Section 12 Multiple Choice Flashcards
A homeowner has multiple mortgages on his home. Which one of the following would be considered the primary lien?
The loan that closed on November 15th and was recorded on December 5th, 2010.
The loan that closed on November 10th and was recorded on December 7th, 2010.
[A] The loan that closed on November 20th and was recorded on December 4th, 2010.
The loan that closed on November 5th and was recorded on December 5th, 2010.
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[Section 12A, Slides 45-47]
Lis pendens is what kind of notice?
[A] Constructive
Actual
Public
Private
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[Section 12D, Slide 14]
Donald purchased a home with a down payment of $53,560 and a loan of $412,000 at 3.75% for 30 years. Monthly payments are $1,964,14. What is the loan to value ratio?
11%
[A] 89%
9%
86%
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[Section 12B, Slide 33] $53,560 + $412,000 = $465,560 Purchase price; $412,000 ÷ $465,560 = 0.88495575 or 89% rounded
Collard Sashis wanted to build a house on a property that was already mortgaged to Quality Bank. Builder Bank told Sashis that they would extend him a loan if Quality Bank allowed Builder Bank to take lien priority. What mortgage provision would Quality Bank need to agree to make this happen?
[A] Subordination
Novation
Partial Release
Blanket Mortgage
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[Section 12A, Slide 48]
The note contains which of the following?
[A] Payment schedule, loan amount, interest rate
The property deed, utility information, setbacks
Building plans, blueprints, permits
Love notes from the builder
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[Section 12A, Slide 33]
Adam recently completed the state test to become a licensed Florida Real Estate Licensee and he was explaining to his family the difference between a lien theory state and a title theory state. Which one of the following statements is not true regarding title theory state?
The lender holds the title to the property until the mortgage is paid.
At closing, title is conveyed to the lender.
[A] Florida is a title theory state.
Once the debt is paid in full, the lender conveys the title to the borrower.
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[Section 12A, Slides 27 & 28]
Emil is trying to understand how to build equity on his recent home purchase. As his real estate licensee, you would tell him that equity is built in which of the following ways?
[A] Equity increases as he pays off the mortgage debt and as the property increases in value due to a good market.
Equity increases only as Emil pays off his mortgage debt. The market does not influence the amount of equity his home has.
Equity is influenced only by the current housing market.
Equity is highest when the mortgage loan is originally taken out by the buyer, in this case, Emil because the market value will likely not be higher than it is at that moment.
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[Section 12B, Slide 32]
Afredo’s seller has sold his home for $213,000. The remaining balance on his mortgage was $54,326. How much equity did he have on his home?
$213,000
$267,326
[A] $158,674
$54,326
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[Section 12B, Slide 34]; $213,000-$54,326=$158,674
The part of the purchase price paid in cash up front, reducing the amount of the loan or mortgage is what?
Interest
Savings
[A] Down payment
Collateral
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[Section 12B, Slide 34]; $213,000-$54,326=$158,674
Archie wanted to pay off a portion of his mortgage loan. However, he was worried that he would be stuck with a penalty. What is likely the outcome?
Archie would be able to pay off a portion of his loan, but he would be penalized for paying it off early unless there was a repayment clause included in his mortgage.
[A] Archie would be able to pay off a portion of his loan and would likely not incur a penalty because prepayment clauses are automatically included in Florida unless specifically excluded.
Archie would be able to pay off his loan, but he would need to pay the entire balance in order to avoid the penalty.
Archie is not able to pay off any portion of his loan early because in Florida prepayment clauses are automatically excluded.
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[Section 12B, Slide 4]
What is a lender’s yield on a conventional loan if they charged 5% interest and 3 points?
5.80%
8%
[A] 5.38%
3.50%
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[Section 12B, Slide 71] 1/8 * 3 points = 3/8. 3 divided by 8 = .375 + 5 points rounded up = 5.38%
A lender charges 1 point on a loan of $250,000 for a quoted interest rate of 4.5% interest. What is the cost to the borrower?
[A] $2,500
$11,250
$16,625
$7,000
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[Section 12B, Slide 71]; $250,000×.01=$2,500
In which of the following situations would a short sale be appropriate?
[A] John has been in his home for 5 years. He wants to sell his home, but his mortgage is higher than the value of his home.
Sandy and Carlos do not own their residence. They rent the single-family home from a local rental company. However, recently they have been falling behind on their rent. The landlord is forced to take negative action against them.
Jim and Cora have owned their home for 20 years. They have completely paid off their mortgage and they plan to build onto their home. Their family business has been at a low for the past 2 years. Consequently, they are unable to proceed with the add-on as planned.
Marcus and Martha own a vacation home in Florida. They rent it out to vacationers when they are not utilizing the space.
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[Section 12D, Slides 51-54]
There are two parties to a mortgage. Which one of the following contains the correct pairing?
Mortgagor=Lender
Mortgagee=Buyer
Mortgagor=Seller
[A] Mortgagee=Lender
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[Section 12A, Slide 37]
Brett is developing a local community. He obtained a blanket mortgage for the collection of properties with multiple legal descriptions. As he sold the properties under the blanket mortgage, what happens to the property under the blanket mortgage?
The mortgage gets completely released from the blanket mortgage through a release clause.
The mortgage stays a part of the blanket mortgage until it is completely paid off by the buyer.
The buyer would receive equitable title once the mortgage is paid, but there would forever be a lien attached to the property.
[A] A partial release is obtained for just the parcel sold.
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[Section 12C, Slide 21]
