Unit 4 – Topic 11 Flashcards
Checking the applicant’s credit status
Which of the following, in relation to a guarantor’s rights is correct? – The guarantor :(11.2)
A. has the right to inspect mortgage documentation
B. has the right to be informed if mortgage payments are missed
C. must be informed if the mortgage holder requests a further advance
D. has an interest in the property on which they are guaranteeing the
mortgage
C. must be informed if the mortgage holder requests a further advance
A guarantor must be informed if the mortgage holder requests a further advance or an extension of the term.
Richard has recently set up an individual voluntary arrangement (IVA) with a local firm of insolvency practitioners. If Richard’s debts were £200,000, agreement to the arrangement must be given by creditors who are owed a total of at least what figure ? (11.3.3)
A. £ 50,000
B. £100,000
C. £150,000
D. £200,000
C. £150,000
Creditors that represent at least 75% of the debt must agree to the IVA.
Under money laundering regulations, evidence of identification must be retained for what period after the relationship with the customer has ended? (11.6.1)
A. 1 year
B. 3 years
C. 5 years
D. Indefinitely
C. 5 years
evidence of identification must be retained until at least five years after the relationship with the customer has ended.
Rita was unable to arrange a Debt Relief Order, because : (11.3.5)
A. she had gross assets of £200
B. she was domiciled in Wales
C. She owed a total of £40,000
D. after tax, National Insurance Contributions and household expenses, she had disposable monthly income of £40
C. She owed a total of £40,000
Option C is correct, because Rita owes £40,000. The limit for a Debt Relief Order is £30,000.
With the other options, she could qualify.
Richard has agreed to stand as guarantor for 25% of his daughter’s mortgage. This means that he has agreed to : (11.2)
A. a mortgage indemnity guarantee
B. a limited liability mortgage guarantee
C. a full liability mortgage guarantee
D. a conditional liability guarantee
B. a limited liability mortgage guarantee
The guarantee Richard has provided is a limited liability guarantee mortgage guarantee. With this type of guarantee, the liability is shown as a percentage of the mortgage.
Where a bankrupt’s equity in a property exceeds £1,000, the forced sale of the mortgaged property can be delayed for what minimum period in order to allow the family to make alternative arrangements ? (11.3.2)
A. 3 months
B. 6 months
C. 9 months
D. One year
D. One year
The forced sale of the mortgaged property can be delayed for at least one year to allow the family time to make alternative arrangements.
A guarantee will be rendered invalid in which one of the following circumstances ? (11.2)
A If the guarantor can prove that they are not able to meet a substantial
liability.
B Where a borrower can show that a proposed new guarantor would be more suitable.
C Where the term of a mortgage loan is to be extended.
D Where the terms of the guarantee were misrepresented to the prospective guarantor.
D Where the terms of the guarantee were misrepresented to the prospective guarantor.
Misrepresentation is one of the issues that can make a guarantee invalid
Which of the following is most likely to receive a good credit score ? (11.1.3)
A. Manbir, who has seven credit cards and has just applied for number eight.
B. Deborah, who has applied for payday loans three times in the past year
C. Jackie, who has never had a mortgage or a credit card.
D. Patrick, who has a mortgage and a personal loan and has no record of
a missed payment
D. Patrick, who has a mortgage and a personal loan and has no record of
a missed payment
Patrick is the clear favourite here; he’s managed his mortgage and personal loan satisfactorily.
