A-5 Foreclosure-Carryback Documents and Financing Flashcards
1
Q
Which of the following authorizes the use of the "Power of Sale" in a deed of trust? A. trustor B. court C. beneficiary D. trustee
A
C - beneficiary
2
Q
Why would a seller accept an agreement for sale instead of a purchase money mortgage?
A. the agreement gives more flexibility to the buyer
B. the seller can keep the deed until the carryback is paid
C. the buyer can prevent foreclosure
D. the purchase money mortgage note is more negotiable
A
B - the seller can keep the deed until the carryback is paid
3
Q
The redemption period on a deed of trust following the trustee's sale is: A. 30 days B. 90 days C. 6 months D. does not exist
A
D - does not exist
4
Q
Who benefits from the assignment of rents clause? A. trustee B. mortgagor C. beneficiary D. Vendee
A
C - beneficiary
5
Q
A trustee under a deed of trust would not be involved in which of the following circumstances? A. loan paid in full B. issuance of the deed of reconveyance C. trustor is delinquent D. collection of monthly loan payments
A
D - collection of monthly loan payments
6
Q
Which of the following requires lenders to inform borrowers, when buying a home, secured by a mortgage or trust deed, of all finance charges, fees and interest at the time of signing the loan documents? A. HUD B. FHA C. Regulation Z D. RESPA
A
C - regulation Z
7
Q
After a mortgage foreclosure any excess monies would go to the: A. trustee B. mortgagee C. mortgagee's attorney D. mortgagor
A
D - mortgagor
8
Q
The supply and cost of money can be most effectively controlled by: A. FHA interest rates B. stock prices C. Federal reserve system D. Supply and demand
A
C - Federal Reserve System
9
Q
The office of thrift supervision is the governing body for: A. Mortgage brokers B. savings and loan associations C. commercial banks D. FNMA
A
B - savings and loan associations
10
Q
How many days would a alender have to give the buyer a good faith estimate in a residential loan transaction? A. 3 days from purchase contract B. 3 days from close of escrow C. 3 days from loan application D. 3 days from approval
A
C - 3 days from loan application
11
Q
Fannie Mae is active in the: A. Primary mortgage market B. secondary mortgage market C. loan origination markets D. federal reserve market
A
B - Secondary mortgage market
12
Q
a primary lender decides to take a deed in lieu of foreclosure from the borrower who is in default on a first of $75,000 and a second of $8,000. The lender would have how much equity, over and above the first in the property if the value of the property is $150,000? A. $67,000 B. $75,000 C. $83,000 D. $91,000
A
A - $67,000
13
Q
The real estate settlement and procedures act applies to all of the following EXCEPT: A. FHA B. VA C. a loan sold to Fannie Mae D. commercial loan
A
D - commercial loan
14
Q
The agency that regulates Reg Z is: A. HUD B. VA C. FTC D. RESPA
A
C - FTC
15
Q
A non-recourse loan would not provide for which of the following: A. loan repayment B. loan documents C. deficiency judgment D. Foreclosure
A
C - deficiency judgment
16
Q
At a mortgage foreclosure sale, the buyer gets a deed from: A. The sheriff B. the mortgagor C. mortgagee D. no one
A
D - no one
17
Q
Real estate loan usury rates are set by: A. Federal laws B. State laws C. code of real estate D. statute of frauds
A
B - state laws
18
Q
The funds for a loan secured by a trust deed are supplied by the: A. trustor B. escrow agent C. Trustee D. beneficiary
A
D - beneficiary
19
Q
A trustor lists his property for sale on May 1. On May 2 he was notified of default on the trust deed, which default had occurred 45 days prior to notification. The trustor, under these conditions:
A. cannot sell the property without the trustee’s permission
B. cannot sell the property without the beneficiary’s permission
C. May sell the property within the 90 day reinstatement period
D. Must bring all payments current before signing a purchase contract with a potential buyer
A
C - may sell the property within the 90 day reinstatement period
20
Q
What is the maximum legal contract rate of interest for individuals to pay on real estate loans in Arizona? A. 10% B. 12% C. 16% D. unlimited
A
D - unlimited
21
Q
A real estate financing device which does not transfer legal title but does place equitable title with the buyer is called: A. contract of sale B. agreement for sale C. agreement to sell D. none of these
A
B - agreement for sale
22
Q
The lender may consider his mortgage or trust deed to be: A. estates in land B. personal property C. real property D. an encumbrance up his property
A
B - personal property
23
Q
Which of the following cannot be a trustee? A. saving and loan institutions B. Attorney C. real estate broker D. C.P.A.
A
D - CPA
24
Q
When a borrower repays a lender at a rate higher then agreed, the excess payment are applied to: A. Interest B. Principal C. interest and principal D. the balloon payment
A
B - principal
25
```
Which of the following carries out the "Power of Sale" in a deed of trust?
A. trustor
B. court
C. beneficiary
D. trustee
```
D - trustee
26
A trustee's fee under a deed of trust is:
A. one half of 1% of the original loan balance
B. .05 of the existing loan balance
C. .005 of the existing loan balance
D. .005 of the original loan balance
C - .005 of the existing loan balance
27
```
As a salesperson, you sell a piece of property for your client in which he takes back a purchase money mortgage as part payment. The buyer in this situation becomes the:
A. Mortgagee
B. Mortgagor
C. Grantor
D. Beneficiary
```
B - Mortgagor
28
```
When a mortgage that was in default has been satisfied, the mortgage has been:
A. recaptured
B. reinstated
C. reverted
D. redeemed
```
D - redeemed
29
```
A property is in the process of being foreclosed. Who is responsible for the property taxes?
