Chapter 15 Mortgages Flashcards
Which of the following correctly complete the phrase: “A mortgage is …”
A. a contract.
B. evidence of a loan.
C. security for a loan.
D. required to be registered to be effective between the parties.
(1) Only A, B and D correctly complete the phrase.
(2) Only A, B and C correctly complete the phrase.
(3) Only A and C correctly complete the phrase.
(4) All of the above correctly complete the phrase
2
An option to purchase the mortgaged property given by the borrower to the lender at the time the mortgage is negotiated is:
(1) enforceable if the borrower has independent legal advice.
(2) void.
(3) enforceable in all cases.
(4) a collateral advantage.
2
Which one of the following is NOT an implied term of a mortgage?
(1) The borrower is entitled to redeem the mortgage within a reasonable time.
(2) The borrower is entitled to redeem the mortgage free from all conditions or terms of the mortgage contract.
(3) The borrower is entitled to assign the mortgage.
(4) The borrower is free from any unreasonable collateral advantage required by the lender.
3
Alexander Management Company Limited has just arranged a $1,450,000 mortgage loan to finance their purchase of a small retail shopping complex. The interest rate is 12.75% per annum compounded semi- annually; the amortization period is 20 years and the term of the loan is 10 years. Payments are to be made quarterly and rounded up to the next higher dollar. Which one of the following statements is FALSE with regard to this contract?
(1) The quarterly payment will be $49,701.
(2) The outstanding balance at the end of the term will be less than $1,123,500.
(3) Under the terms of the Canada Interest Act, the total outstanding balance on this loan can be prepaid at any time after five years from the initiation date of the mortgage.
(4) The lender has no right to demand payment of the total outstanding balance at any time prior to the end of the contractual term provided the borrower meets all contractual obligations.
3
Under the BC land title system, a mortgage is registered as a charge against the property of which the mortgagor is:
(1) the first registered charge holder.
(2) the last registered charge holder.
(3) the registered owner.
(4) not registered.
3
A Court has power to re-open a mortgage transaction where, having regard to the risk and to all the circumstances, it is of the opinion that the cost of borrowing is excessive or harsh and unconscionable. In which one of the following statutes is this power contained?
(1) Interest Act
(2) Mortgage Brokers Act
(3) Real Estate Services Act
(4) Consumer Protection Act
4
Which one of the following is NOT a provision of the Interest Act?
(1) No interest rate higher than 25% shall be provided for in a mortgage document.
(2) Where a mortgage requires blended payments of principal and interest, the mortgage document must contain a statement of the interest rate calculated “yearly or half-yearly not in advance”.
(3) If a mortgage document calls for interest without specifying the rate, then the rate of interest specified by law is 5% per annum.
(4) The interest rate on arrears under a mortgage may not exceed the rate payable on the principal monies not in arrears.
1
An option to purchase the mortgaged property given by the mortgagor to the mortgagee at the time the mortgage is negotiated is:
(1) enforceable if the mortgagor has independent legal advice.
(2) void.
(3) enforceable in all cases.
(4) none of the above.
2
Where a borrower believes that the amount of interest being charged is excessive, under which statute might relief be granted?
(1) the Interest Act
(2) the Business Practices and Consumer Protection Act
(3) the Land Titles Act
(4) all of the above
2
Which of the following statements about federal legislation governing mortgage interest rates is TRUE?
(1) The Interest Act requires that the rate of interest chargeable under a mortgage be “reasonable”, in the prevailing market for funds.
(2) The Criminal Code defines a criminal rate of interest as an effective annual rate in excess of 50%.
(3) Section 10 of the Interest Act creates the right to tender prepayment of a mortgage after 5 years provided that the borrower is not a corporation, and the mortgage is not for a business purpose.
(4) The Interest Act provides that if a mortgage agreement does not specify the rate of interest chargeable, the rate allowed by law is 5%
4
A collateral advantage given with a mortgage will be declared unenforceable by the courts if:
(1) it is unfair or oppressive.
(2) it is in the nature of a penalty.
(3) it is unduly restrictive.
(4) any of the above applies.
4
Which of the following statements concerning mortgages is FALSE?
(1) A mortgage is a loan.
(2) A mortgage is an interest in land created by contract.
(3) The relationship of the parties to a mortgage is that of debtor and creditor.
(4) At common law a first mortgage transferred legal title to the mortgagee.
1
Which of the following statements regarding the effect of registration of a mortgage in a BC land title office is TRUE?
(1) The registration of a mortgage in the land title office is conclusive evidence that the mortgagee is entitled to an interest in the land described in the mortgage document.
(2) A mortgage which is not registered in the land title office is unenforceable against the parties to the mortgage.
(3) Registration of a mortgage raises only a rebuttable presumption that the mortgage is valid; a registered mortgage is not “guaranteed” under the BC land registration system.
(4) None of the above statements is true.
3
which of the following most correctly completes the phrase.. a mortgage is
- a contract, evidence of a loan, and required to be registered to be effective between the parties
- a contract, evidence of a loan, and security for a loan
- a contract and a loan
- a contract, evidence of a loan, security for a loan, abd required to be registered to be effective between the parties
2
under the environmental management act, a mortgage lender may be liable for the remediation of a contaminated site if the lender
- participates only in purely financial matters related to the site
- insists on environmental conditions within a security agreement
- becomes the registered owner of a site
- appoints a person to inspect a contaminated site to determine future actions to take
3
