Chapter 12 (Residential Mortgages / Math)

Question 1

The instrument that contains the amount of the loan, interest rate, payment provisions, and other terms of the loan is the __________________ __________________ .

Answer 1

promissory note

Question 2

A mortgage is a __________________ __________________ __________________ .

Answer 2

pledge of security

Question 3

The clause in a mortgage that protects the borrower’s interest and requires the lender to acknowledge performance by the borrower is the __________________ clause.

Answer 3

defeasance

Question 4

The clause that allows a parcel of property to be sold free and clear of a blanket mortgage is the __________________ clause.

Answer 4

release

Question 5

A __________________ __________________ is a written agreement in which a lender agrees with the property owner to change the priority of liens.

Answer 5

subordination agreement

Question 6

If a borrower was in default, and the lender wished to call the entire balance of the loan due and payable, the mortgage would have to contain a(n) __________________ clause.

Answer 6

acceleration

Question 7

If a buyer were to take over the balance of an existing mortgage in such a way that the seller remained solely responsible for a deficiency judgment, the property was sold __________________ __________________ __________________ __________________ .

Answer 7

subject to the mortgage

Question 8

When a lender allows a new borrower to take responsibility for a mortgage and note, and releases the original borrower from liability for the mortgage and note, the process is called __________________ __________________ __________________ .

Answer 8

assumption with novation

Question 9

When a lender is requested by a borrower to verify the outstanding balance of a loan, the lender would give the borrower a(n) __________________ __________________ .

Answer 9

estoppel letter

Question 10

The percentage figure borrowers must be provided with that includes all costs associated with a loan is referred to as the __________________ .

Answer 10

APR (Annual Percentage Rate)

Question 11

A __________________ __________________ is a personal debt based on the promissory note.

Answer 11

deficiency judgment

Question 12

The right of a borrower to cure a default prior to foreclosure is called the __________________ __________________ __________________ .

Answer 12

equity of redemption

Question 13

Foreclosure is __________________ of the mortgage.

Answer 13

enforcement

Question 14

A __________________ __________________ is the primary claim on a property which takes precedence over all other subsequent (junior) mortgage claims.

Answer 14

first mortgage

Question 15

__________________ is the difference between the current market value of a property and the amount the owner still owes on the mortgage.

Answer 15

Equity