Chapter 11 Flashcards
To qualify for private mortgage insurance (PMI), the borrower needs to:
a. be a natural person, not a corporation, partnership or limited liability company (LLC).
b. take title as the vested owner of the property.
c. Both a. and b.
d. Neither a. nor b.
C
The maximum rate of interest which can be charged on a non-exempt loan secured by real estate is the greater of:
a. 5% per year or the discount rate of the Federal Reserve Bank of San Francisco (FRBSF), plus 5%.
b. 5% per year or the discount rate of the FRBSF, plus 10%.
c. 10% per year or the discount rate of the FRBSF, plus 5%.
d. 10% per year or the discount rate of the FRBSF, plus 10%.
C
These two basic classifications of loan transactions exist relating to interest rates lenders may charge on real estate loans:
a. exempt and brokered.
b. exempt and unbrokered.
c. brokered and restricted.
d. unbrokered and restricted.
C
The discount rate used to calculate the usury threshold rate for mortgages agreed to during a particular month is the Federal Reserve Bank of San Francisco (FRBSF) rate for the _____ day of the previous month.
a. 1st
b. 10th
c. 15th
d. 25th
D
The most common penalty imposed on a non-exempt lender in violation of usury law is:
a. quadrupled damages.
b. the forfeiture of all interest on the mortgage.
c. a three year prison sentence.
d. None of the above.
B
The most common penalty imposed on a non-exempt lender in violation of usury law is:
a. quadrupled damages.
b. the forfeiture of all interest on the mortgage.
c. a three year prison sentence.
d. None of the above.
B
An attorney arranging a loan without also being licensed as a broker:
a. qualifies for exemption from usury laws.
b. does not qualify for exemption from usury laws.
c. will be expelled from the State Bar of California.
d. is subject to a forfeiture of all interest paid on the mortgage.
B
______________ are not subject to the interest limitations of usury laws.
a. The forbearance of rights on the default of a money loan
b. The origination of a mortgage
c. The refinance of an existing mortgage
d. Credit sales
D
A lender may exempt its mortgages from the limitation on interest rates imposed by usury laws by:
a. retaining a licensed real estate broker to arrange the mortgage.
b. becoming licensed as a real estate broker itself.
c. Either a. or b.
d. Neither a. nor b.
C
______________ occurs when a mortgage holder exploits an element of oppression or surprise to exact unreasonably favorable terms from the opposing person.
a. Waste
b. Unconscionable advantage
c. A short payoff
d. None of the above.
B
