real estate study study
In what way does a deed of trust differ from a mortgage? A) In the number of parties involved in the loan B) In the obligation of the borrower to repay the funds C) In the redemption rights allowed after foreclosure D) In the time period permitted to cure a default
In the number of parties involved in the loan
A promissory note A. may not be executed in connection with real estate loan B. is an agreement to perform or not to perform certain acts. C. makes the borrower personally liable for the debt D is a guarantee by the a government agency
Make the buyer personally liable for the debt
a borrower obtained a $7,000 second mortgage loan for 5 years at 6 percent interest per annum. Monthly payments of principle and interest were $50.00. 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. an accelerated loan d. a partially amortized loan
a partially amortized loan
a person who assumes an existing mortgage loan is a. personally responsible for paying the principal balance. b. not in danger of losing the property by default c. generally released from liability, but not always d. not personally liable for the repayment of the debt
a personally responsible for paying the principal balance
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) he or she obtains a deed of partial reconveyance. C) the paid mortgage is returned to the lender. D) a satisfaction of mortgage is recorded
a satisfaction of mortgage is recorded
when a mortgage loan has been paid in full, it is important for the borrower to be sure that a. he or she obtains a deed of partioal reconveyance b. the paid note is placed in a safe deposit box c. a satisfacation of mortgage is recorded d. the paid mortgage is returned to the lender
a satisfaction of mortgage is recorded
A mortgage broker generally offers which of the following services? a. providing credit qualification and evaluation reports b. bringing the borrower and the lender together c. handling the escrow procedures d. granting real estate loan using investors funds
bringing the borrower and the lender together
a freindly foreclosure enables a mortgagor to prevent the mortgagee from taking the property by statutory means. This can be accomplisted by use of a/n: a. assumption b. deed in lieu of foreclosure c. escrow deed d. reconveyance deed
deed in lieu of foreclosure
All the following clauses in a loan agreement enable the lender to demand the entire remaining debt be paid immediately EXCEPT a(an) A) due-on-sale clause B) defeasance clause C) acceleration clause D) alienation clause
defeasance clause
all of the following clauses in a loan agreement enable the lender to demand the entire remaining dept be paid immediately EXCEPT a/n a. due-on-sale clause b. alienation clause c. defeasance clause d. acceleration clause
defeasance clause
The clause in a mortgage instrument that would prevent the assumption of the mortgage by a new purchaser is a A) due-on-sale clause. B) power of sale clause. C) defeasance clause. D) certificate of sale clause.
due-on-sale clause
the clause in a mortgage instrument that would prevent the assumption of the mortgage by a new purchaser is a a. power of sale clause b. defeasance clause c. due-on-sale clause d. certificate of sale clause
due-on-sale clause
The seller agrees to sell the house to the buyer for $100,000. The buyer was unable to qualify for a mortgage loan for this amount 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) mortgagee in possession
equitable title
the seller agrees to sell the house to the buyer for 100,000. The buyer was unable to qualify for a mortgage loan for this amount so the seller and the buyer enter into a contract for deed. the interest the buyer has in the property under a contract for deed is a. equitable title b. joint title c. legal title d. mortgage in possession
equitable title
The discount points charged on a VA guaranteed mortgage loan could NOT be paid a. from the mortgage loan proceeds b. by the seller c. by the buyer d. by the buyer and seller
from the mortgage loan proceeds
The discount points charged on a VA guaranteed mortgage loan could NOT be paid a. by the buyer b. by the seller c. by the buyer and seller d. from the mortgage loan proceeds
from the mortgage loan proceeds.
