Unit quiz 14 Flashcards
A junior lien may become first in priority if the original lender agrees to execute a
A) deed of trust.
B) call clause.
C) second mortgage agreement.
D) subordination agreement.
D) subordination agreement.
If the original (first mortgage) lender signs a subordination agreement, another loan made more recently (later) may be allowed to take first place; the original loan then drops to second place in priority.
In one state, a mortgagee holds legal title to real property offered as collateral for a loan, and the mortgagor retains the rights of possession and use. If the borrower defaults, the lender is entitled to immediate possession and rents. This state can be BEST characterized as what kind of state?
A) Title theory
B) Mortgage theory
C) Lien theory
D) Intermediate theory
A) Title theory
In title theory states, the mortgagor actually gives legal title to the mortgagee (or some other designated individual) and retains (_A.?_) Legal title is returned to the mortgagor only when the debt is (_B.?_)
A. equitable title.
B. paid in full (or some other obligation is performed).
The general types of foreclosure proceedings are
A) judgmental and nonjudgmental.
B) judicial, nonjudicial, and strict foreclosure.
C) judicial, nonjudicial, and strict repossession.
D) judicial and nonjudicial.
B) judicial, nonjudicial, and strict foreclosure.
(?) foreclosure allows the property to be sold by court order after the mortgagee has given sufficient public notice.
Judicial
When a proposed property sales price is less than the amount outstanding on the seller’s mortgage debt, the sale may be possible if the lender approves a
Short sale
A building was sold for $715,000. Earnest money in the amount of $65,000 was deposited in escrow, and the buyer obtained a new loan for the balance of the purchase price. The lender charged two discount points on the loan. What was the total amount of cash used by the buyer for this purchase?
$78,000
$715,000 sales price – $65,000 earnest money = $650,000 loan balance; $650,000 × 2% (0.02) discount points = $13,000; $65,000 earnest money + $13,000 discount points = $78,000 cash used by buyer.
In a loan that requires periodic payments that do not fully amortize the loan balance by the final payment, what term BEST describes the final payment?
A) Balloon
B) Variable
C) Adjustment
D) Acceleration
A) Balloon
Under a land contract, the vendee receives
A) equitable title with the right of possession.
B) equitable title without the right of possession.
C) fee title without the right of possession.
D) fee title with the right of possession.
A) equitable title with the right of possession.
Under a land contract, the seller is called the
A) beneficiary.
B) trustor.
C) vendee.
D) vendor.
D) vendor.
Under an installment contract, the legal title to the property is held by the
A) trustor.
B) vendor.
C) vendee.
D) trustee.
B) vendor.
Real estate can be purchased under a land contract, also called
an installment contract or contract for deed.
The right a mortgagor has to regain the property by paying the debt after a foreclosure sale is called
redemption
The (?) allows a defaulted borrower a period of time to pay the debt and redeem the real estate after the foreclosure sale.
statutory right of redemption
To institute a nonjudicial foreclosure, the trustee or mortgagee may be required to record a
A) nonjudicial default at the country recorder’s office.
B) notice of default at the county recorder’s office.
C) notice of nonjudicial foreclosure at the county recorder’s office.
D) notice of foreclosure at the county recorder’s office.
B) notice of default at the county recorder’s office.
To institute a nonjudicial foreclosure, the trustee or mortgagee will send a notice of default to the borrower indicating the amount that must be paid to make the debt current, as well as the action that will be taken if the required payment is not made.
