Classroom Quiz 3 (Finance)(multiple choice)

A mortgagor is the one who a. gives the mortgage b. holds the mortgage c. provides the mortgage funds d. forecloses on the mortgage

a. gives the mortgage

If the amount realized at a mortgage foreclosure auction is more than the amount of the indebtedness and expenses, then the excess belongs to the a. grantor b. beneficiary c. trustee d. county

a. grantor

A lender will take all the following factors into consideration when deciding whether or not to approve a borrower's mortgage loan application EXCEPT a. the marital status of the borrower b. the creditworthiness of the borrower c. the amount of the borrower's income d. the borrower's credit score

a. the marital status of the borrower

Under an installment land contract, the title to the property is held by the a. vendor b. vendee c. trustor d. trustee

a. vendor

If the proceeds from the sale of a foreclosed property are less than the amount required to satisfy the outstanding mortgage loan debt and legal expenses, the grantor may be responsible for a. a default judgement b. a deficiency judgement c. liquidated damages d. punitive damages

b. a deficiency judgement

The Truth-in-Lending Act sets forth requirements regarding real estate loans to individuals for all of the following reasons EXCEPT a. equity lines of credit b. commercial purposes c. additions to residential properties d. installation of a backyard swimming pool

b. commercial purposes

The seller agrees to sell the property to the buyer for $100,000. The buyer is unable to qualify for a mortgage loan for this amount with a traditional lender so the seller and buyer enter into a contract for deed. The interest the buyer has in the property under a contract for deed is a. legal title b. equitable title c. joint title d. reversionary title

b. equitable title

The loan amount expressed as a percentage of the value of the real estate offered as collateral is the a. amortization ratio b. loan-to-value ration c. debt-to-equity ratio d. capitalization rate

b. loan-to-value ratio

Fannie Mae a. originates FHA loans in the primary mortgage market b. purchases FHA loans in the secondary mortgage market c. provides farm loans d. provides insurance for FHA loans

b. purchases FHA loans in the secondary mortgage market

The right a grantor has to regain the property ownership by paying the debt after a foreclosure is called a. acceleration b. redemption c. reversion d. recapture

b. redemption

The Equal Credit Opportunity Act a. is a federal law that regulates real estate agent actions in advertising financing for listings b. requires that a rejected credit applicant be told why credit was denied c. has protected classes that are identical to fair housing laws d. is a state banking law that regulates mortgage lender practices

b. requires that a rejected credit applicant be told why credit was denied

A longer mortgage loan term will a. decrease the number of loans being made b. result in lower monthly mortgage payments c. prevent many individuals from owning homes d. cause interest rates to increase

b. result in lower monthly mortgage payments

Charging more interest than is legally allowed is known as a. escheat b. usury c. a deficiency d. an estoppel

b. usury

The administrative fee charged by the lender to make the loan is a. a loan discount fee b. an advance interest payment c. a loan origination fee d. a mortgage insurance premium

c. a loan origination fee

A borrower obtained a $7,000 second mortgage loan for five years at 6 percent interest per annum. Monthly debt service payments were $50. The final payment included the remaining outstanding principal balance. What type of loan is this? a. a fully amortized loan b. a straight loan c. a partially amortized loan d. an accelerated loan

c. a partially amortized loan

An FHA-insured mortgage loan would be obtained from a. the Federal Housing Administration b. the Department of Housing and Urban Development c. any qualified lending institution d. any qualified insurance institution

c. any qualified lending institution

The federal agency that is tasked with the oversight of the public welfare in connection with lending practices is the a. federal reserve b. housing and urban development agency c. consumer financial protection bureau d. federal trade commission

c. consumer financial protection bureau

A land contract provides for the a. sale of unimproved land only b. sale of real property under and option agreement c. conveyance of legal title at a future date d. immediate transfer of reversionary rights

c. conveyance of legal title at a future date

The pledging of property as security for payment of a loan is a. disintermediation b. equity c. hypothecation d. subordination

c. hypothecation

A promissory note a. may not be executed in connection with a real estate loan b. is an agreement to perform or not perform certain acts c. is the primary evidence of debt d. is a guarantee by a government agency

c. is the primary evidence of debt

Which of the following terms may appear in an advertisement for a real estate loan without triggering Regulation Z full disclosure requirements? a. "$499 monthly payments" b. "only one penny down" c. "8 percent interest rate or lower" d. "assumable mortgages available"

d. "assumable mortgages available"

All of the following statements about short sales are true EXCEPT a. the lienholder cannot be forced to participate in the sale b. the borrower may be taxed on any debt that is forgiven by the lienholder c. the lienholder can file for a deficiency judgement for debt not paid by the sale of the collateral property

d. a sales contract has not been created until the lienholder agrees to the short sale contract terms

The clause in a deed of trust or mortgage that permits the lender to declare the entire unpaid balance immediately due and payable upon default by the borrower is the a. alienation clause b. escalator clause c. forfeiture clause d. acceleration clause

d. acceleration clause

A real estate loan payable in periodic installments that are sufficient to pay the principal in full during the term of the loan is called a. a conventional loan b. a straight loan c. a participation loan d. an amortized loan

d. an amortized loan

An eligible veteran is under contract to purchase a home for $80,000 that he wants to finance with a VA-guaranteed 100 percent loan-to-value loan. Four weeks after contract formation, a certificate of reasonable value (CRV) for $77,000 was issued for the property. In this situation, the veteran may consider any of the following options EXCEPT a. withdrawing from the transaction without penalty b. purchasing the property with an additional $3,000 cash from his own pocket c. negotiating with the seller to reduce the sales price by $3,000 d. borrowing the $3,000 for the cash down payment from a private source

d. borrowing the $3,000 for the cash down payment from a private source

The financial interest in a property held by the owner in excess of any liens against it is called a. hypothecation b. subordination c. leverage d. equity

d. equity

Regulation Z applies to a. business loans b. real estate sales agreements c. commercial loans less than $10,000 d. personal credit transactions less than $25,000

d. personal credit transactions less than $25,000

The purpose of the Real Estate Settlement Procedures Act (RESPA) is to a. ensure that buyers do not borrow more money than they can repay b. make real estate brokers more responsive to the needs of buyers c. help sellers know hoe much money is required to purchase the property d. see that borrowers know all of their settlement costs

d. see that borrowers know all of their settlement costs

The trustee foreclosed on a property after the borrower defaulted on the loan payments. At the foreclosure auction, however, the house only sold for $129,000. The unpaid balance of the loan at the time of the sale was $140,000. What must the lender do to recover the $11,000 the borrower still owes? a. sue for damages b. sue for specific performance c. seek a judgement by default d. seek a deficiency judgement

d. seek a deficiency judgement

When a mortgage loan has been paid in full, it is important for the borrower to be sure that a. the paid note is placed in a safe deposit box b. a deed of partial reconveyance is obtained c. the paid mortgage is returned to the lender d. the satisfaction of mortgage is recorded

d. the satisfaction of mortgage is recorded