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. straight loan b. partially amortized loan c. conventional loan d. fully amortized loan
fully amortized loan
A mortgagor is the one who A) gives a mortgage B) holds a mortgage C) provides mortgage funds D) forecloses on a mortgage
gives a mortgage
the purpose of the Real Estate Settlement Procedures Act (RESPA) is to a. see that buyer do not borrow more money that they can pay b. help sellers know how much money is required to purchase the property c. help borrowers know and understand all their settlement costs d. make real estate brokers more responsive to the needs of buyers
help borrowers know and understand all their settlement costs
when compared with a 30-year payment period, taking out a loan with a 20-year payment period would result in a. slower equity buildup b. greater impound requirements c. lower monthly payments d. higher monthly payments
higher monthly payments
When compared with a 30-year payment period, taking out a loan with a 20-year payment period would result in a. greater impound requirements b. lower monthly payments c. higher monthly payments d. slower equity buildup
higher montly payments
The pledging of property as security for payment of a loan without surrendering possession is A) disintermediation. B) equity. C) hypothecation. D) subordination
hypothecation
the pledging of property as security for payment of a loan without surrendering possession is a. subordination b. hypothecation c. equity d. disintermed
hypothecation
in what way does a deed of trust differ from a mortgage a. in the time period permitted to cure a default b. in the redemption rights allowed after foreclosure c. in the number of parties involved in the loan d. in the obligation of the borrower to repay the funds
in the number of parties involved in the loan
members of which of the following pairs of terms are synonymous a. construction loan and pass-through looan b. interim financing and construction loan c. takeout loan and construction loan d. pass-through loan and takeout loan
interim financing and construction loan
when real estate is sold under an installment land contract and the buyer takes possession of the property the legal title, a. must be transferred to a land trust b. is kept by the seller until the purchase price is paid according to the contract c. is transferred to the buyer d. is subject to a purchase money mortgage
is kept by the seller until the purchase price is paid accourding to the contract
the fee charged by a mortgage broker to arrange a loan is a/n a. loan origination fee b. prepayment penalty c. prepayment of mortgage insurance d. advance interest payments
loan origination fee
The amount of a loan expressed as a percentage of the value of the real estate offered as collateral is the a. debt-to-equity ratio b. amortization ratio c. loan-to-value ratio d. capital-use ratio
loan-to-value ratio
a promissory note a. is a guarantee by a government agency b. makes the borroower personally liable for the debt c. is an agreement to perform nor not to perform certain acts d. may not be executed in connection with a real estate loan
makes the borrower personally liable for the debt
An agreement executed by the seller, buyer, and lender on an existing mortgage to be assumed that will release the seller from any future liability is called a A) novation B) equitable title C) defeasance clause D) deed of trust
novation
The typ of real estate loan that allows the lender to increase the outstanding balance of a loan up the original sum in the note while advancing additinoal funds is the a. graduated-payment mortgage b. wraparound mortgage c. open-end mortgage d. growing-equity mortgage
open-end mortgage
the principal distinction between the primary mortage market and the secondary mortgage market is in the a. use of mortgages versus the use of deeds of trust b. use of discount points versus the use of origination fees c. origination versus the purchase of mortage loans d. insuring versus the guaranteeing of mortgage loans
origination versus the purchase of mortgage loans
Mortgage lenders want assurance that future real estate taxes will be paid. The most common way to do this is to require the borrower to a. sign a note b. submit paid tax receipts c. pay into an impound account d. obtain title insurance
pay into an impound account
A person who assumes an existing mortgage loan is A) not personally liable for the repayment of the debt. B) not in danger of losing the property by default. C) personally responsible for paying the principal balance. D) generally released from liability, but not always
personally responsible for paying the principal balance.
