MOCK EXAM 4 Flashcards
A lender can surrender an endowment policy that a borrower is using as a repayment vehicle only if the:
A. borrower has been served with a warning.
B. borrower is up to date with premiums.
C. policy has been assigned to the lender.
D. policy has been deposited with the lender.
C. policy has been assigned to the lender.
Lenny’s property has been taken into possession and sold by his lender for less than the outstanding mortgage debt. If the lender claimed on the mortgage indemnity insurance and received full settlement, which of the following statements is correct?
A. Neither the insurer nor the lender can sue Lenny for the recovery of the payment made.
B. The insurer and the lender can jointly sue Lenny for the recovery of the payment made.
C. The insurer can sue Lenny for the recovery of the payment made.
D. The lender can sue Lenny for the recovery of the payment made.
C. The insurer can sue Lenny for the recovery of the payment made.
Which of the following legal remedies available to mortgage lenders is often used when there is an income from the property?
A. Appointment of a receiver.
B. Foreclosure.
C. Sue for possession.
D. Sue on the borrower’s personal covenant.
A. Appointment of a receiver.
Which of the following is not an option available to the court when considering an application for possession? To:
A. adjourn the case.
B. grant a suspended possession order.
C. grant an outright possession order.
D. order the borrower to repay the debt within a specified period.
D. order the borrower to repay the debt within a specified period.
Ian has been unemployed since he was made redundant last month and he has made a claim for Income Support to cover his mortgage interest payments. His low-cost endowment mortgage was completed in September 2009. Which of the following
statements is correct in respect of his entitlement to Income Support?
A. Benefit covering all his mortgage interest will be payable from the ninth week after the date of his claim.
B. Benefit covering his full entitlement up to 100% of the mortgage interest will be payable from the 13th week after the date of his claim.
C. No benefit will be payable in respect of his endowment premiums.
D. No benefit will be payable for the first eight weeks following the claim, with 50% of the mortgage interest being covered for the following 18 weeks.
C. No benefit will be payable in respect of his endowment premiums.
Which of the following is true in relation to home reversion plans?
A. Interest will be rolled up if required.
B. The plan holder can choose to receive cash or income but not both.
C. The plan holder will not benefit financially from any improvements he makes to the property.
D. The plan holder will retain ownership of the property.
C. The plan holder will not benefit financially from any improvements he makes to the property.
What is the significance of a no negative equity arrangement on a lifetime mortgage?
A. An annuity will be arranged, from which the interest must be paid.
B. Mortgage payments can be suspended if the house is worth more than the
total debt.
C. The borrower will be required to sign an agreement to pay interest if the debt
exceeds a pre-determined level.
D. The mortgage plus rolled-up interest cannot exceed the property value.
D. The mortgage plus rolled-up interest cannot exceed the property value.
Changing a capital repayment mortgage to an interest only mortgage with the same lender may require:
A. deed of assignment.
B. the lender’s consent
C. new mortgage contract.
D. transfer of equity.
B. the lender’s consent
Which of the following statements in respect of the early redemption of a mortgage is correct? The:
A. borrower can redeem the loan early, but only if the mortgage deed allows.
B. borrower has a legal right to redeem at any time, although an early repayment charge may be payable.
C. lender may decline the request if the mortgage deed contains a clause prohibiting early redemption.
D. lender may give consent or decline the request depending on the circumstances at the time.
B. borrower has a legal right to redeem at any time, although an early repayment charge may be payable.
Ben has an unsecured loan of £3,800. What change to this loan could increase the risk
of his home being repossessed?
A. Paying it back in a lump sum rather than in regular payments.
B. Paying it back later than originally agreed.
C. Switching it from variable to fixed interest.
D. Switching it to secured status.
D. Switching it to secured status.
Martin is in financial difficulty and is considering surrendering his mortgage-linked endowment and switching to a repayment mortgage. What potential advantage can he obtain by using the secondary market as opposed to surrendering his policy?
A. Avoiding the payment of a higher lending charge.
B. Enhancing the amount received for the policy.
C. Maintaining his required level of life cover.
D. Quicker settlement.
B. Enhancing the amount received for the policy.
Which of the following types of mortgage is least likely to have its term extended as a way of dealing with arrears?
A. ISA mortgage.
B. Repayment mortgage.
C. Unit-linked endowment mortgage.
D. With-profits endowment mortgage.
D. With-profits endowment mortgage.
Which of the following must be included in the warning letter a lender must send to a customer within 15 business days of becoming aware of an arrears situation?
A. A list of missed payments.
B. Procedures that the lender must follow to take possession.
C. The CML information sheet on arrears.
D. The total outstanding debt, including any redemption charges.
A. A list of missed payments.
Gavin and Sarah are about to have their house repossessed by their lender. Under the Mortgage Conduct of Business Rules:
A. if there is a claim on a MIG policy as a result of the sale, the lender will be able to claim reimbursement from them at a later date for the amount paid under the policy.
B. the lender must market the property for sale within three months.
C. the lender must obtain the best price reasonably possible for the property.
D. where the sale proceeds exceed the outstanding debt, the lender can keep the surplus.
A. if there is a claim on a MIG policy as a result of the sale, the lender will be able to claim reimbursement from them at a later date for the amount paid under the policy.
A borrower in financial difficulty has received detailed advice from both the Consumer Credit Counselling Service and a financial adviser. In which case, if either,
is a charge permitted to be made for this advice?
A. Both
B. Consumer Credit Counselling Service only
C. Financial adviser only
D. Neither
C. Financial adviser only