A. beneficiary
B. trustor
C. successful bidder
D. trustee
```
B - trustor
30
```
A wraparound loan would never be which of the following?
A. an agreement for sale
B. a junior
C. a first deed of trust
D. a purchase money mortgage
```
C - a first deed of trust
31
```
Which of the following would not apply to a deed of trust?
A. redemption periods
B. option to judicially foreclose
C. reinstatement period
D. Curing the default
```
A - redemption periods
32
```
Which of the following would not occur in a forbearance?
A. work out
B. deferment
C. moratorium
D. foreclosure sale
```
D - foreclosure sale
33
Why would the A.P.R. be higher than the interest rate on the note?
A. because the term of the loan cold be as long as 30 years
B. interest is in arrears, therefore, increasing the lender's return
C. The lender charges discount points
D. The rate on the note is simple interest and the APR is a compound rate
C - the lender charges discount points
34
```
A lender is limited in the amount of reserves they may hold in a residential real estate transaction. This is governed by:
A. regulation Z
B. respa
C. fair housing
D. sherman anti-trust
```
B - respa
35
You own a piece of land that is free and clear. You borrow against your equity on a first deed of trust. You then buy a mobile home and live on the property. You later are in default of the deed of trust. The lender can foreclose against:
A. the mobile home only
B. the land only
C. the mobile home and land
D. neither if the property was less than 2.5 acres
B - the land only
36
```
The effective rate of interest is best described as:
A. simple interest
B. legal rate
C. rate minus MIP insurance
D. annual percentage rate
```
D - annual percentage rate
37
```
You purchase a house for $152,850 and put $10,000 down. The seller carries the balance on an agreement for sale. You make interest payments of $8,200 and principal payments of $22,500. How much time would you have to reinstate the agreement for sale if you were in default?
A. 30 days
B. 60 days
C. 120 days
D. 9 months
```
B - 60 days
38
A commercial loan is now in default. Which of the following would most likely apply?
A. the lender could look to FHA for assistance
B. the lender could obtain a deficiency judgment against the owners
C. the lender could use the PMI as coverage for the loan
D. a deficiency may not be obtained on commercial loans
B - the lender could obtain a deficiency judgment against the owners
39
```
When an active military person is unable to make his monthly mortgage payment the lender must obey which of the following?
A. federal homestead law
B. sherman antitrust law
C. fair housing act 1968
D. soldiers and sailors relief act
```
D - soldiers and sailors relief act
40
```
The vendor has elected to foreclose an agreement for sale as a mortgage. Which of the following applies?
A. redemption
B. reinstatement
C. forfeiture
D. no foreclosure is allowed
```
A - redemption
41
```
A contract is written so the seller will carry back a portion of the sales price. After the close of escrow, the seller sells the carryback loan to another party. Which statement described this action?
A. assignment of beneficial interest
B. assumption with novation
C. subordination clause
D. sale with a leaseback
```
A - assignment of beneficial interest
42
```
When a lenders advertising is considered bait and switch it would be regulated by:
A. federal reserve
B. fair housing act of 1988
C. truth in lending
D. sherman anti trust laws
```
C - truth in lending
43
```
According to RESPA a lender must disclose which of the following?
A. if the loan will be sold
B. the reason the loan was denied
C. other lenders with lower rates
D. what loan is best for the borrower
```
A - if the loan will be sold
44
```
Truth in lending act regulation would apply if a loan has more than:
A. 1 payment
B. 2 payments
C. 3 payments
D. 4 payments
```
D - 4 payments
45
```
When the seller creates a wraparound loan with the buyer the benefit to the seller would be:
A. estate for years
B. Arbitrage
C. Negative amortization
D. Novation
```
B - Arbitrage
46
```
When the federal reserve wants to stimulate the economy, they would:
A. raise interest rates
B. raise the discount rate
C. lower the FHA qualifying rates
D. lower reserve requirements
```
D - lower reserve requirements
47
```
Which of the following activities will not occur in the secondary market?
A. signing of the estoppel certificate
B. endorsing the note
C. an origination fee
D. discounting the note
```
C - an origination fee
48
```
According to RESPA, what is the maximum amount of tax reserves a lender may impound?
A. One month
B. Two months
C. Three months
D. Six months
```
B - Two months
49
```
The book "Settlement Costs and You" is a requirement of:
A. federal reserve
B. regulation Z
C. RESPA
D. Fair Housing Act
```
C - RESPA
50
A mortgage broker would differ from a mortgage banker in that:
A. A broker can service the loan
B. A banker can service the loans
C. A broker would only make FHA & VA loans
D. A banker has a strict loan limit
B - A banker can service the loans
51
When a buyer takes over a sellers loan "subject to", which of the following is true?
A. seller is still liable for the loan
B. seller is released of all loan liability
C. buyer assumes all loan liability
D. lender will make the buyer qualify for the loan
A - seller is still liable for the loan