The purpose of a mortgage is to A) provide security for a loan B) convey title of the property to a lender C) restrict the borrower's use of the property D) create a lien on the property
provide security for a loan
the purpose of a mortgage is to a. create a lien on the property b. restrict the borrowers use of the property c. provide security for the loan
provide security for the loan
Fannie Mae, Ginnie Mae, and Freddie Mac all a. insure residential mortgage loans b. originate residential mortgage loans c. purchase existing mortgage loans d. guarantee existing mortgage loans
purchase existing mortgage loans
An extension of credit from a seller to a buyer to allow the buyer to complete the transaction is called a a. purchase money mortgage b. package mortgage c. blanket mortgage d. growing equity mortgage
purchase money mortgage
an extension of credit from a seller to a buyer to allow the buyer to complete the transaction is called a a. growing equity mortgage b. purchase money mortgage c. package mortgage d. blanket mortgage
purchase money mortgage
The right a mortgagor has to regain the property by paying the debt after a foreclosure sale is called A) acceleration . B) redemption. C) reversion. D) recapture
redemption
the right a mortgagor has to regain the property by paying the debt after a foreclosure sale is called a. recapture b. reversion c. redemption d. acceleration
redemption
the mortgagee foreclosed on a property after the borrower defaulted on the loan payments. At the foreclosure sale, however, the house sold for only $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. seek a deficiency judgement b. sue for damages c. sue for special performance d. seek a judgement by default
seek a deficency judgment
An existing mortgage loan can have its lien priority lowered through the use of a a. reconveyance of mortgage b. subordination agreement c. satisfaction of mortgage d. hypothecation agreement
subordination agreement
if the amount realized at a sheriff's sale as part of a mortgage foreclosure is more than the amount of the indebtedness and expenses, then the excess belongs to a. the mortgagee b. the sheriff's office c. the county d. the mortgagor
the mortgagor
which of the following is true about an installment(land) contrat? a. the buyer obtains a mortgage loan b. the seller delivers legal title to the buyer c. the buyer is given posession d. the seller delivers a deed to the buyer
the seller delivers legal title to the buyer
In absence of an agreement to the contrary, the mortgage having priority will be the one A) for the highest amount. B) which was recorded first. C) which was signed first. D) that is a construction loan
which was recorded first
in absence of an agreement to the contrary, the mortgage having priority will be the one a. which was signed first b. that is a construction loan c. which was recorded first d. for the highest amount
which was recorded first
A building was sold for $115,000. Earnest money in the amount of $15,000 was deposited in escrow, and the buyer obtained a new loan for the balance of the purchase price. The lender charged 2 discount points on the loan. What was the total amount of cash used by the buyer for this purchase? A) $2,300 B) $15,000 C) $17,000 D) $17,300
$17,000
A building was sold for $115k. Earnest money in the amount of 15k was depositied in escrow and the buyer obtained a new loan for the balance of the purchase price. The lender charged 2 discount points on the loan. What was the total amount of cash used by the buyer for this purchase? a. $2300 b .$15000 c. $17000 d.$17300
$17000 $100000 loan amount x .02 plus $15000
If a buyer obtains a $50,000 mortgage with 4 points, how much will the lender charge at closing? A) $6,000 B) $200 C) $2,000 D) $40,000
$2,000
If a house sold for $80,000 and the buyer obtained a loan for $72,000, how much money would the buyer pay if the lender charged 3 points? A) $2400 B) $2328 C) $2160 D) $240
$2160
in a house sold for $80,000 and the buyer obtained a loan for $72,000, how much money would the buyer pay if the lender charged 3 points? a. $240 b. $2160 c. $2400 d. $2328
$2160
an FHA-insured mortgage loan would be obtained from which of the following? a. the Federal Housing Administration b. Any FHA-approved insuring institution c. The Department of Housing and Urban Development d. Any FHA- approved lending institution
...any FHA-approved lending institution
If the quarterly interest at 10 1/2 percent is $3,150, the principal amount of the loan is a. $120,000 b. $90,000 c. $30,000 d. $60,000
120,000
A building was sold for $115,000. Earnest money in the amount of $15,000 was deposited in escrow, and the buyer obtained a new loan for the balance of the purchase price. The lender charged 2 discounts points on the loan. What was the total amount of cash used by the buyer for this purchase? a. $15,000 b. $2,300 c. $17,000 d. $17,300
17,000
if a buyer obtains a $50,000 morgage with 4 points, how much will the lender charge at closing? a. $40,000 b. $2,000 c. $6,000 d. $200
2,000
A land contract provides for the A. sale of unimproved land only B. sales of real property under an option agreement C. conveyance of legal title at a future dated
Conveyance of legal title at a future date
A mortgagor is the one who A. gives a mortgage B. holds a mortgage C. provides mortgage funds D. foreclosure on mortgage
Holds a mortgage (borrower)
The fee charged by a mortgage broker to arrange a loan is a A. prepayment penalty B. advance interest payment C. loan origination fee D. prepayment of mortgage insurance
Loan origination fee
The mortgagee foreclosed on a property after the borrower defaulted on the loan payments. At the foreclosure sale, however, the house sold for only $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 judgment by default D) Seek a deficiency judgment
Seek a deficiency judgment
Charging more interest than is legally allowed is known as A. escheat B usury C a deficiency D an estoppel
Usury
which of the following statements is true a. a mortgage document contains no covenants or promises on the part of the borrower b. a buyer does not have to be a veteran to assume a VA loan c. a deed of trust is typically conveyed by the trustor to the beneficiary d. the priority of a mortgage is determined by the date on which it was executed
a buyer does not have to be a veteran to assume a VA loan.
