TOPIC 11 Flashcards
he lender has discovered a default registered against a potential borrower during a credit reference search for a mortgage application. Which of the following is untrue?
The default will show on the credit record for six years from the date of the default notice.
The default will be removed from the credit record if the arrears are settled.
The record will show the amount of the original default, subsequent payments made and the current balance.
The default will be removed from the credit record if the arrears are settled.
Which of the following statements are true of payday loans? Select all that apply.
a) They charge high rates of interest.
b) They are a form of long-term lending.
c) Mortgage lenders may not lend to those who have used them.
d) They are seen as a regular form of borrowing.
e) They may not show up on credit searches.
f) Lenders use multiple data searches to check for them.
a) They charge high rates of interest.
c) Mortgage lenders may not lend to those who have used them.
e) They may not show up on credit searches.
f) Lenders use multiple data searches to check for them.
Credit scoring:
is a standardised process offered to lenders by specialist providers.
is a statistical tool used to determine probability.
blends data and customer attitudes to produce a score.
is a statistical tool used to determine probability.
Lenders tend to use a variety of processes to suit their own needs. Credit scoring is based purely on statistical data, and establishes the probability of a loan being repaid satisfactorily. It is used mainly to screen out high-risk applications.
In relation to mortgage guarantors, with a limited liability guarantee the:
guarantee is shared between two or more guarantors.
amount of the guarantee is limited to a proportion of the mortgage.
guarantee will only be triggered in certain limited circumstances.
amount of the guarantee is limited to a proportion of the mortgage.
The guarantor must be informed if any payments are missed. True / False?
False
In the Lloyds Bank plc v Waterhouse [1991] court judgment, a guarantee was ruled invalid due to undue influence. True / False?
False
A prospective guarantor may be able to guarantee a mortgage by depositing a specific sum with the lender for a specified period. True / False?
True
It is entirely up to the lender to decide if it will agree to a guarantor’s request to be released from the guarantee. True / False?
True
There is no requirement for a lender to assess a prospective guarantor’s financial position before agreeing to take a guarantee. True / False?
False
The guarantor has an interest in the property that is subject to the guarantee. True / False?
False
A county court judgment will show on the Register of Judgments, Orders and Fines for England and Wales for six years from the date of the judgment:
in all circumstances.
unless the debt is paid in full within one month of the judgment.
but will be removed if the debt is settled within six years of the judgment.
unless the debt is paid in full within one month of the judgment.
Sue and Paul jointly own their family home. The house is worth £250,000 and they have a mortgage of £100,000. Paul has now been declared bankrupt. The trustee in bankruptcy is considering options in relation to the house. The trustee:
cannot force a sale because it is jointly owned.
can force a sale but may be required to delay the sale for 12 months.
has two years from the date of the bankruptcy order to decide whether to sell the property to pay the debts.
can force a sale but may be required to delay the sale for 12 months.
The trustee could force a sale because, although the house is jointly owned, Paul’s ‘interest’ (his share of the equity) is more than £1,000. As it is the family home, the sale can be delayed for up to 12 months to allow the family to find other accommodation. The trustee has three years to decide whether to sell the property to pay the debts.
Which of the following applies to an individual voluntary arrangement (IVA)?
75% of the creditors attending a creditors’ meeting must agree to the arrangement.
Interest and charges on the debt will be frozen if an IVA is agreed.
The debtor will agree to make fixed monthly payments to settle the debts outstanding at the start of the arrangement.
Interest and charges on the debt will be frozen if an IVA is agreed.
Creditors representing 75% of the total debt must agree.
The agreement will be to repay a proportion of the debt through regular fixed payments.
For anti-money-laundering purposes, for how long must a lender keep records of customer identification?
Five years from the date evidence was last obtained.
Indefinitely.
Five years from the end of the customer relationship.
Five years from the end of the customer relationship.
A sole trader who fails to make payments under a CCJ may be issued with an attachment of earnings order. True or false?
True False
False. An attachment of earnings order can only be made in relation to an employee, as it requires the employer to deduct money from the individual’s pay and send it to the court for onward payment to the creditor.
