Brainscape's Knowledge GenomeTM

Browse over 1 million classes created by top students, professors, publishers, and experts.


See full index

NMLS Kim > Chapter 3 Introduction to Mortgage Lending > Flashcards

Chapter 3 Introduction to Mortgage Lending Flashcards

1
Q

Which of the following is not true about a mortgage note?
A. The note is not recorded
B. The APR is on the note
C. All borrower and co-borrowers must sign the note
D. The note is legal evidence of the debt

A

Answer: B

The annual percentage rate (APR) is not on the note.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
2
Q

Which of the following is not true about a mortgage note?
A. The note is not recorded and APR is not listed on note
B. The note is recorded and The APR is on the note
C. All borrower and co-borrowers must sign the note
D. The note is legal evidence of the debt

A

Answer: A

The annual percentage rate(APR) is not on the note. The note is the legal evidence of the debt and is notrecorded.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
3
Q 
The pledging of property as collateral for a loan:
A.  Defeasance
B.  Hypothecation
C.  Exculpation
D.  Intermediation
A

B
Hypothecation occurs when an asset is pledged as collateral to secure a loan, without giving up title, possession, or ownership rights, such as income generated by the asset

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
4
Q

Which of the following is true of recording time on a mortgage?
A. It plays a role in the lien priority of Junior Mortgages
B. It plays a role in lien priority of Mortgages
C. It determines when the payoff must be paid
D. It determines the position for all lien priorities

A

Answer: A
It only determines the priority of Junior liens because Primary liens, Government expenses of sale, Delinquent property taxes, Special assessment liens, and Federal estate tax lien will always come before Junior Loans.

The date and time of recording establish lien position of the mortgage.
Lien Position determines the order in which lien holders are paid when the property is sold.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
5
Q 
What establishes the lien position?
A.  Date and time of signing
B.  Date and time the loan was approved
C. Date and time of recording
D.  Date and time of the title search
A

Answer: C
The date and time of RECORDING establish lien position of the mortgage. Lien Position determines the order in which lien holders are paid when the property is sold.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
6
Q

Mortgagors are responsible for certain promises, and are in default if they fail to do which of the following?
Who of the following is considered default if borrowers fail to pay?
A. Repay loan, interest rate, and keep property in good repair
B. Property, hazard and title taxes
C. Repay loan, property tax, hazard insurance and keep property in good repair
D. Hazard, Flood and Mortgage Insurance (PMI)

A

C

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
7
Q 
Junior mortgages are:
A.  Involuntary liens
B.  Limited to 30 year terms
C. Limited to a total of 2
D.  Voluntary lien
A

A mortgage is a voluntary lien; special assessments and mechanic’s liens are involuntary liens.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
8
Q 
Which of the following are voluntary liens?
A. Subordinate Liens
B. Special Assessment
C. Mechanics Lien
D. None
A

Answer:A
subordinate lien is a Junior or second mortgage. A mortgage is a voluntary lien; special assessments and mechanic’s liens are involuntary liens.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
9
Q

Tom had been in an accident and was in traction and unableto work and unable to pay his mortgage until he gets his settlement. What should Tom do?
A. Not pay the mortgage until he received the money
B. File for bankruptcy
C. Ask for a forbearance from his lender
D. Call his mortgage broker to delay the payments

A

C

Forbearance is the choice by the lender not to take action even though the borrower is in default of the loan.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
10
Q 
A notice which is filed when the lender files a foreclosure lawsuit is known as a 
A. Deed in liu
B. Mechanics Lien
C. Lis Penchant
D. Lis Pendens
A

Answer D

lis pendens is a notice filed by the lender when it initiates a foreclosure
lawsuit.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
11
Q 
lis pendens is a notice filed by the lender when it initiates a foreclosure
lawsuit is a part of?
A. Lien Theory
B. Title Thory
C. Mortgage Acceleration Clause
D. Forebearance
A

Answer: A (lis = lien)

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
12
Q 
Lis Pardens is also known as a
A. Acceleration clause
B. Mortgage due on Sale
C. Notice of default
D. equitable right of redemption
A

C

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
13
Q 
Tom had been in an accident and was in traction and unable to work and unable to pay his mortgage until he gets his settlement.  Tom settlement came through and h received a large sum that can pay off the house. What should Tom do to keep his home?
A. Ask for forbearance
B. Equitable right of redemption
C. Deficiency Judgement 
D. Mortgage Acceleration
A

Answer B

equitable right of redemption allows the mortgagor in default to pay
the entire balance due and keep the property from being foreclosed.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
14
Q 
Kathy has just got her home foreclosed. However, the proceeds are not sufficient to pay off her negative equity home. Which of the following can the lender file against Kathy?
A. mortgage due-on-sale clause
B. Mortgage Acceleration Claus 
C. Mortgage Pre-Penalty 
D. Deficiency Judgement
A