if a property sold at a mortgage foreclosure does not bring an amount suffficient to satisfy the outstanding mortgage debt, the mortgagor may be responsible for a. a default judgement b. liquidated damages c. punitive damages d. a deficiency judgement
a deficiency judgement
If a property sold at a mortgage foreclosure does not bring an amount sufficient to satisfy the outstanding mortgage debt, the mortgagor may be responsible for A) a default judgment B) a deficiency judgment C) liquidated damages D) punitive damages
a deficiency judgment
payable upon default is the a. judgment clause b. escalator clause c. forfeiture clause d. acceleration clause
acceleration clause
the clause in a trust deed or mortgage that permits the lender to declare the entire unpaid balance immediately due and payable upon default is teh a. acceleration clause b. escalator clause c. judgement clause d. forfeiture clause
acceleration clause
A "friendly foreclosure" enables a mortgagor to prevent the mortgagee from taking the property by statutory means. This can be accomplished by use of a(n) A) deed in lieu of foreclosure. B) reconveyance deed. C) assumption. D) escrow deed.
assumption
which of the following loans to individuals is NOT affected by the Truth in Lending Law under Regulation Z? a. household use b. business use c. swimming pools d. room additions
business use
Fannie Mae a. insures FHA loans b. buys FHA loans c. makes FHA loans d. services FHA loans
buys FHA loans
a land contract provides for the a. immediate transfer of reversionary rights b sale of unimproved land only c. sale of real property under an option agreement d. conveyance of legal title at a future date
conveyance of legal title at a future date
The purpose of a mortgage is to a. provide security for a loan b. convey title of the property to a lender c. restrict the borrower's use of the property d. create a lien on the property
create a lien on the property
a mortgagor is the one who
gives the mortgage
When real estate is sold under an installment land contract and the buyer takes possession of the property, the legal title A) is subject to a purchase money mortgage. B) must be transferred to a land trust. C) is kept by the seller until the purchase price is paid according to the contract. D) is transferred to the buyer.
is kept by the seller until the purchase price is paid according to the contract.
Mortgage lenders want assurance that future real estate taxes will be paid. The most common way to do this is to require the borrower to A) obtain title insurance. B) sign a note. C) pay into an impound account. D) submit paid tax receipts
pay into an impound account
LaShawn has just made the final payment on her home mortgage to her lender. There will still be a lien on her property until the lender records a/n a. reversion of mortgage b. reconveyance of mortgage c. satisfaction of mortgage d. alienation of mortgage satisfaction of mortgage
satisfaction of mortgage
The defeasance clause in a mortgage requires the mortgagee to execute a(n) A) assignment of mortgage. B) satisfaction of mortgage. C) subordination agreement. D) partial release agreement
satisfaction of mortgage
Billy Bob has just purchased his first home with a fixed-rate loan. The interest he will pay on this loan will be computed as a. compound interest b. discounted interest c. simple interest d. prepaid interest
simple interest
charging more interest than is legally allowed is knows as a. usury b. a deficiency c. escheat d. an estoppel
usury
Under an installment contact, the title property is held by the A. vendor B vendee C. trustor D trustee
vendor
under an installment contract, the title to the property is held by the a. trustee b. vendor c. trustor d. vendee
vendor
