Topic 2&3 Flashcards
Bradley Building Society has commercial assets of £80 million. What is the MAXIMUM it can lend to limited companies secured on land?
A. £8 million
B. £20 million
C. £32 million
D. £40 million
B. £20 million
Paul took out a loan to purchase a warehouse in the UK and Henry took out a loan to purchase a holiday home in Florida. Which transaction if either is deemed a regulated mortgage?
A. Henry’s
B. Paul’s
C. Both
D. Neither
D. Neither
Which one of the following statements is FALSE in relation to the power to borrow?
A. Attorneys can borrow on behalf of the other person if they have a current power of attorney that includes this.
B. Trustees can create a mortgage if the trust deed permits it.
C. An executor named in a will can create a mortgage if it is for the purpose of administering the estate.
D. A personal representative appointed by letters of administration has no powers to create a mortgage.
D. A personal representative appointed by letters of administration has no powers to create a mortgage.
Henry has discovered he is unable to enter into a contract to buy Jenny’s house. This is because:
A. Henry has not yet appointed a solicitor.
B. Henry is only 20, although he has funds for the deposit.
C. Jenny is selling on behalf of her mother who is out of the country and not aware of Jenny’s intentions.
D. Jenny suffers from minor depression for which she receives medication so she can continue working.
C. Jenny is selling on behalf of her mother who is out of the country and not aware of Jenny’s intentions.
A person of unsound mind who requires housing funded by a mortgage:
A. should appoint a specific power of attorney to another individual.
B. needs to appoint an enduring power of attorney to another individual.
C. is able to borrow in his or her own right.
D. must be represented by a person appointed by the Court of Protection.
D. must be represented by a person appointed by the Court of Protection.
A person who is given a legal responsibility to act on behalf of another while the latter is living abroad is known as:
A. A personal representative
B. an attorney
C. an administrator
D. A trustee
B. an attorney
Who of the following is legally able to take out a mortgage to buy a new property?
A. Sue, whose power of attorney has just been appointed to the Court of Protection.
B. Diane, who became a discharged bankrupt 6 months ago.
C. Jennie, whose bankruptcy order came into force 8 months ago.
D. Maria, who is 17 years of age and about to marry with her parents’ consent.
B. Diane, who became a discharged bankrupt 6 months ago.
Which of the following statements is true?
A. Trustees have automatic borrowing powers, irrespective of the contents of the trust deed.
B. Trustees can borrow unless the trust deed specifically prevents it.
C. Trustees can only borrow if the loan is for dealing with probate matters.
D. Trustees can only borrow if they are specifically empowered to do so by the trust deed.
D. Trustees can only borrow if they are specifically empowered to do so by the trust deed.
Which one of the following is true in relation to lending to limited companies?
A. Building societies can secure up to 75% of commercial assets on loans secured on land.
B. The security offered must be a commercial property.
C. Loans to limited companies represent potentially higher margins and lower risk.
D. To establish whether it is legally entitled to borrow, a lender should examine the memorandum and articles of association.
D. To establish whether it is legally entitled to borrow, a lender should examine the memorandum and articles of association.
Which one of the following would be able personally to take out a mortgage?
A. Chris, whose bankruptcy order was confirmed four months ago.
B. Dave, whose Individual Voluntary Arrangement was confirmed last month.
C. Edith, who is 80, and is the subject of an enduring power of attorney, given to her daughter.
D. Lucy, who is 17, working and has inherited £50,000 from her grandfather to use as a deposit.
B. Dave, whose Individual Voluntary Arrangement was confirmed last month.
Which of these mortgages below is most likely to be regulated under the Mortgage Credit Directive (MCD)?
A. A re-mortgage taken out by John to let out a property he has inherited following the death of his mother.
B. A mortgage for ABC Ltd to buy a residential property.
C. A mortgage taken by Pat to buy a warehouse in an industrial estate.
D. A mortgage taken by Paul to buy a villa in the USA.
A. A re-mortgage taken out by John to let out a property he has inherited following the death of his mother.
Under the FCA regulations, the definition of a regulated mortgage specifically EXCLUDES:
A. debt consolidation.
B. home improvement lending.
C. corporate mortgages.
D. bridging loans.
C. corporate mortgages.
Which of the following does not fall under the FCA rules as a regulated mortgage?
A. Interest only mortgages backed by investment policies.
B. Lifetime mortgages.
C. Loans where any part of the property is for commercial use.
D. Buy to Let mortgages mainly for business purposes.
D. Buy to Let mortgages mainly for business purposes.
From what date were mortgage advisers obliged to conform to the Mortgage Conduct of Business Rules?
A. 1 July 2004
B. 30 September 2004
C. 1 August 2004
D. 31 October 2004
D. 31 October 2004
Advice was given on a repayment mortgage on 15 July 2004 and the mortgage commenced on 10 August 2004. How is the administration of the mortgage treated under the Mortgage Conduct of Business Rules?
A. It is fully regulated.
B. It is deemed semi-regulated.
C. The transitional regulations apply.
D. The regulations do not apply at all.
D. The regulations do not apply at all.
