Chapter 15 Flashcards
Which clause in a mortgage contract outlines what will happen if the borrower defaults on the loan ?
Acceleration clause
Buyer rich has asked seller sally to hold 15,000$ as a second mortgage. What type of mortgage is rich requesting ?
Purchase money mortgage - is most commonly a technique in which the buyer borrows from the seller in serotonin to the lender.
What is the purpose of points on a mortgage loan ?
To raise the efficiency interest rate on the loan.
How does a borrower use private mortgage insurance ?
A borrower can get a conventional loan with a lower down payment by insuring the loan through a private mortgage insurance .
What type of account holds property insurance , taxes , and mutual mortgage insurance in escrow ?
Impound account
A subdivision developer most likely would apply for what type or loan ?
Blanket loan
What percent equity of the purchase price allows a borrower to request cancellation of PMI?
20%
Although the homeowner protection act requires PMI and to be terminated after all he borrower has accumulate 22% equity in the property , the law also states that a borrower may request PMI cancellation after accumulating 20% equality or the purchase price.
In the event of a default by the purchaser , the lender had the right to bring legal action through the courts to satisfy the debt. This is called ….
A judicial foreclosure
Action brought THROUGH BY THE COURTS
Which of the following is NOT a way in which property is its an existing mortgage can be sold ?
Foreclosure ….
If a house is foreclosed …. you can not sell it
When might a lender be willing to release the original seller from liability in a mortgage assumption ?
The lender renegotiates the loan terms with a buyer …..
The lender raises the interest rate for the buyer ….
The lender charges an assumption fee …..
Which of the following is NOT a due-on-sale clause ?
Pre-payment clause
A due on sale clause is a form of acceleration clause that is also known as an alienation clause , a non assumption clause , a call clause , or a right to sell clause.
A negative amortization cap usually limits the amount to he borrower can owe to ____ or the original loan amount ?
125%
