Ch. 14 HW (Finance) Flashcards
Seller Bob wants to sell his house as soon as possible. He has an existing low interest loan on the property. The note contains an “alienation clause” which is triggered by a transfer of title. Under these circumstances which of the following is correct?
The lender can refuse to allow an assumption.
An acceleration clause gives the lender the right to:
demand the entire balance owed due and payable upon default.
Stone purchased farm land from Fowler with the idea of developing it. Fowler took part payment in cash and the balance in the form of a note and mortgage. Which of the following clauses did Stone insist on including in the security instrument?
Subordination
Vicki and Steven Barn’s current home is listed with Jack Black of Best Deal Realty. They are selling because they will be retiring and are building a new home at the lake. Although the lake house is under construction, it will not be completed until December.In August, they receive an acceptable offer and the proposed closing date is September 15. The buyer offers to allow the Barns to lease the property after closing until their lake house is completed in December. If the buyer signs a required lender document at closing, confirming occupancy within 30 days, then:
all parties, buyer, seller, and agent are guilty of mortgage fraud.
A trust deed gives the lender a right to request the trustee perform certain tasks in order to fulfill the terms of the trust. The trustee may take action in those circumstances because the trustee holds:
naked title.
Concerning a fully amortized loan, it is correct to say that it is a loan characterized by:
level payments that cover all interest charged and reduce the principal to zero by maturity.
Which of the following loans would be covered by Regulation Z?
A. A loan to purchase a $20,000 car
B. A purchase money mortgage for $125,000 for the purchase of a duplex
C. A loan for $375,000 made for the purpose of purchasing a farm
D. A loan of $215,000 to a builder for construction of a single family residential home
A loan to purchase a $20,000 car
The instrument, which pledges real property as security for a loan, is:
either a mortgage or a trust deed.
One who, in good faith and without knowledge of defect, pays valuable consideration for a note before it is due is referred to as:
a holder in due course.
Just before the sheriff begins the auction sale of foreclosed property, the delinquent borrower offers to pay the outstanding debt and all costs incurred because of the default. In such case:
the borrower may pay the judgment and reclaim the property under equitable rights of redemption.
When a borrower pays off a note that was secured by a deed of trust, then:
the trustee issues a deed of reconveyance to the borrower.
Straight-term loans are generally:
shorter in duration than amortized loans.
Broker Baxter was asked by a purchaser to explain a budget mortgage. Baxter’s best answer would have been:
a mortgage with payments including taxes and insurance.
A subdivision developer obtained a construction loan to build new houses on twenty lots. What type of clause might be required in the security instrument for the construction loan?
Partial release
“Fannie Mae” and “Freddie Mac” are:
secondary markets for mortgages.
