Chapter 5 Flashcards
An equity purchase (EP) transaction occurs when an owner-occupant transfers title of a one-to-four unit residential property in foreclosure and title to the property is acquired by a buyer for:
a. their primary residence.
b. rental, investment or dealer purposes.
c. Both a. and b.
d. Neither a. nor b.
B
After entering into an equity purchase (EP) sale, a seller-in-foreclosure has a statutory _______________ right to cancel the sales agreement they have entered into with an investor.
a. 20-business day
b. 15-business day
c. ten-business day
d. five-business day
D
In times of _______________, mortgage holders seize any event to trigger the due-on clause in order to increase the interest yield on their portfolio.
a. falling interest rates
b. rising interest rates
c. stable interest rates
d. None of the above
B
A due-on clause may be triggered by a lease:
a. with a term over three years.
b. for any term when coupled with an option to buy.
c. Either a. or b.
d. Neither a. nor b.
C
The due-on clause is not triggered by an owner’s transfer of their one-to-four unit residential property to a _______________ who occupies the property.
a. spouse
b. child
c. Either a. or b.
d. Neither a. nor b.
C
When a written assumption agreement with a mortgage holder involves consumer-purpose financing controlled by Regulation Z (Reg Z), the assumption is subject to:
a. new disclosures by the mortgage holder to the assuming buyer based on the remaining obligation.
b. verification of the assuming buyer’s ability to repay the mortgage based on Reg Z Ability-to-Repay (ATR) rules.
c. Both a. and b.
d. Neither a. nor b.
C
The _______________ is a promise given by the buyer to the seller to perform all the terms of the mortgage the buyer is taking over.
a. buyer-seller assumption agreement
b. formal assumption
c. Both a. and b.
d. Neither a. nor b.
A
Under a(n) _______________, a mortgage holder, buyer and seller agree to shift responsibility for a mortgage obligation to the buyer by an assumption and release the seller of liability.
a. beneficiary statement
b. all-inclusive trust deed (AITD)
c. home equity mortgage
d. novation agreement
D
A buyer of property secured by a VA-guaranteed mortgage is able to take over the mortgage if:
a. the mortgage is current.
b. the buyer assumes the mortgage.
c. the buyer is creditworthy.
d. All of the above.
D
A security device called a(n) _______________ perfects a lien on personal property against later claims.
a. UCC-1 Financing Statement (UCC-1)
b. UCC-2 Change Form (UCC-2)
c. mechanic’s lien
d. All of the above.
A
