Real Estate Principles: Q12/Chp 62-67

Question 1

1) A(n) \_\_\_\_\_\_\_ imposes an additional charge if a mortgage payment is not received by the lender when due or within a grace period.
A) due-on clause
B) final/balloon payment provision
C) late charge provision
D) acceleration clause

Answer 1

C) late charge provision

Question 2

2) \_\_\_\_\_\_\_\_\_ is the minimum grace period allowed for a private lender secured by an owner occupied single-family residence (SFR), even if the homeowner agrees to a shorter grace period, or no grace period is agreed to.
A) Two days
B) Five days
C) Ten days
D) One month

Answer 2

C) Ten days

Question 3

3) An owner of real estate who wants to pay off principal on a debt before it is due may be levied an additional charge by the lender, called a(n):
A) grace period.
B) balloon payment.
C) prepayment penalty.
D) late fee.

Answer 3

C) prepayment penalty.

Question 4

4) A(n) \_\_\_\_\_\_\_\_\_ is any final payment on a note which is an amount greater than twice the amount of any one of the six regularly scheduled preceding payments.
A) late charge
B) balloon payment
C) usury limit
D) pre-payment penalty

Answer 4

B) balloon payment

Question 5

5) Notice of a final/balloon payment needs to be given to the buyer or current owner \_\_\_\_\_before it's due date
A) 30 days 
B) 60 days 
C) 70 days 
D) 90 days

Answer 5

D) 90 days

Question 6

6) The \_\_\_\_\_\_ is the preferential method used to impose a lien on real estate: 
A) promissory note
B) trust deed
C) due-on clause
D) notice of Nonresponsibility

Answer 6

B) trust deed

Question 7

7) The \_\_\_\_\_\_\_\_, such as a lender or carryback seller, is the entity entitled to the performance of the promised activity referenced in the trust deed as the purpose for obtaining the security.
A) trustee
B) trustor
C) beneficiary
D) executor

Answer 7

C) beneficiary

Question 8

8) When the lender enters into an agreement with both the buyer and seller for the buyer's assumption of the loan and a release of the seller's liability, this is known as a:
A) substitution of security.
B) novation.
C) equitable subordination.
D) subject-to transaction.

Answer 8

B) novation.

Question 9

9) The occurrence of an event which triggers due-on enforcement automatically allows the lender to call the loan, also known as:
A) waiver by consent.
B) acceleration.
C) recasting.
D) subordination.

Answer 9

B) acceleration.

Question 10

10) The due-on clause is triggered not only by a transfer using a standard grant deed, but by a lease with a term over:
A) six months.
B) one year.
C) two years.
D) three years.

Answer 10

D) three years.