ENGRADE Chapter 13

Question 1

If the lender is not paid according to the terms of a promissory note and they hold a security interest in the property through a mortgage or trust deed, which of the following options may the lender pursue?

Answer 1

Renegotiate the terms and conditions of the promissory note with the borrower

Foreclose on the property

File for a deficiency judgement after the foreclosure if state law permits

Question 2

Which of the following statements is/are true if a buyer purchases property subject to the seller’s loan and then defaults on the loan?

Answer 2

The seller remains personally liable for the underlying debt.

Question 3

The borrower under a mortgage is known as the

Answer 3

Mortgagor

Question 4

How many discount points would the lender need to charge if the lender wishes to increase the yield on the loan from 9% to 10.25 %

Answer 4

Ten Points

Question 5

Under a contract for deed, the title to the property is held by the

Answer 5

Vendor

Question 6

A mortgagor is the one who

Answer 6

Gives the mortgage

Question 7

A contract for deed provides for the

Answer 7

conveyance of legal title at a future date

Question 8

The loan amount expressed as a % of the value of the real estate offered as collateral is the

Answer 8

Loan to Value Ratio

Question 9

A homebuyer financed his home five years ago with a high LTV, fixed rate loan. Due to a job transfer, the owner must move, but his home has suffered significant depreciation in value since purchase. Which of the following would be the least acceptable contractual obligation to handle the disposition of the property?

Answer 9

Abandon the house and stop making the payments

Question 10

An existing mortgage loan can have its lien priority lowered through the use of a

Answer 10

SUBORDINATION AGREEMENT

Question 11

The purpose of a mortgage is to

Answer 11

Provide security for the loan

Question 12

The clause in a deed of trust or mortgage that permits the lender to declare the entire unpaid balance immediately due and payable upon default by the borrower is the

Answer 12

ACCELERATION CLAUSE

Question 13

When a mortgage loan has been paid in full, it is important for the borrower to be sure that

Answer 13

The satisfaction of mortgage is recorded

Question 14

The right a grantor has to regain the property ownership by paying the debt after a foreclosure sale is called

Answer 14

Statutory right of redemption

Question 15

The defeasance clause in a deed of trust requires the trustee in a specified situation to execute

Answer 15

A deed of reconveyance

Question 16

When real estate is sold under a contract for deed, the legal title

Answer 16

is held by the seller until the purchase price is paid in full.