Chapter 12 - Principles of Real Estate Financing Flashcards
Charging more interest than is legally allowed is known as …
-usury
A mortgagor is the one who …
Borrows Money
A promissory note …
is the primary evidence of a debt.
The finance fee charged by the lender to make the loan is
a loan origination fee
The interest paid by the borrower at the settlement table to cover the period of time until the first payment is due is called …
-simple interest
If the amount realized at a sheriff’s sale as part of a mortgage foreclosure is more than the amount of the indebtedness and expenses, then the excess belongs to the …
-mortgagor
After a borrower makes the final payment on a home mortgage, the lien remains on the property until the lender records …
-a satisfaction of mortgage
An existing mortgage loan can have its lien priority lowered by a
-subordination agreement
If the quarterly interest at 10.5 percent is $3,150 the principle amount of the loan is
$120,000
If a property sold as mortgage foreclosure does not sell for an amount sufficient to satisfy the outstanding mortgage debt, the mortgagor may be responsible for
-deficiency judgement
The clause in a mortgage that permits the lender to declare the entire unpaid balance immediatley due and payable upon default is the
-acceleration clause
When a mortgage loan has been paid in full, it is important for the borrower to be sure that
-a satisfaction of mortgage is recorded
A deed of trust differs from a mortgage in all of the following EXCEPT
- the number of parties involved in the loan
- the obligation of the borrower to repay the funds
- the redemption rights allowed after foreclosure
- the time period permitted to cure a default
-the obligation of the borrower to repay the funds
A person who assumes an existing mortgage loan is
personally responsible for paying the principle balance
The interest in a property held by the owner in excess of any liens against it is called …
-equity
The mortgagee foreclosed on a property after the borrower defaulted on the loan. At the foreclosure sale, however, the house sold for only $29,000. The unpaid balance of the loan at the time of the sale was $40,000. What must the lender do to recover the $11,000 the borrower still owes?
-Seek a deficiency judgement
The right a mortgagor has to regain the property by paying the debt after a foreclosure sale is called
-redemption
The clause in a mortgage instrument that would prevent the assumption of the mortgage by a new purchaser is a
-due on sale clause
The defeasance clause in a mortgage requires the mortgagee to execute
-a satisfaction of mortgage
A “friendly foreclosure” enables a mortgagor to prevent the mortgagee from taking the property by statutory means. This can be accomplished by
-a deed in lieu of foreclosure
In absence of an agreement to the contrary, the mortgage having priority will be the one
-that was recorded first.
The pledging of property as a security for payment of a loan is
-hypothecation
A mortgage broker generally offers which service?
Bringing the borrower and the lender together
A borrower obtained a $7,000 second mortgage loan for five years at 6 percent interst per annum. Monthly payments were $50. The final payment included the remaining outstanding principle balance. What type of loan is this?
-Partially amortized
The principle distinction between the primary mortgage market and the secondary mortgage market is in the…
origination versus the purchase of mortgage loans
A real estate loan payable in periodic installments that are sufficient to pay the principal in full during the term of the loan is called
-an amortized loan
If the amount of a home equity loan is $13,500 and the interest is 7.5 percent, what is the amount of the semiannual interest payment?
$506.25
The supply of mortgage money for single-family homes is regulated by the Federal Reserve System through which of the following?
- Reserve requirements and discount rates
- Federal National Mortgage Association
- Federal Housing Administration
- Department of Housing
-Reserve requirements and discount rates
Last month’s loan payment included $412.50 interest on a $60,000 loan balance. What is the annual rate of interest?
8(1/4) percent
The purpose of a mortgage is to
provide security for the loan