D

deficiency judgment allows the lender to claim other assets from the
borrower when the proceeds of the foreclosure sale are insufficient to satisfy the mortgage lien.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
15
Q 
John had defaulted on his loan and now the lender had requested the whole mortgage balance due immediately, this is known as
A. Mortgage Acceleration 
B. Equity Skimming
C. mortgage due-on-sale clause 
D. defeasance clause
A

Answer: A
Mortgage Acceleration is when the lender demands payment in full due to default. Due on sales clause is when so,done refinances a different loan, the amount is due when that loan changes or is sold

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
16
Q 
Which of the following requires the lender to send a Satisfaction of Mortgage notice to the borrower within sixty days of paying off the loan?
A. Due on Sale Clause
B. exculpatory clause
C. defeasance clause
D. open-end clause
A

Answer: C
The mortgage defeasance clause prevents the lender from foreclosing unless the borrower is in default. It also requires the lender to send a Satisfaction of Mortgage notice to the borrower within sixty days of paying off the loan.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
17
Q 
Which of the following can stop the deficiency Judgement?
A. Lis Pardens
B. Exculpatory Clause
C. Deed in liu
D. Defeasance Clause
A

Answer: B.
mortgage exculpatory clause prevents the lender from requesting a deficiency judgment against the borrower when the proceeds of the
foreclosure are insufficient to pay off the mortgage lien.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
18
Q 
Which is the opposite of the pre-payment penalty Clause?
A. Defeasance Clause
B. Pre-payment privilege 
C. Mortgage privilege 
D. Open-End Clause
A

Answer B
mortgage prepayment privilege clause allows the borrower to pay all or part of the loan before it is due without penalty.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
19
Q 
Which of the following permits future additional advances from
the same loan?
A. Blanket Mortgage 
B. Advance Loan 
C. Mortgage Privilege 
D. Open-End Clause
A

Answer: D

The mortgage open-end clause permits future additional advances from the same loan.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
20
Q

A blanket mortgage covers multiple tracts of land.
A builder, for example, would use what to pay for construction of several homes in one neighborhood.
A. Retired home clause
B. Piggyback loan
C. Partial Release Clause
D. Blanket Mortgage

A

D

21
Q 
A mortgage lien on an entire tract of land is known as a:
A.  Buy-down mortgage
B.  Chattel mortgage
C.  Blanket mortgage
D.  Pillow mortgage
A

C

22
Q 
A builder would like to get a Loan that will allow the portion of the mortgage that was used to fund that home is paid back to the lender when a home is sold and then retired is known as a
A. Retired home clause
B. Piggyback loan 
C. Partial Release Clause
D. Partial Loan
A

Answer: C

Partial release clause in a blanket mortgage allows the developer’s lien to be released as the parcel is sold.

23
Q 
A partial release clause is part of which of the following?
A. Residential Loan
B. Construction loan
C. Blanket loan
D. Closed End Loans
A

Answer C

A blanket mortgage contains partial release clause

24
Q 
An individual with power of attorney who is able to sign the contract if one of the parties is not able or competent to sign.
A. Assignor
B. Assignee
C. attorney-in-fact
D. Grantor
A

Answer: C
An attorney-in-fact is an individual with power of attorney who is able to sign the contract if one of the parties is not able or competent to sign.

25
Q 
The conveyor of the deed is the:
A.  Grantor
B.  Lender
C.  Grantee
D.  Mortgagor
A

Answer A

The grantor is the conveyor of the deed

26
Q 
The receiver of the deed is the:
A.  Grantee
B.  Grantor
C.  Mortgagee
D.  Assignee
A

Answer A

The grantee is the party receiving the title transfer.

27
Q 
A Grantor is a person who is the?
A. conveyor of the deed
B. receiver of the deed
C. Transfer Contract rights
D. Receive contract rights
A

A

28
Q 
The party transferring the contact or rights to another is known as the 
A. Assignor
B. Assignee
C. attorney-in-fact
D. Grantor
A

Answer A

The assignor is the party transferring contractual rights to another.

29
Q 
The assignor:
A.  Transfers contract rights
B.  Receives contract rights
C.  Must be a United States citizen
D. Must be an attorney
A

Answer A

The assignor is the party transferring contractual rights to another.

30
Q 
Which of the following is the party receiving the contractor rights?
A. Assignor
B. Assignee
C. attorney-in-fact
D. Grantor
A

Answer: b

The assignee is the party receiving the contractual rights.

