Chapter 14 Flashcards
A(n) _______________ in a trust deed authorizes a mortgage holder to accept partial payments to reinstate a mortgage without waiving its right to foreclose if a delinquency remains.
a. waiver clause
b. non-waiver clause
c. reinstatement clause
d. final/balloon payment clause
B
A mortgage holder accepting regular installment payments from an owner after declaring a default which cannot be cured by a reinstatement:
a. waives its right to foreclose based on that default.
b. does not waive its right to foreclose based on that default.
c. may only accept a conditional tender of funds.
d. None of the above.
A
Under a(n) _______________, an owner of property conveys their property to a mortgage holder in exchange for the cancellation of a debt.
a. land sales contract
b. lease-option sale
c. deed-in-lieu
d. deed absolute
C
On recording a deed-in-lieu, a(n) _______________ needs to be issued to assure the mortgage holder that the title conveyed to them is clear of liens which may have been recorded after the mortgage holder’s trust deed was recorded.
a. quit claim deed
b. title insurance policy
c. E&O policy
d. hazard insurance policy
B
An owner who defaults on a mortgage is more inclined to agree to deliver a deed-in-lieu of foreclosure when their gross equity in the property is:
a. less than 10% of the property’s current fair market value (FMV).
b. greater than 20% of the property’s current fair market value (FMV).
c. less than 50% of the property’s current fair market value (FMV).
d. greater than 30% of the property’s current fair market value (FMV).
A
Attorney fees are collectible in an action for judicial foreclosure:
a. on an owner’s reinstatement of a mortgage prior to the foreclosure decree.
b. on completion of the judicial foreclosure.
c. Either a. or b.
d. Neither a. nor b.
C
In the instance of a judicial foreclosure, attorney fees are fixed at the notice of default (NOD) fee schedule for reinstatement until entry of the:
a. lis pendens.
b. foreclosure decree.
c. future advances provision.
d. Both a. and b.
B
Accrued interest paid on a mortgage which funded a person’s trade or business activities, may be written off as a(n) _______________ of the person’s business.
a. operating expense
b. tax advancement
c. personal expense
d. equity reduction
A
Points paid to a lender to originate a mortgage are considered _______________ since interest has not yet accrued.
a. nominal interest
b. life-of-loan accrual
c. prepaid interest
d. None of above.
C
When a mortgage is secured solely by property other than the residence purchased or improved with the mortgage funds, such as business or rental property owned by the homeowner, the points are:
a. deducted in the year they are paid.
b. deducted over the life of the mortgage.
c. Either a. or b.
d. Neither a. nor b.
B
