Assessment

Question 1

In lien theory states, the ___ holds both legal and equitable title.

Answer 1

Mortgagor (borrower)

Question 2

The ___ is the borrower’s personal promise to repay a debt according to agreed terms

Answer 2

promissory note

Question 3

In title theory states, the ___ actually gives legal title to the ___ and retains equitable title.

Answer 3

Mortgagor gives legal title to the mortgagee

Question 4

In a mortgage, the ___ pledges land to the ___ as a security for debt.

Answer 4

Mortgagor (borrower) pledges land to the Mortgagee (lender)

Question 5

In lien theory states, the mortgagor (borrower) holds…

Answer 5

Legal and equitable title

Question 6

In lien theory states, the ___ has a lien on the property as security for the mortgage debt.

Answer 6

mortgagee (lender)

Question 7

In lien theory states, the mortgagee (lender) has a(n) ____ as security for the mortgage debt.

Answer 7

Lien on the property

Question 8

The ___ exposes all of the borrower’s assets to claims by secured creditors.

Answer 8

Promissory note

Question 9

In title theory states, the mortgagor actually gives ___ to the mortgagee and retains ___

Answer 9

Gives legal title
Retains equitable title

Question 10

In title theory states, ___ is returned to the mortgagor when the debt is paid in full

Answer 10

Legal title

Question 11

In title theory states, legal title is returned to the ___ when the debt is paid in full

Answer 11

Mortgagor

Question 12

In title theory states, legal title is returned to the mortgagor when ___.

Answer 12

the debt is paid in full

Question 13

In a mortgage, the borrower (mortgagor) pledges ___ to the lender (mortgagee) as a security for debt.

Answer 13

Land

Question 14

Sometimes known as a friendly foreclosure because it is carried out by mutual agreement, rather than by lawsuit.

Answer 14

Deed in Lieu of foreclosure

Question 15

Borrower in a mortgage

Answer 15

Mortgagor

Question 16

Lender in a mortgage

Answer 16

Mortgagee

Question 17

A sale of real estate in which the sale proceeds are less than the balance owed on the property’s loan

Answer 17

Short sale

Question 18

Legal procedure in which property pledged as security is sold to satisfy the debt

Answer 18

Foreclosure

Question 19

___ comprises the borrower’s monthly loan payments

Answer 19

PITI

Question 20

If a borrower defaults, the lender may declare the entire debt due and payable immediately

Answer 20

Acceleration clause

Question 21

As an alternative to foreclosure, a lender may accept a(n) ___ from the borrower.

Answer 21

Deed in lieu of foreclosure

Question 22

As an alternative to ___, a lender may accept a deed in lieu of foreclosure from the borrower

Answer 22

Foreclosure

Question 23

___ allows the property to be sold by court order after the mortgagee has given sufficient public notice.

Answer 23

Judicial foreclosure

Question 24

___ is the means by which defaulting borrowers are given a chance to redeem their property

Answer 24

Equitable right of redemption

Question 25

Pledging property for a loan without giving up possession of the property itself is called

Answer 25

Hypothecation

Question 26

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…

Answer 26

a short sale

Question 27

If a borrower must pay $2700 on a $90,000 loan, how many points is the lender charging for this loan?

Answer 27

3

Question 28

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

Answer 28

None of the above

Question 29

What is the theory of mortgagor/mortgagee relationship in IL?

Answer 29

Intermediate mortgage theory

Question 30

In a land contract, the vendee has possession…

Answer 30

during the term of the contract

Question 31

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.

Answer 31

Acceleration clause

Question 32

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 ___.

Answer 32

Mortgagee

Question 33

After a mortgagor makes final payment to the mortgagee, the mortgagee would give the mortgagor a(n) ___.

Answer 33

Satisfaction of mortgage

Question 34

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 ___.

Answer 34

Mortgagor

Question 35

In IL, mortgage foreclosures may be obtained only through a court proceeding, meaning that IL is characterized as a(n) ___ state.

Answer 35

judicial foreclosure

Question 36

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

Answer 36

Installment contracts payable over at least 5 years with a 20% down payment

Question 37

In IL, when may a mortgagor in default exercise the right of reinstatement?

Answer 37

Up to 90 days after service of summons

Question 38

Under a typical land contract, when does the vendor give the deed to the vendee?

Answer 38

when the contract is fulfilled and all payments have been made

Question 39

The borrower under a deed of trust is called the ___.

Answer 39

Trustor

Question 40

In IL, when must a release be delivered to a mortgagor or trustor once the mortgage or deed of trust has been fully satisfied?

Answer 40

within 1 month after full payment and satisfaction

Question 41

A charge of 3 discount points on a $120,000 loan equals

Answer 41

$3,600

Question 42

Discount points on a mortgage are computed as a percentage of the…

Answer 42

loan amount

Question 43

The successful bidder at a foreclosure sale in IL immediately receives a(n) ___.

Answer 43

Certificate of sale

Question 44

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….

Answer 44

Terminate his escrow account