Chapter 13 – Introduction to Mortgage Law

Question 1

______ are groups or individuals whose current net income exceeds current expenses, whereas ______ are groups or individuals with expenses greater than their income in that period.

Answer 1

Savers; borrowers

Question 2

A mortgage taken back by the seller from the purchaser to facilitate a sale, whereby the seller becomes the mortgagee and the purchaser becomes the mortgagor, is referred to as a(n) _______.

Answer 2

seller take-back mortgage

Question 3

The registration of a(n) ______ in the land title office grants an interest in land to the lender as security for the repayment of the debt.

Answer 3

mortgage

Question 4

A mortgage that allows a buyer to assume or take over the responsibilities and liabilities under the mortgage from the seller (original borrower) is called a(n) ________.

Answer 4

assumable mortgage

Question 5

A(n) _______ is a person who becomes contingently or secondarily liable for another’s debt or performance.

Answer 5

guarantor

Question 6

The spending of capital today to receive benefits in the future is called a(n) _______.

Answer 6

investment

Question 7

What does “right to prepay” mean in the context of a mortgage?

Answer 7

Where a borrower seeks to pay a substantial amount or the entire amount owing on the mortgage prior to the expiration of the mortgage term

Question 8

The power of sale is a provision that gives the mortgagee the right to _______ upon default by the mortgagor.

Answer 8

enter the premises and sell the mortgaged premises

Question 9

_______ is a type of interim financing whereby a borrower will receive a loan and grant a mortgage to a lender for a short period of time while long-term financing is being pursued.

Answer 9

Bridge financing

Question 10

What is foreclosure?

Answer 10

The action to remove the mortgagor’s and subsequent encumbrancers’ equity of redemption