Chapter 09. Real Estate Finance

A clause in a financial instrument that allows a lender to demand immediate payment of the entire note balance is known as a(n):

acceleration clause.

Which of the following liens are NOT eliminated by a foreclosure sale?

federal tax liens state, county, or city assessments state, county, or city taxes

A person who takes a negotiable instrument from another with no knowledge of defect is called a(n):

holder in due course.

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?

Alienation clause

What document does a trustee record after being notified by the lender of the trustor's nonpayment?

Notice of Default

What provision in an instrument of finance would permit a change in the priority of liens on a property?

Subordination clause

Should the trustor default, the trustee may have to sell the property for the:

beneficiary.

The trustor is also known as the:

borrower.

The 1% loan fee on FHA loans is usually paid by the:

seller.

A lender charges an origination fee, which includes points. One "point" is equal to:

1% of the loan amount

What type of loan allows the interest rate to "fluctuate" depending on money market conditions?

Adjustable rate mortgage

Which of the following is NOT a party to a trust deed?

Grantor

Which of the following is FALSE concerning the Annual Percentage Rate (APR)?

It is expressed as a weekly rate.

What do we call a borrower who secures a loan through a trust deed?

Trustor

Moneys collected in advance from borrowers to assure the payment of recurring costs are known as:

impound accounts.

The practice of purchasing real estate using a small amount of your own money and a large portion of borrowed funds is knowns as:

leverage.

The trustee issues a "reconveyance deed" when the promissory note is:

paid in full.

The basic instrument used to evidence an obligation or debt is a:

promissory note.

The "nominal interest rate" is:

stated in the note

Another term for the trustee is:

third party