 6

Land contract

A contract for deed is also known as a...? Deed of trust Land contract Deed Mortgage

Subordinate

A home equity line of credit is typically ..............to a first mortgage? Inferior Prime Superior Subordinate

Involuntary lien

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

T (True)

A mortgage is a secured note...? T (True) F (False)

Specific lien

A mortgage lien is an example of a...? Judgement lien Involuntary lien Specific lien General lien

All of the above

A promissory note includes which of the following...? Effective date of contract List of collateral Amount of debt All of the above

Encumbrance

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

Easement

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

Due on sale clause

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 Prepayment clause Subordination clause Release clause

Mortgage

An instrument recognized by law by which property is hypothecated to secure the payment of a debt or obligation is known as a...? Contract for deed Deed Mortgage Promissory note

Encroachment

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

Beneficiary

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 Grantor Trustor Trustee

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...? Judgement lien Involuntary lien Mechanic's lien Voluntary lien

Secured debt

Credit card debt is considered...? Recorded debt Open debt Secured debt Unsecured debt

3

How many parties are included in a deed of trust...? 1 2 3 4

The buyer

If a buyer assumes a seller's existing mortgage, who is responsible for the payments on the mortgage...? The buyer The seller Both the buyer and seller Neither the buyer or seller

Assumption clause

In order for a buyer to take over a seller's existing loan on the property, the loan must contain a/an...? Subordination clause Due on sale clause Release clause Assumption clause

Second mortgage

Junior financing loans are also referred to as a...? Prime mortgage Second mortgage Superior mortgage First mortgage

Trustor

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

T (True)

Subordinate loans are riskier than first mortgages...? T (True) F (False)

Vendee

The buyer is also known as the...? Grantor Trustee Vendee Vendor

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...? Closing fee Release of loan penalty Prepayment penalty Satisfaction fee

Vendor

The seller is also known as the...? Grantee Trustor Vendee Vendor

All of the above

The standard provisions of a mortgage incudes which of the following...? Recording information Note of attachment Granting clause All of the above

Lien

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

Mortgage lien

This is a legal claim against a mortgaged property, which must be paid when the property is sold...? General lien Mechanic's lien Mortgage lien Tax lien

Deed of trust

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 Promissory note Deed Legal note

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...? Due on sale clause Prepayment clause Subordination clause Release clause

Promissory note

Which of the following establishes personal liability for the payment of a debt...? Deed Promissory note Trust Settlement statement

Life Estate

Which of the following is a freehold estate created for the duration of the life or lives of certain named persons...? Leasehold Estate Life Estate Fee Simple Estate All of the above

Leasehold Estate

Which of the following is a non-freehold estate...? Leasehold Estate Life Estate Fee Simple Estate All of the above

Mortgage lien

Which of the following liens often takes the highest priority...? General lien Mechanic's lien Mortgage lien Judgement lien

Fee Simple Estate

Which of the following refers to an absolute ownership of real property...? Leasehold Estate Life Estate Fee Simple Estate All of the above