31
Q 
The owner of the property is the 
A. Assignor
B. Assignee
C. Grantor
D. Grantee
A

C

The grantor is the owner of a property.

32
Q 
Who receives the title transfer?
A. Assignor
B. Assignee
C. Grantor
D. Grantee
A

Answer: D

The grantee is the party receiving the title transfer.

33
Q 
A written instrument used to convey title or the transfer of ownership from the original owner (grantor) to the new owner Is know as a 
A. Deed
B. Lien
C. Title
D. Security Instrument
A

Answer A

A deed is a written instrument used to convey title or transfer ownership.

34
Q 
Which of the following cannot be discriminatory and are said to “run withthe land,” which means they continue indefinitely?
A. Construction Loan
 B. Deed Restrictions 
C. Deed in Liu
D. Deed of Covenant
A

B

Deed restrictions may be placed in the deed and control the use of the property.

35
Q 
When the mortgagor voluntarily conveys the deed to the lender in exchange for satisfaction of the debt is known as 
A.  Exculpatory Clause
 B. Deed Restrictions 
C. Deed in Liu of foreclosure
D. Deed of Covenant
A

Answer C
Deed in Lieu of Foreclosure occurs when the mortgagor voluntarily
conveys the deed to the lender in exchange for satisfaction of the debt.

36
Q 
Which of the following is the most desirable form of real estate?
A. Fee Simple
B. Life Estates
C. Leasehold Estates
D. Tenancy Estates
A

Answer: A
Fee simple is the highest type of personal property interest in the law. A buyer owns the land as well as the improvements on the land.

37
Q

Which of the following is true of Fee Simple Estates?
A. Last only for the owner’s lifetime and then reverts back to the grantor or to named third parties
B. purchasing the land, the structures on the land, but air and mineral rights belongs to the government
C. The owner must abide by state and federal regulations including zoning, condemnation, health and building codes and taxation.
D. The owner has full control including including zoning, condemnation, health and building code

A

Answer C
Fee Simple ownership represents absolute ownership of real property (ascompared to leasehold estates, which involve a tenancy). However, even though the property is owned outright, the owner must abide by state and federal regulations including zoning, condemnation, health and building codes and taxation.

38
Q 
Which of the following is when each owner owns 100% of the Property?
A. Tenancy in Common
B. Joint Tenancy
C. Tenancy in Entirety
D. None
A

C

39
Q 
Which of the following allows inheritance?
A. Tenancy in Common
B.  One owner tenancy
C. Tenancy in Entirety
D. None
A

B

40
Q 
Which of the following has a right of survivorship (no inheritance)?
A. Tenancy in Common
B.  One owner tenancy
C. Tenancy in Entirety
D. None
A

C

41
Q 
Tenancy in Common does NOT have:
A.  Equal or unequal ownership
B.  Buy at same or different times
C.  Multiple owners
D.  Right of survivorship
A

D

42
Q 
Tenancy in Entirety does NOT have:
A.  Equal ownership
B.  Right of survivorship
C.  Only one individual’s name on title
D.  Buy at same time
A

C

43
Q 
Which of the following allows a purchaser to share liability with the previous owner and without the qualifications of the lender?
A. Straw buyer
B. Assumption
C. Co-buyer
D. Novation
A

Answer: B
Assumption is when the purchaser may take over the mortgagor’s monthly mortgage payments with the knowledge, but without the qualification, of the lender.

44
Q 
When two parties are in an assumption, which of the following allows the original borrower to be released from all liabilities?
A. Straw buyer
B. Assumption
C. Co-buyer
D. Novation
A

Answer D

Novation is an assumption in which the original borrower is released from all liability.

45
Q 
When there is a new note and the original borrower is released from allliability, this is known as transferring title by:
A.  Creative financing
B.  Assumption
C.  Novation
D.  Subject to the mortgage
A

Answer C

Novation is an assumption in which the original borrower is released from all liability.

46
Q 
What is a transfer of title in which there is no new note and the original buyer retains all the liability?
A. Assumption 
B. Novation
C. Subject to the Mortgage
D. Lis Pardens
A

Answer: C
Subject to the mortgage is a transfer of title in which there is no new note and the original buyer retains all the liability.

47
Q 
Which is NOT a promise by the mortgagor
A. Keep the home in good repair
B.  Obey all state and county laws
C.  Pay the hazard insurance
D. Pay the mortgage payment
A

B

48
Q 
The document conveying title from one party to another and guaranteeing that the title is good is known as a:
A.  Good Faith
B.  Warranty Deed
C.  Usury limit
D.  Red Flags document
A

B

NMLS Kim (11 decks)

Brainscape helps you reach your goals faster, through stronger study habits.
© 2024 Bold Learning Solutions. Terms and Conditions