Chapter 14: Finance

Question 1

What consists of a land contract or installment sale?

Answer 1

an agreement in which the purchaser makes a down payment, receives possession and makes monthly payments to seller

Question 2

What is required of a buyer in a land contract?

Answer 2

a promise to get the full title when payment is complete and receives equitable title

Question 3

What is disintermediation?

Answer 3

When other investments look more attractive, withdrawal of funds by depositors in favor of other investments

Question 4

What is the annual percentage rate?

Answer 4

the total finance charge expressed as a percentage of interest

Question 5

What is the total interest paid?

Answer 5

compares the amount borrowed to the total interest paid

Question 6

What is a unreasonable impounds?

Answer 6

lender may collect amount necessary plus a cushion of 2 additional months

Question 7

What is involved in the Truth in Lending Act?

Answer 7

gives consumers an opportunity to compare the costs of borrowing before committing to one lender

Question 8

What is involved in TRID? (truth in lending/real estate settlement procedure act integrated disclosure)

Answer 8

combined duplicate disclosures in TILA and RESPA. sets strict time limits for delivery of the disclosures