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36 Cards in this Set
- Front
- Back
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Charging more interest than is legally allowed is known as
a. escheat b. usury c. a deficiency d. an estoppel |
b. usury
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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
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A promissory note
a. may not be executed in connection with a real estate loan b. is an agreement to perform or not to perform certain acts c. is the primary evidence of a debt d. is a guarantee by a government agency |
c. is the primary evidence of a debt
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The finance fee charged by the lender to make the loan is a(n)
a. prepayment penalty b. advance interest payment c. loan origination fee d. prepayment of mortgage insurance |
c. loan origination fee
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W has just purchased his first home with a fixed-rate loan. The interest he will pay over the life of the loan is
a. Simple interest b. Compound interest c. Prepaid interest d. Discounted interest |
a. Simple interest
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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 mortgagor b. the mortgagee c. the sheriff’s office d. the county |
a. the mortgagor
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L 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. satisfaction of mortgage b. reconveyance of mortgage c. alienation of mortgage d. reversion of mortgage |
a. satisfaction of mortgage
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an existing mortgage loan can have its lien priority lowered through the use of a
a. hypothecation agreement b. satisfaction of mortgage c. subordination agreement d. reconveyance of mortgage |
c. subordination agreement
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If the quarterly interest at 10 1/2 percent is $3,150, the principal amount of the loan is
a. $30,000 b. $60,000 c. $90,000 d. $120,000 |
d. $120,000
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If a property sold as a mortgage foreclosure does not sell for 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 |
b. a deficiency judgment
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The clause in a mortgage that permits the lender to declare the entire unpaid balance immediately due and payable upon default is the
a. judgment clause b. escalator clause c. forfeiture clause d. acceleration clause |
d. acceleration clause
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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 |
d. a satisfaction of mortgage is recorded
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A deed of trust differs from a mortgage in all of the following EXCEPT the
a. number of parties involved in the loan b. obligation of the borrower to repay the funds c. redemption rights allowed after foreclosure d. time period permitted to cure a default |
b. obligation of the borrower to repay the funds
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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 |
c. personally responsible for paying the principal balance
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The 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
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The mortgagee foreclosed on a property after the borrower defaulted on the loan payments. At the foreclosure sale, however, the house fold for only $29,000. The unpaid balance of the loan at the time of the sale was $40,000. What must the lender do to recover the $11,00 the borrower still owes?
a. sue for damages b. sue for specific performance c. seek a judgment by default d. seek a deficiency judgment |
d. seek a deficiency judgment
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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 |
b. redemption
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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 |
a. due on sale clause
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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 arrangement |
b. satisfaction of mortgage
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A “friendly foreclosure” enables a mortgagor to prevent the mortgagee from taking the property by statutory means. This can be accomplished by a(n)
a. deed in lieu of foreclosure b. reconveyance deed c. assumption d. escrow deed |
a. deed in lieu of foreclosure
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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 the first mortgage d. that is a construction loan |
b. which was recorded first
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The pledging of property as security for payment of a loan is
a. disintermediation b. equity c. hypothecation d. subordination |
c. hypothecation
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Dannie May, Ginnie May, and Freddie Mac have in common the purpose of
a. originating residential mortgage loans b. purchasing existing mortgage loans c. insuring residential mortgage loans d. guaranteeing existing mortgage loans |
b. purchasing existing mortgage loans
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A mortgage broker generally offers which of the following services?
a. handling the escrow procedures b. bring the borrower and the lender together c. providing credit qualification and evaluation reports d. granting real estate loans using investor funds |
b. bring the borrower and the lender together
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A borrower obtained a $7,000 second mortgage loan for 5 years at 6 percent interest per annum. Monthly 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
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The principal distinction between the primary mortgage market and the secondary mortgage market is in the
a. insuring versus the guaranteeing of the mortgage loans b. origination versus the purchase of mortgage loans c. use of mortgages versus the use of deeds of trust d. use of discount points versus the use of origination fees |
b. origination versus the purchase of mortgage loans
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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(n)
a. term loan b. straight loan c. participation loan d. amortized loan |
d. amortized loan
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Which of the following is privately owned?
a. The Federal National Mortgage Association b. The Government National Mortgage Association c. The Federal Home Loan Mortgage Corporation d. The department of Veteran Affairs |
a. The Federal National Mortgage Association
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From which of the following would a borrower most likely obtain a residential real estate mortgage loan?
a. an insurance company b. a pension fund c. a commercial bank d. a savings and loan association |
d. a savings and loan association
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FNMA’s activities include all of the following EXCEPT
a. buying and selling FHA and VA mortgages b. buying and selling conventional mortgages c. buying and selling mortgages at full face value d. buying and selling mortgages at discounted values |
c. buying and selling mortgages at full face value
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As an entity operating in the secondary mortgage market, the Federal Home Loan Mortgage Corporation was established to assist the
a. Federal Housing Administration b. Federal National Mortgage Association c. Federal savings and loans d. Federal banks |
c. Federal savings and loans
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If the amount of a loan is #13,500 and the interest rate is 7 1/2 percent what is the amount of the semiannual interest payment?
a. $596.55 b. $506.25 c. $602.62 d. $457.14 |
b. $506.25
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The supply of mortgage money for single-family homes is regulated by the Federal Reserve System through which of the following?
a. reserve requirements and discount rates b. Federal National Mortgage Association c. Federal Housing Administration d. Department of Housing |
a. reserve requirements and discount rates
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Which of the following normally purchases mortgages in the secondary mortgage market?
a. mortgage bankers b. Ginnie Mae c. Federal Housing Administration d. Federal Reserve |
b. Ginnie Mae
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Last month’s loan payment included $412.50 interest on a $60,000 loan balance. What is the annual rate of interest?
a. 7 1/2 percent b. 7 3/4 percent c. 8 1/4 percent d. 8 1/2 percent |
a. 7 1/2 percent
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The purpose of a mortgage is to
a. provide security for the loan b. convey title of the property to the lender c. restrict the borrower’s use of the property d. create a lien on the property |
a. provide security for the loan
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