Chapter 9 Flashcards
A real estate promissory note that reads “$50,000 principal payable interest only monthly at a rate of 10%” is what type of promissory note?
straight
A real estate promissory note reads “$557.50 per month for 239 payments, then a final monthly payment of $2,011.19”. This is an example of a/an:
balloon payment
Under a trust deed (deed of trust) the:
trustor deeds to trustee
An enforceable due-on-sale clause is correctly called a/an:
alienation clause
In a normal sale using both a grant deed and a trust deed (deed of trust) the buyer is the:
grantee and trustor
Which of the following liens are NOT eliminated by a foreclosure sale? State, county or city taxes Federal tax liens All of the answers are correct State, county, or city assessments
All of the answers are correct
A type of financing instrument where the owner (vendor) retains the legal title until the buyer (vendee) fulfills the terms of the purchase contract:
installment sales contract
Under the Trustee’s Sale procedure, after a Notice of Default has been recorded, a borrower has how long to reinstate by making up past payments, penalties, late charges, and trustee expenses?
5 days prior to trustee’s sale date
The Equal Credit Opportunity Act requires a lender to:
not discriminate on the basis of race, creed, color, sex, origin, marital status
The successful bidder at a Trustee’s Sale (foreclosure) receives what type of deed?
trustee’s
If a real estate loan is paid off in advance of the due date, some lenders are legally allowed to charge a penalty. This is called what type of penalty?
prepayment
What provision in an instrument of finance would permit a change in the priority of liens on a property?
Subordination clause
The Mortgage Loan Broker Law does not apply to first loans of $30,000 or more and second deed of trust loans of:
$20,000
A clause in a financial instrument that allows a lender to demand immediate payment of the entire note balance is known as a(n):
acceleration clause.
Which of the following regarding a Trustee’s Sale is false?
after the sale the dispossessed owner has a one-year right of redemption
An owner sells and the buyer takes over the existing loan. To relieve the seller of primary liability, the buyer must:
assume the note and trust deed
The use of borrowed funds to acquire a property is technically called:
leveraging
In a trustee’s sale the proceeds of the sale were sufficient to pay the demands of the first and second trust deed holders, foreclosure costs, and provide a small cash surplus. What is the priority schedule for the distribution of the cash proceeds?
first trust deed; second trust deed, foreclosure costs; trustor
$300,000 loan at 8% payable $2,000 per month is what type of note?
straight
Which of the following is FALSE concerning the APR?
It is expressed as a weekly rate
In an ARM loan, the distance between the borrower’s rate and the index is called the:
margin
A copy of a Mortgage Loan Disclosure Statement prepared by the broker and signed by the borrower must be retained by the broker for at least:
three years
A clause in a trust deed that states that the lender’s rights shall become secondary to a new trust deed is called:
a subordination clause
Under the Real Property Loan Law the maximum amount a borrower can pay for closing costs, excluding commission, regardless of the size of the loan is:
$700
Under the Real Property Loan Law a prepayment penalty cannot be charged for loans of:
5 years or less
6 years or less
3 years or less
can be charged on all of the above, except A
can be charged on all of the above, except A
Which of the following words expresses a meaning most completely opposite the term “alienation”?
acquisition
For loans that fall under the California usury law, the maximum interest rate is:
10% or 5% above the Federal Reserve Discount Rate whichever is greater
The loan-to-value ratio on a mortgage is defined as the:
loan amount as a percentage of the sales price or appraised value, which ever is less.
A property is usually appraised in what phase of the financing process?
analysis
Any loan payment twice as large as a regular payment is called a:
balloon
