Ch 40 - 56 Flashcards
A permanent long-term mortgage loan that is not government-backed is a
personal loan.
conventional loan.
primary loan.
commercial loan.
conventional loan.
To be eligible for an FHA-insured loan, a property must be
no more than ten years old.
built by FHA-approved contractors.
under 2500 square feet in living area.
appraised by an FHA-approved appraiser.
appraised by an FHA-approved appraiser.
appraised by an FHA-approved appraiser.
Norm is buying a furnished condo in Chicago. Which type of mortgage is specifically designed for property and contents?
All Inclusive Mortgage
Package Mortgage
Short Sale Mortgage
Wrapped Mortgage
Package Mortgage
Package mortgage is best
Loan ____ is the lender’s process of assessing risk in giving a loan
Underwriting
Loan underwriting is the lender’s process of assessing risk in giving a loan
The ____ ratio establishes borrowing capacity by limiting the percent of gross income a borrower may spend on housing costs.
Income ratio
The income ratio establishes borrowing capacity by limiting the percent of gross income a borrower may spend on housing costs.
A _____ rate guarantees the borrower a specific loan rate for a specific amount of time like 5 or 10 days for so long as they fund during that same time period.
Lock in
A “lock-in” rate guarantees the borrower a specific loan rate for a specific amount of time like 5 or 10 days for so long as they fund during that same time period.
The Equal Credit Opportunity Act protects against discrimination in all of the following areas EXCEPT
physical handicap.
religion.
age.
color.
physical handicap.
RESPA requires that a lender, within three days of receiving the loan application, must give a borrower
a HUD Uniform Settlement Statement.
an itemized bill for all settlement costs.
a Loan Estimate form.
a copy of the full text of the law.
a Loan Estimate form.
Lender must give loan estimate form within 3 days
What does a demand feature mean in a mortgage loan?
A demand feature would not allow the lender to require early repayment.
A demand feature would allow the lender to require early repayment.
A demand feature would allow the borrower to make an early repayment with a penalty.
A demand feature would allow the borrower to shorten the life of the loan by making double monthly payments.
A demand feature would allow the lender to require early repayment.
What is typically deposited into a mortgage loan escrow account?
Out-of-pocket money to be paid by the buyer at closing
Money held for certain future payments, such as insurance and taxes
Money required to pay for broker compensation.
Money for loan service fees
Money held for certain future payments, such as insurance and taxes
Money that is held or impounded in a loan escrow account can be used to make property tax and homeowners insurance payments.
Which of the following statements best describes the term “consummation” as defined under Regulation Z?
The time that a consumer becomes contractually obligated on a credit transaction
The window of time that a consumer has to a accept or reject a credit transaction
The amount of time that a mortgage loan is viable
Three business days prior to acceptance of the loan
The time that a consumer becomes contractually obligated on a credit transaction
“Consummation” is the time when a consumer becomes contractually obligated to start making future payments on a loan.
On a mortgage Loan Estimate, how are loan amounts and interest rates that might be changed after the closing indicated?
Check marks
Fill in the blanks
Yes or no statements
Plus or minus marks
Yes or no statements
The potential loan amount and interest rate changes are indicated by “yes” or “no” statements.
In what type of foreclosure does a lender give a borrower a notice of default in a form prescribed by the state?
Judicial foreclosure
Strict foreclosure
Standard foreclosure
Non-judicial foreclosure
Non-judicial foreclosure
The notice of default is the official starting point for a non-judicial foreclosure that’s generally handled outside of a courtroom.
T/F: If a bankruptcy proceeding begins before a foreclosure proceeding, the foreclosure proceeding is delayed until completion of the bankruptcy process.
The foreclosure action will be stayed, or delayed, until the completion of the bankruptcy filing and discharge.
In what type of foreclosure is the lender required to file suit asking a court to order the borrower to pay the mortgage debt by a certain date or the lender will automatically gain full title to the property?
Standard
Judicial
Strict
Non-judicial
Strict
A lender would be required to file a Strict foreclosure action.
Does a deed in lieu of foreclosure require public notice?
No
It avoids public notice of the foreclosure.