Chapter 6 Flashcards
Seller financing, also called a(n) _______________, involves carrying back a mortgage in favor of the seller for the unpaid portion of the sales price on closing.
a. installment sale
b. credit sale
c. owner-will-carry (OWC) sale
d. All of the above.
D
Legally, a(n) _______________ provide the most certainty and are the most universally understood of the various documents used to structure seller financing.
a. note and trust deed
b. lease-option sale
c. land sales contract
d. sale-leaseback
A
Under a(n) _______________, a note is entered into by the buyer in favor of the seller to evidence the amount remaining due on the purchase price after deducting the down payment, an amount inclusive of any trust deed debts remaining of record with the seller retaining responsibility for their payment.
a. all-inclusive trust deed (AITD)
b. wraparound mortgage
c. overriding note
d. All of the above.
D
On a carryback sale of a one-to-four unit residential property, if a mandated _______________ is not included with the purchase agreement, a statutory contingency is triggered giving the buyer the right to cancel the transaction until it is signed by the buyer and the seller.
a. Carryback Disclosure Statement
b. Finder’s Fee Agreement
c. Exchange Agreement
d. All of the above.
A
o demonstrate the financial risk facing the seller if the buyer defaults and the seller forecloses, the seller’s agent prepares a(n):
a. Foreclosure Cost Sheet.
b. Conflict of Interest Disclosure.
c. Deed-in-Lieu of Foreclosure.
d. Balance Sheet.
A
buyer may secure a carryback note with one trust deed describing multiple parcels of real estate as security for payment of the carryback note, called a:
a. blanket mortgage.
b. business mortgage.
c. reverse mortgage.
d. None of the above.
A
Without the mortgage holder’s _______________ of their due-on enforcement rights triggered by future transfers, the mortgage holder can call the mortgage due on a later transfer of the buyer’s interest in the property.
a. prior written waiver
b. concurrent oral waiver
c. prior enforcement
d. None of the above.
A
Any broker negotiating a transaction as an agent for either party has a(n) _______________ to disclose title conditions affecting ownership or use of the property to both parties, not just their client.
a. agency duty
b. general duty
c. fiduciary duty
d. All of the above.
B
Carryback disclosure statements are optional in carryback transactions creating _______________ which do not bear interest or include finance charges.
a. straight notes
b. adjustable rate notes (ARMs)
c. interest only notes
d. installment sales
A
A seller, intending to carryback a mortgage, needs to be primarily concerned with:
a. their loan-to-value (LTV) ratio.
b. the buyer’s ability to pay.
c. Both a. and b.
d. Neither a. nor b.
C
