Ch 12 - Residential mortgages Flashcards Preview

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Flashcards in Ch 12 - Residential mortgages Deck (20)
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1

True or false, in a lien theory state, the lender holds title? Falls

False

In a lien theory state, the lender holds a lien against the property. In A title theory state the lender holds title

2

True or false, when a buyer assumes an existing mortgage, a partial release will be issued which verifies the amount of the unpaid balance, interest-rate, and date to which interest has been paid prior to the assignment.

False

When a buyer assumes an existing mortgage, an estoppel certificate will be issued which verifies the amount of the unpaid balance, interest rate, and date to which interest has been paid prior to the assignment.

3

True or false, Even with and amortized mortgage, a buyers loan payment will change occasionally if the property taxes and homeowners insurance increases or decreases.

True

4

True or false,
For every discount point Purchased, the lenders yield increases by 1/8 of a percent

True

5

True or false, Florida is a title theory state

False

Florida is a lien theory states

6

True or false, A contract for deed is also called a land contract

True

7

True or false, if upon a foreclosure, there isn’t enough money to even pay off the debt to the mortgage; then a deficiency judgment can be placed against the borrower.

True

8

True or false, The acceleration clause calls the entire balance of the loan do if the borrower defaults on the loan.

True

9

True or false, Hypothecation pledges the property as collateral

False

The mortgage pledges the property as collateral. Hypothecation is the pledging of securities or other assets as collateral to secure a loan while not giving up possession of the property.

10

One discount points on a $100,000 mortgage cost $2500

False

Each discount point costs 1% of the purchase price per discount point. 100,000×.01 = $1000

11

Which statement is false regarding a blanket mortgage?

It is a mortgage which creates a lien on multiple parcels combined with Chattel

It is used by builders/developers that have more than one piece of real estate to finance and then sell

The mortgage is for the combined value of the properties

A partial release clause allows each property to be released as collateral from the mortgage as each property is sold

It is a mortgage which creates a lien on multiple parcels combined with chattel.

12

In the event that a mortgagor stops making payments on the loan of an income producing property, what allows the lender to collect the income produced from the property?

Acceleration
Defeasance
Habendum
Receivership clause

Receivership clause

13

What fees charged by a lender for holding credit available for a Borrower, often associated with a construction loan?

Take out commitment fee
Loan origination fee
Discount point
Buy down

Take out commitment fee

14

A novation agreement:

Releases the original party from obligation to the agreement

Guarantees the original party will satisfy the contract if the new party fails to perform

Secures the property as collateral

Details the terms of the loan

Releases the original party from obligation to the agreement

15

You own a home that has a market value of $250,000. You also have a mortgage on the property with a balance due of $55,000. How much equity do you have in the home?

$305,000
$195,000
$255,000
$55,000

$195,000

16

The part of the purchase price paid in cash upfront, reducing the amount of the loan or mortgage:

Interest
Savings
Down payment
Collateral

Down payment

17

Which statement is false regarding lien priority?

Becomes important when there is not enough money to cover all debts against the property

Mortgage there is clothes first is paid before other mortgages

Junior liens are paid after superior liens

A subordination agreement can change the order of who is paid first

The mortgage that is closed first is paid before other mortgages

18

Jackson is buying a home for $500,000. His interest rate on the loan will be 5% for 15 years. He will have a down payment of $20,000. What is the LTV on the loan?

96%
4%
95%
9.5%

96%

19

The promissory note is:

The legal instrument that pledges the property as collateral

What releases the original borrower from obligation to the debt

What contains specific terms of the loan such as rate, length of term, payment, etc.

What allows the borrower to stay in the home

What contains specific terms of the loan such as rate, length of term, payment, etc.

20

What clause stipulates terms in which a mortgage loan can be pre-paid; allows the borrower to pay off part or all of the loan without penalty?

Right to reinstate
Due on sale clause
Defeasance clause
Prepayment clause

Prepayment clause