Chapter 11 Flashcards
A complete late charge provision must include:
a. the span of any grace period following the due date before a payment becomes delinquent.
b. the amount of the late charge.
c. a requirement for notice from the trust deed holder to impose the late charge and make a demand for its payment.
d. All of the above.
D
An owner of real estate who wants to pay off principal on a debt before it is due may be levied an additional charge by the lender, called a(n):
a. grace period.
b. balloon payment.
c. prepayment penalty.
d. late fee.
C
A(n) ________ is any final payment on a note which is an amount greater than twice the amount of any one of the six regularly scheduled preceding payments.
a. late charge
b. balloon payment
c. usury limit
d. All of the above.
B
Notice of a final/balloon payment must be given to the buyer or current owner ________ before its due date.
a. 30 days
b. 60 days
c. 90 days
d. None of the above.
C
The ________ is the preferential method used to impose a lien on real estate.
a. promissory note
b. trust deed
c. due-on clause
d. Notice of Nonresponsibility
B
On the sale of a parcel of real estate, existing financing encumbering the property may be taken over by a buyer under a:
a. formal assumption between the lender and the buyer.
b. subject-to assumption between the seller and the buyer.
c. a subject-to transfer of ownership without an assumption agreement of any type.
d. All of the above.
D
When the lender enters into an agreement with both the buyer and seller for the buyer’s assumption of the loan and a release of the seller’s liability, this is known as a:
a. substitution of liability.
b. novation.
c. Both a. and b.
d. Neither a. nor b.
C
The occurrence of an event which triggers due-on enforcement automatically allows the lender to call the loan, also known as:
a. waiver by consent.
b. acceleration.
c. recasting.
d. subordination.
B
The due-on clause is triggered not only by a transfer using a standard grant deed, but by any conveyance of equitable ownership of real estate, such as a(n):
a. land sales contract.
b. lease option sale.
c. all-inclusive trust deed (AITD).
d. All of the above.
D
An owner may ________ by paying all sums due under the note and trust deed and reimbursing the lender’s costs of foreclosure, prior to completion of the trustee’s sale.
a. redeem property in foreclosure
b. subordinate the lender’s interest
c. initiate foreclosure
d. None of the above.
A
