Section 12 TF Quiz

Question 1

1 Discount point on a $100,000 mortgage would cost $2,500.

Answer 1

[A] A. True
B. False

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[Section 12B, Slide 67]; Each Discount Point costs 1% of the purchase price per discount point. $100,000× .01 = $1,000

Question 2

When a buyer assumes an existing mortgage, a partial release will be issued which verifies the amount of the unpaid balance, interest rate, and date to which interest has been paid prior to the assignment.

Answer 2

A. True
[A] B. False

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[Section 12C, Slide 33] When a buyer assumes an existing mortgage, an Estoppel Certificate will be issued which verifies the amount of the unpaid balance, interest rate, and date to which interest has been paid prior to the assignment.

Question 3

For every discount point purchased, the lender’s yield increases by 1/8 of a percent.

Answer 3

[A] A. True
B. False

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[Section 12B, Slide 67]

Question 4

A contract for deed is also called a land contract.

Answer 4

[A] A. True
B. False

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[Section 12C, Slide 60]

Question 5

Even with an amortized mortgage, a buyer’s loan payment covering PITI will change occasionally if the property taxes and homeowner’s insurance increases or decreases.

Answer 5

[A] A. True
B. False

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[Section 12B, Slide 57]

Question 6

The acceleration clause calls the entire balance of the loan due if the borrower defaults on the loan.

Answer 6

[A] A. True
B. False

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[Section 12B, Slide 6]

Question 7

Florida is a title theory state.

Answer 7

A. True
[A] B. False

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[Section 12A, Slide 28]; Florida is a lien theory state.

Question 8

Hypothecation allows a person to live in a home that has been pledged as collateral.

Answer 8

[A] A. True
B. False

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[Section 12A, Slide 40]; When a mortgage is taken out on a home, the borrower retains the right to live in the home through hypothecation.

Question 9

In a lien theory state, the lender holds title.

Answer 9

[A] A. True
B. False

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[Section 12A, Slides 27 & 28]; In a lien theory state, the lender holds a lien against the property. In a title theory state, the lender holds title.

Question 10

If upon a foreclosure, there isn’t enough money to even pay off the debt to the mortgagee, then a deficiency judgment can be placed against the borrower.

Answer 10

[A] A. True
B. False

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[Section 12D, Slide 28]