Assessment Flashcards
In lien theory states, the ___ holds both legal and equitable title.
Mortgagor (borrower)
The ___ is the borrower’s personal promise to repay a debt according to agreed terms
promissory note
In title theory states, the ___ actually gives legal title to the ___ and retains equitable title.
Mortgagor gives legal title to the mortgagee
In a mortgage, the ___ pledges land to the ___ as a security for debt.
Mortgagor (borrower) pledges land to the Mortgagee (lender)
In lien theory states, the mortgagor (borrower) holds…
Legal and equitable title
In lien theory states, the ___ has a lien on the property as security for the mortgage debt.
mortgagee (lender)
In lien theory states, the mortgagee (lender) has a(n) ____ as security for the mortgage debt.
Lien on the property
The ___ exposes all of the borrower’s assets to claims by secured creditors.
Promissory note
In title theory states, the mortgagor actually gives ___ to the mortgagee and retains ___
Gives legal title
Retains equitable title
In title theory states, ___ is returned to the mortgagor when the debt is paid in full
Legal title
In title theory states, legal title is returned to the ___ when the debt is paid in full
Mortgagor
In title theory states, legal title is returned to the mortgagor when ___.
the debt is paid in full
In a mortgage, the borrower (mortgagor) pledges ___ to the lender (mortgagee) as a security for debt.
Land
Sometimes known as a friendly foreclosure because it is carried out by mutual agreement, rather than by lawsuit.
Deed in Lieu of foreclosure
Borrower in a mortgage
Mortgagor
Lender in a mortgage
Mortgagee
A sale of real estate in which the sale proceeds are less than the balance owed on the property’s loan
Short sale
Legal procedure in which property pledged as security is sold to satisfy the debt
Foreclosure
___ comprises the borrower’s monthly loan payments
PITI
If a borrower defaults, the lender may declare the entire debt due and payable immediately
Acceleration clause
As an alternative to foreclosure, a lender may accept a(n) ___ from the borrower.
Deed in lieu of foreclosure
As an alternative to ___, a lender may accept a deed in lieu of foreclosure from the borrower
Foreclosure
___ allows the property to be sold by court order after the mortgagee has given sufficient public notice.
Judicial foreclosure
___ is the means by which defaulting borrowers are given a chance to redeem their property
Equitable right of redemption
Pledging property for a loan without giving up possession of the property itself is called
Hypothecation
Although the homeowners have located a buyer for their home, the buyer’s offer is less than what the homeowners owe. In this situation, if the lender agrees to accept an amount less than owed, the lender has agreed to…
a short sale
If a borrower must pay $2700 on a $90,000 loan, how many points is the lender charging for this loan?
3
Which of the following is the IL usury ceiling for loans secured by real property?
a) 9.5%
b) 8%
c) a fluctuating rate based on the quarterly federal reserve rate
d) none of the above
None of the above
What is the theory of mortgagor/mortgagee relationship in IL?
Intermediate mortgage theory
In a land contract, the vendee has possession…
during the term of the contract
If a borrower defaults on a loan, the ___ in the note gives the lender the right to have all future installments due and payable immediately on default.
Acceleration clause
A prospective buyer needs to borrow money to buy a house. The buyer applies for and obtains a real estate loan from a mortgage company. The buyer then signs a note and a mortgage. In this example, the mortgage company is the ___.
Mortgagee
After a mortgagor makes final payment to the mortgagee, the mortgagee would give the mortgagor a(n) ___.
Satisfaction of mortgage
A prospective buyer needs to borrow money to buy a house. The buyer applies for and obtains a real estate loan from a mortgage company. The buyer then signs a note and a mortgage. In this example, the buyer is the ___.
Mortgagor
In IL, mortgage foreclosures may be obtained only through a court proceeding, meaning that IL is characterized as a(n) ___ state.
judicial foreclosure
Which of these is included in the definition of “mortgage” contained in the IL Mortgage foreclosure law?
a) Assignments of beneficial interests in living trusts
b) installment contracts payable over a maximum of 5 years
c) deeds in trust
d) Installment contracts payable over at least 5 years with a 20% down payment
Installment contracts payable over at least 5 years with a 20% down payment
In IL, when may a mortgagor in default exercise the right of reinstatement?
Up to 90 days after service of summons
Under a typical land contract, when does the vendor give the deed to the vendee?
when the contract is fulfilled and all payments have been made
The borrower under a deed of trust is called the ___.
Trustor
In IL, when must a release be delivered to a mortgagor or trustor once the mortgage or deed of trust has been fully satisfied?
within 1 month after full payment and satisfaction
A charge of 3 discount points on a $120,000 loan equals
$3,600
Discount points on a mortgage are computed as a percentage of the…
loan amount
The successful bidder at a foreclosure sale in IL immediately receives a(n) ___.
Certificate of sale
According to the Mortgage Escrow Account Act, an individual who has owned his home for 12 years and reduced his mortgage balance to 65% of its original amount may….
Terminate his escrow account
