Chapter 3 Flashcards
A(n) _______________ clause in a note prohibits prepayment and satisfaction of the mortgage debt.
a. advance fee
b. late charge
c. due-on clause
d. lock-in
D
In the context of real estate law, a lock-in clause functions as a(n):
a. mortgage holder’s universal right.
b. restraint on alienation.
c. Both a. and b.
d. Neither a. nor b.
B
The _______________ calls for an additional charge if payment is not received by the mortgage holder when due or within a grace period after which the payment is delinquent.
a. late charge provision
b. lock-in clause
c. choice-of-law provision
d. right of first refusal to buy
A
A complete late charge provision includes:
a. the duration of any grace period following the due date before a payment is considered delinquent.
b. the amount of the late charge.
c. a requirement for notice from the mortgage holder to impose the late charge and make a demand for its payment.
d. All of the above.
D
Reasonable monetary losses collectible as a late charge include:
a. the actual out-of-pocket expenses incurred in a reasonable collection effort.
b. the lost use of the principal and interest (PI) portion of the delinquent payment until paid.
c. Both a. and b.
d. Neither a. nor b.
C
The late charge on any mortgage not made or arranged by a broker and secured by an owner-occupied single family residence (SFR) is limited to the greater of $5 or:
a. 6% of the delinquent principal and interest installment.
b. 10% of the delinquent principal installment.
c. 8% of the delinquent interest installment.
d. None of the above.
A
A(n) _______________ is any final payment on a mortgage more than twice the amount of any of the six regularly scheduled payments immediately preceding the final payment date.
a. late payment
b. redemption payment
c. prepayment
d. final/balloon paymen
D
A final/balloon payment notice needs to be delivered at least _______ days, but not more than ________ days, before the due date.
a. 90; 150
b. 150; 90
c. 80; 20
d. 70; 30
A
To secure payment of the debt by a parcel of real estate, the security device used is a(n):
a. promissory note.
b. trust deed.
c. ball and chain.
d. None of the above.
B
The _______________, such as a mortgage holder or carryback seller, is the person entitled to performance of the promised activities referenced in the trust deed.
a. trustee
b. beneficiary
c. payor
d. None of the above.
B
