Ch 12 - Residential mortgages Flashcards
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
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.
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
True or false,
For every discount point Purchased, the lenders yield increases by 1/8 of a percent
True
True or false, Florida is a title theory state
False
Florida is a lien theory states
True or false, A contract for deed is also called a land contract
True
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
True or false, The acceleration clause calls the entire balance of the loan do if the borrower defaults on the loan.
True
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.
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
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.
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
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
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
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
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
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
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%
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.
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
